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Oct 16,2018

Huazhu Group Limited Announces Its Preliminary Results for Hotel Operation in the Third Quarter of 2018

SHANGHAI, China, Oct. 16, 2018 (GLOBE NEWSWIRE) -- Huazhu Group Limited (NASDAQ: HTHT) (“Huazhu”, or the “Company”), a leading and fast-growing multi-brand hotel group in China, today announced its preliminary results for the hotel operation in the third quarter ended September 30, 2018.

 

2018 Q3 Revenues expected to exceed the high-end of guidance
Due to the better-than-expected hotel performance, the unaudited revenue for 2018 Q3 exceeded the high end of our previous revenue guidance (10.5%-12.5%) by a few percentage points, subject to the review by our auditors.

 

Operating Metrics

  For the quarter ended  
  September 30, June 30, September 30, yoy
  2017   2018   2018   change
Occupancy rate (as a percentage)      
  Leased and owned hotels 92.8 % 91.4 % 92.0 % -0.8 %
  Manachised hotels 94.1 % 89.8 % 91.1 % -3.1 %
  Franchised hotels 78.9 % 78.7 % 80.7 % 1.8 %
  Blended 93.1 % 89.6 % 90.7 % -2.3 %
Average daily room rate  (in RMB)      
  Leased and owned hotels 257   270   279   8.8 %
  Manachised hotels 204   212   226   10.7 %
  Franchised hotels 236   248   264   11.7 %
  Blended 218   226   239   9.8 %
RevPAR  (in RMB)        
  Leased and owned hotels 238   246   257   7.8 %
  Manachised hotels 192   190   205   7.1 %
  Franchised hotels 186   195   213   14.3 %
  Blended 203   203   217   7.1 %
         
 

 

 
Like-for-like performance for hotels opened for at least 18 months during the current quarter
       
  As of and for the quarter ended  
  September 30, yoy
  2017   2018   change
Total   2,908     2,908    
  Leased and owned hotels   551     551    
  Manachised and franchised hotels   2,357     2,357    
Occupancy rate (as a percentage) 95.5 % 93.2 % -2.3 %
Average daily room rate (in RMB) 208   222   6.7 %
RevPAR (in RMB) 199   207   4.2 %
       
 

Hotel Development

  Number of hotels in operation   Number of rooms in operation
  Opened  Closed (1) Net added As of    Net added As of 
  in Q3 2018 in Q3 2018 in Q3 2018 September 30, 2018   in Q3 2018 September 30, 2018
Leased and owned hotels   30   (5 )   25   698     594   86,825
Manachised and franchised hotels   205   (78 )   127   3,357     15,505   322,691
Total   235   (83 )   152   4,055     16,099   409,516
(1) Reasons for closures include property-related issues, operating loss and non-comliance issues. As of September 30, 2018, 14 manachised and franchised hotels were temporarily closed for brand upgrade.

 

   
  Number of hotels in pipeline
as of September 30, 2018
Leased hotels   42
Manachised and franchised hotels   882
Total(2)   924
(2) Including 150 hotels under brands of ibis, ibis Styles, Mercure, Grand Mercure and Novotel; 137 hotels under brands of Orange Select and Crystal Orange,13 hotels under brand of Blossom Hill.

 

Business Update by Segment

Hotel breakdown by segment    
   
  Number of hotels in operation
  Net added  As of 
  in Q3 2018 September 30, 2018
Economy hotels 1   2,858
  HanTing Hotel 19   2,255
  Leased hotels (2 ) 426
  Manachised hotels 21   1,825
  Franchised hotels 0   4
  Hi Inn (3 ) 392
  Leased hotels (1 ) 28
  Manachised hotels (2 ) 315
  Franchised hotels 0   49
  Elan Hotel (14 ) 204
  Manachised hotels (16 ) 172
  Franchised hotels 2   32
  Orange Hotel (1 ) 7
  Leased hotels (1 ) 5
  Manachised hotels 0   1
  Franchised hotels 0   1
Midscale and upscale hotels 151   1,197
  JI Hotel 49   501
  Leased hotels 0   91
  Manachised hotels 48   407
  Franchised hotels 1   3
  Starway Hotel 16   193
  Leased hotels 0   2
  Manachised hotels 16   161
  Franchised hotels 0   30
  Joya Hotel (1 ) 6
  Leased hotels 0   4
  Manachised hotels (1 ) 1
  Franchised hotels 0   1
  Manxin Hotels & Resorts 4   21
  Leased hotels 1   4
  Manachised hotels 3   14
  Franchised hotels 0   3
  HanTing Premium Hotel 14   59
  Leased hotels 2   19
  Manachised hotels 12   40
  Ibis Hotel 13   125
  Leased and owned hotels 0   19
  Manachised hotels 16   67
  Franchised hotels (3 ) 39
  Ibis Styles Hotel 5   28
  Leased hotels 0   1
  Manachised hotels 5   25
  Franchised hotels 0   2
  Mercure Hotel 7   35
  Leased hotels 5   9
  Manachised hotels 2   21
  Franchised hotels 0   5
  Novotel Hotel 2   7
  Leased hotels 1   1
  Manachised hotels 0   4
  Franchised hotels 1   2
  Grand Mercure 0   6
  Leased hotels 0   1
  Manachised hotels 0   3
  Franchised hotels 0   2
  Orange Select 16   143
  Leased hotels 2   50
  Manachised hotels 7   61
  Franchised hotels 7   32
  Crystal Orange 5   52
  Leased hotels 0   20
  Manachised hotels 1   19
  Franchised hotels 4   13
  Blossom Hill 21   21
  Leased hotels 18   18
  Manachised hotels 3   3
Total   152     4,055
     

 

Same-hotel operational data by segment                    
  Number of hotels in operation Same-hotel RevPAR   Same-hotel ADR   Same-hotel Occupancy  
  As of For the quarter ended   For the quarter ended   For the quarter ended  
  September 30, September 30, yoy change September 30, yoy change September 30, yoy change
  2017 2018 2017 2018 2017 2018 2017   2018  
Economy hotels   2,425   2,425   178   185 4.1 %   182   196 7.2 % 98 % 95 % -2.8 %
  Leased hotels   450   450   182   197 8.3 %   192   208 8.5 % 95 % 94 % -0.2 %
  Manachised and franchised hotels   1,975   1,975   177   182 2.9 %   180   192 6.7 % 98 % 95 % -3.5 %
Midscale and upscale hotels   483   483   272   284 4.3 %   308   323 5.0 % 88 % 88 % -0.5 %
  Leased and owned hotels   101   101   326   339 4.1 %   356   374 5.1 % 92 % 91 % -0.9 %
  Manachised and franchised hotels   382   382   250   262 4.4 %   288   302 4.9 % 87 % 87 % -0.4 %
Total   2,908   2,908   199   207 4.2 %   208   222 6.7 % 96 % 93 % -2.3 %
                       

The Company consolidated the results of the acquired Crystal Orange Hotels since May 25, 2017, which has a significant impact on our blended RevPAR, as follows:

The year-over-year growth rate for blended RevPAR  
  2018 Q1 2018 Q2 2018 Q3
As reported 13.7 % 13.2 % 7.1 %
Excluding Crystal Orange 9.8 % 10.7 % 7.5 %
       

About Huazhu Group Limited
Huazhu Group Limited is a leading hotel operator and franchisor in China. As of September 30, 2018, the Company had 4,055 hotels or 409,516 rooms in operation. With a primary focus on economy and midscale hotel segments, Huazhu’s brands include Hi Inn, Elan Hotel, HanTing Hotel, HanTing Premium Hotel, JI Hotel, Starway Hotel, Manxin Hotel, Joya Hotel, Crystal Orange Hotel, Orange Hotel Select, Orange Hotel and Blossom Hill. The Company also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in Pan-China region.
The Company's business includes leased and owned, manachised and franchised models. Under the lease and ownership model, the Company directly operates hotels typically located on leased or owned properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers it appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees but does not appoint on-site hotel managers. The Company applies a consistent standard and platform across all of its hotels. As of September 30, 2018, Huazhu Group operates 21 percent of its hotel rooms under lease and ownership model, 79 percent under manachise and franchise models.

For more information, please visit the Company’s website: http://ir.huazhu.com .

Safe Harbor Statement Under the 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; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; the expected growth of the lodging market in China; and other factors and risks detailed in our filings with the 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.
The Company 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.

Contact Information
Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com

 

Source: Huazhu Group Limited

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