H World Group Limited Announces Preliminary Results for Hotel Operations in the Third Quarter of 2022
SHANGHAI, China, Oct. 25, 2022 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World”, “we” or “our”), a key player in the global hotel industry, today announced preliminary results for hotel operations in the third quarter (“Q3 2022”) ended September 30, 2022.
COVID-19 update
For our Legacy-Huazhu business, our RevPAR in Q3 2022 recovered to 90% of the 2019 level, thanks to pent-up leisure travelling demand in the summer holiday during July and August 2022, as well as gradual recovery of business travelling in late September 2022. Breaking down into each month, our RevPAR in July, August and September 2022 recovered to 90%, 89% and 90% of the 2019 levels, respectively. However, we remain cautious on the recovery path in Q4 2022 as we are seeing more sporadic resurgences of COVID in various provinces and cities in China recently.
Steigenberger Hotels AG and its subsidiaries (“DH”, or “Legacy-DH”) have experienced continuing RevPAR recovery in Q3 2022. After recovering to 93% of 2019 levels in Q2 2022, blended RevPAR increased to 102% of 2019 levels in Q3 2022. Blended RevPAR recovery was driven by a 17% increase in ADR, while occupancy remained 10 percentage points behind 2019 levels. Due to expected energy shortages and resulting high inflation rates in Europe, further ADR increases will be required to cover the cost increases. Therefore, the focus of DH will continue to be on efficiency improvements, re-negotiation of lease contracts, and personnel cost optimization.
Operating Results: Legacy-Huazhu(1)
| Number of hotels | Number of rooms | |||||||
| Opened in Q3 2022 | Closed (2) in Q3 2022 | Net added in Q3 2022 | As of September 30, 2022 (3) | As of September 30, 2022 | ||||
| Leased and owned hotels | 4 | (19 | ) | (15 | ) | 631 | 90,034 | |
| Manachised and franchised hotels | 425 | (185 | ) | 240 | 7,645 | 682,193 | ||
| Total | 429 | (204 | ) | 225 | 8,276 | 772,227 | ||
| (1) Legacy-Huazhu refers to H World and its subsidiaries, excluding DH. (2) The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q3 2022, we temporarily closed 14 hotels for brand upgrade and business model change purposes. (3) As of September 30, 2022, 558 hotels were requisitioned by governmental authorities. | ||||||||
| As of September 30, 2022 | ||
| Number of hotels | Unopened hotels in pipeline | |
| Economy hotels | 4,898 | 950 |
| Leased and owned hotels | 363 | 1 |
| Manachised and franchised hotels | 4,535 | 949 |
| Midscale and upscale hotels | 3,378 | 1,324 |
| Leased and owned hotels | 268 | 16 |
| Manachised and franchised hotels | 3,110 | 1,308 |
| Total | 8,276 | 2,274 |
| Operational hotels excluding hotels under requisition(4) | ||||||||
| For the quarter ended | ||||||||
| September 30, | June 30, | September 30, | yoy | |||||
| 2021 | 2022 | 2022 | change | |||||
| Average daily room rate (in RMB) | ||||||||
| Leased and owned hotels | 296 | 243 | 294 | -0.6 | % | |||
| Manachised and franchised hotels | 238 | 215 | 248 | 4.3 | % | |||
| Blended | 246 | 218 | 254 | 3.1 | % | |||
| Occupancy Rate (as a percentage) | ||||||||
| Leased and owned hotels | 69.7 | % | 62.9 | % | 73.1 | % | +3.4 p.p. | |
| Manachised and franchised hotels | 72.2 | % | 64.9 | % | 76.4 | % | +4.2 p.p. | |
| Blended | 71.9 | % | 64.6 | % | 76.0 | % | +4.2 p.p. | |
| RevPAR (in RMB) | ||||||||
| Leased and owned hotels | 206 | 153 | 215 | 4.2 | % | |||
| Manachised and franchised hotels | 172 | 139 | 190 | 10.4 | % | |||
| Blended | 177 | 141 | 193 | 9.1 | % | |||
| For the quarter ended | ||||||
| September 30, | September 30, | yoy | ||||
| 2019 | 2022 | change | ||||
| Average daily room rate (in RMB) | ||||||
| Leased and owned hotels | 288 | 294 | 2.1 | % | ||
| Manachised and franchised hotels | 235 | 248 | 5.5 | % | ||
| Blended | 245 | 254 | 3.4 | % | ||
| Occupancy Rate (as a percentage) | ||||||
| Leased and owned hotels | 90.0 | % | 73.1 | % | -16.9 p.p. | |
| Manachised and franchised hotels | 87.2 | % | 76.4 | % | -10.8 p.p. | |
| Blended | 87.7 | % | 76.0 | % | -11.7 p.p. | |
| RevPAR (in RMB) | ||||||
| Leased and owned hotels | 259 | 215 | -17.1 | % | ||
| Manachised and franchised hotels | 205 | 190 | -7.5 | % | ||
| Blended | 215 | 193 | -10.3 | % | ||
(4) If including hotels under requisition, RevPAR in Q3 2022 would have been 90% of the 2019 level.
| Same-hotel operational data by class | |||||||||||||||
| Mature hotels in operation for more than 18 months (excluding hotels under requisition) | |||||||||||||||
| Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||
| As of September 30, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | |||||||||
| ended September 30, | change | ended September 30, | change | ended September 30, | change | ||||||||||
| 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | (p.p.) | |||||||
| Economy hotels | 3,366 | 3,366 | 146 | 148 | 1.4 | % | 189 | 188 | -0.7 | % | 77.0 | % | 78.6 | % | +1.6 |
| Leased and owned hotels | 363 | 363 | 158 | 164 | 3.7 | % | 215 | 211 | -1.8 | % | 73.5 | % | 77.6 | % | +4.1 |
| Manachised and franchised hotels | 3,003 | 3,003 | 143 | 145 | 1.0 | % | 185 | 184 | -0.5 | % | 77.6 | % | 78.7 | % | +1.1 |
| Midscale and upscale hotels | 2,122 | 2,122 | 228 | 242 | 6.2 | % | 324 | 322 | -0.5 | % | 70.3 | % | 75.0 | % | +4.7 |
| Leased and owned hotels | 233 | 233 | 261 | 273 | 4.6 | % | 398 | 389 | -2.4 | % | 65.5 | % | 70.3 | % | +4.7 |
| Manachised and franchised hotels | 1,889 | 1,889 | 221 | 236 | 6.6 | % | 311 | 311 | 0.0 | % | 71.2 | % | 75.8 | % | +4.7 |
| Total | 5,488 | 5,488 | 183 | 190 | 3.9 | % | 248 | 248 | -0.2 | % | 73.9 | % | 76.9 | % | +3.0 |
| Number of hotels | Same-hotel RevPAR | Same-hotel ADR | Same-hotel Occupancy | ||||||||||||
| As of September 30, | For the quarter | yoy | For the quarter | yoy | For the quarter | yoy | |||||||||
| ended September 30, | change | ended September 30, | change | ended September 30, | change | ||||||||||
| 2019 | 2022 | 2019 | 2022 | 2019 | 2022 | 2019 | 2022 | (p.p.) | |||||||
| Economy hotels | 2,057 | 2,057 | 189 | 147 | -22.5 | % | 203 | 187 | -7.5 | % | 93.5 | % | 78.4 | % | -15.2 |
| Leased and owned hotels | 346 | 346 | 211 | 161 | -23.5 | % | 226 | 208 | -7.9 | % | 93.4 | % | 77.5 | % | -15.9 |
| Manachised and franchised hotels | 1,711 | 1,711 | 184 | 143 | -22.1 | % | 196 | 182 | -7.3 | % | 93.5 | % | 78.6 | % | -14.9 |
| Midscale and upscale hotels | 994 | 994 | 295 | 234 | -20.7 | % | 341 | 319 | -6.3 | % | 86.7 | % | 73.4 | % | -13.2 |
| Leased and owned hotels | 181 | 181 | 354 | 251 | -29.2 | % | 405 | 362 | -10.5 | % | 87.5 | % | 69.2 | % | -18.2 |
| Manachised and franchised hotels | 813 | 813 | 277 | 229 | -17.3 | % | 321 | 307 | -4.3 | % | 86.4 | % | 74.7 | % | -11.7 |
| Total | 3,051 | 3,051 | 230 | 180 | -21.6 | % | 254 | 236 | -6.9 | % | 90.9 | % | 76.5 | % | -14.4 |
Operating Results: Legacy-DH(5)
| Number of hotels | Number of rooms | Unopened hotels in pipeline | ||||||
| Opened in Q3 2022 | Closed in Q3 2022 | Net added in Q3 2022 | As of September 30, 2022(6) | | As of September 30, 2022 | | As of September 30, 2022 | |
| Leased hotels | - | 79 | 14,939 | 27 | ||||
| Manachised and franchised hotels | 1 | - | 1 | 47 | 10,323 | 12 | ||
| Total | 1 | - | 1 | 126 | 25,262 | 39 | ||
| (5) Legacy-DH refers to DH. (6) As of September 30, 2022, a total of 4 hotels were temporarily closed. 1 hotel was closed for renovation and 1 hotel was closed due to flood damage. Additionally, 1 hotel was temporarily closed due to extensive hotel refurbishment, and 1 hotel was temporarily closed due to seasonal break . | ||||||||
| For the quarter ended | ||||||||
| September 30, | June 30, | September 30, | yoy | |||||
| 2021 | 2022 | 2022 | change | |||||
| Average daily room rate (in EUR) | ||||||||
| Leased hotels | 94.3 | 112.6 | 112.9 | 19.7 | % | |||
| Manachised and franchised hotels | 104.5 | 106.7 | 115.6 | 10.6 | % | |||
| Blended | 98.6 | 110.4 | 113.9 | 15.5 | % | |||
| Occupancy rate (as a percentage) | ||||||||
| Leased hotels | 48.0 | % | 61.2 | % | 67.4 | % | +19.5 p.p. | |
| Managed and franchised hotels | 49.4 | % | 57.9 | % | 64.1 | % | +14.7 p.p. | |
| Blended | 48.6 | % | 59.8 | % | 66.1 | % | +17.5 p.p. | |
| RevPAR (in EUR) | ||||||||
| Leased hotels | 45.3 | 68.9 | 76.1 | 68.2 | % | |||
| Managed and franchised hotels | 51.6 | 61.8 | 74.1 | 43.5 | % | |||
| Blended | 47.9 | 66.0 | 75.3 | 57.2 | % | |||
Hotel Portfolio by Brand
| As of September 30, 2022 | |||
| Hotels | Rooms | Unopened hotels | |
| in operation | in pipeline | ||
| Economy hotels | 4,913 | 386,911 | 964 |
| HanTing Hotel | 3,207 | 285,313 | 603 |
| Hi Inn | 460 | 24,128 | 127 |
| Ni Hao Hotel | 140 | 10,074 | 192 |
| Elan Hotel | 868 | 42,810 | - |
| Ibis Hotel | 223 | 22,876 | 28 |
| Zleep Hotels | 15 | 1,710 | 14 |
| Midscale hotels | 2,816 | 308,164 | 1,001 |
| Ibis Styles Hotel | 85 | 8,864 | 18 |
| Starway Hotel | 565 | 46,492 | 212 |
| JI Hotel | 1,629 | 192,872 | 534 |
| Orange Hotel | 505 | 54,822 | 229 |
| CitiGO Hotel | 32 | 5,114 | 8 |
| Upper midscale hotels | 525 | 75,500 | 263 |
| Crystal Orange Hotel | 161 | 21,314 | 53 |
| Manxin Hotel | 111 | 10,443 | 52 |
| Madison Hotel | 50 | 7,276 | 62 |
| Mercure Hotel | 133 | 22,250 | 54 |
| Novotel Hotel | 17 | 4,424 | 18 |
| IntercityHotel(7) | 53 | 9,793 | 24 |
| Upscale hotels | 124 | 21,223 | 76 |
| Jaz in the City | 3 | 587 | 1 |
| Joya Hotel | 8 | 1,368 | 1 |
| Blossom House | 43 | 2,055 | 52 |
| Grand Mercure Hotel | 8 | 1,897 | 5 |
| Steigenberger Hotels & Resorts(8) | 53 | 13,754 | 10 |
| MAXX(9) | 9 | 1,562 | 7 |
| Luxury hotels | 15 | 2,326 | 4 |
| Steigenberger Icon(10) | 9 | 1,847 | 1 |
| Song Hotels | 6 | 479 | 3 |
| Others | 9 | 3,365 | 5 |
| Other hotels(11) | 9 | 3,365 | 5 |
| Total | 8,402 | 797,489 | 2,313 |
(7) As of September 30, 2022, 3 operational hotels and 10 pipeline hotels of IntercityHotel were in China.
(8) As of September 30, 2022, 11 operational hotels and 3 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(9) As of September 30, 2022, 3 operational hotels and 7 pipeline hotels of MAXX were in China.
(10) As of September 30, 2022, 3 operational hotels of Steigenberger Icon were in China.
(11) Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).
About H World Group Limited
Originated in China, H World Group Limited is a key player in the global hotel industry. As of September 30, 2022, H World operated 8,402 hotels with 797,489 rooms in operation in 17 countries. H World’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, H World also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.
H World’s business includes leased and owned, manachised and franchised models. Under the lease and ownership model, H World directly operates hotels typically located on leased or owned properties. Under the manachise model, H World manages manachised hotels through the on-site hotel managers that H World appoints, and H World collects fees from franchisees. Under the franchise model, H World provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. H World applies a consistent standard and platform across all of its hotels. As of September 30, 2022, H World operates 13 percent of its hotel rooms under lease and ownership model, and 87 percent under manachise and franchise models.
For more information, please visit H World’s website: .
Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; economic conditions; the regulatory environment; our ability to attract and retain customers and leverage our brands; trends and competition in the lodging industry; the expected growth of demand for lodging; and other factors and risks detailed in our filings with the U.S. Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.
H World undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
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