Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “the
Company”, “we” or “our”), a world-leading hotel group, today
announced its unaudited financial results for the second quarter
and interim ended June 30, 2021.
As of June 30, 2021, Huazhu’s worldwide hotel
network in operation totaled 7,126 hotels and 692,284 rooms,
including 122 hotels from DH. During the second quarter of 2021,
our Legacy-Huazhu business opened 399 hotels, including 18 leased
(or leased-and-operated) hotels and 381 manachised (or
franchised-and-managed) hotels and franchised hotels, and closed a
total of 156 hotels, including 7 leased hotels and 149 manachised
and franchised hotels. During the second quarter of 2021, the
Legacy-DH business opened 2 hotels, including 1 leased hotel and 1
manachised and franchised hotel. As of June 30, 2021, Huazhu had a
total of 2,734 unopened hotels in the pipeline, including 2,696
hotels from the Legacy-Huazhu business and 38 hotels from the
Legacy-DH business.
Legacy-Huazhu Only
– Second Quarter of 2021 Operational
Highlights
As of June 30, 2021, Legacy-Huazhu had
7,004 hotels in operation, including 675 leased and owned hotels,
and 6,329 manachised hotels and franchised hotels. In addition, as
of the same date, Legacy-Huazhu had 667,670 hotel rooms in
operation, including 91,892 rooms under the lease and ownership
model, and 575,778 rooms under the manachise and franchise models.
Legacy-Huazhu also had 2,696 hotels in the pipeline, including
16 leased and owned hotels and 2,680 manachised and franchised
hotels. The following discusses Legacy-Huazhu’s RevPAR, average
daily room rate (“ADR”) and occupancy rate for its leased and owned
hotels, as well as manachised and franchised hotels (excluding
hotels under governmental requisition) for the periods
indicated.
- The ADR was RMB255 in the second
quarter of 2021, compared with RMB185 in the second quarter of
2020, RMB209 in the previous quarter, and RMB236 in the second
quarter of 2019.
- The occupancy rate for all
Legacy-Huazhu hotels in operation was 82.3% in the second quarter
of 2021, compared with 68.8% in the second quarter of 2020, 66.2%
in the previous quarter, and 86.9% in the second quarter of
2019.
- Blended RevPAR was RMB210 in the
second quarter of 2021, compared with RMB127 in the second quarter
of 2020, RMB138 in the previous quarter, and RMB206 in the second
quarter of 2019.
- For all Legacy-Huazhu hotels which
had been in operation for at least 18 months, the same-hotel RevPAR
was RMB210 for the second quarter of 2021, representing a 58.1%
increase from RMB133 for the second quarter of 2020, with a 33.9%
increase in ADR and a 12.8-percentage-point increase in occupancy
rate; comparing the second quarter of 2021 with the pre-COVID-19
second quarter of 2019, RevPAR represented a 5.7% decrease from
RMB216 for the second quarter of 2019, with a 1.0% increase in ADR,
and a 6.0-percentage-point decrease in occupancy rate.
Legacy-DH Only
– Second Quarter of 2021 Operational
Highlights
As of June 30, 2021, Legacy-DH had 122
hotels in operation, including 74 leased and owned hotels and 48
manachised hotels and franchised hotels. In addition, as of the
same date, Legacy-DH had 24,614 hotel rooms in operation,
including 13,839 rooms under the lease and ownership model and
10,775 rooms under the manachise and franchise models.
Legacy-DH also had 38 hotels in the pipeline, including 27
leased and owned hotels and 11 manachised and franchised hotels.
The following discusses Legacy-DH’s RevPAR, ADR and occupancy rate
for its leased as well as manachised and franchised hotels
(excluding hotels temporarily closed) for the periods
indicated.
- The ADR was EUR82 in the second quarter of 2021, compared with
EUR87 in the second quarter of 2020 and EUR69 in the previous
quarter.
- The occupancy rate for all Legacy-DH hotels in operation was
24.4% in the second quarter of 2021, compared with 18.3% in the
second quarter of 2020 and 18.8% in the previous quarter.
- Blended RevPAR was EUR20 in the second quarter of 2021,
compared with EUR16 in the second quarter of 2020 and EUR13 in the
previous quarter.
Ji Qi, Founder, Executive Chairman and CEO of
Huazhu commented: “Our China business RevPAR recovered in the
second quarter to 102% of the same period of 2019, supported by
strong leisure travelling demand in May but offset by relatively
weak RevPAR recovery in June due to COVID-19 resurgence in
Guangdong Province and traffic control in Beijing for the
celebration of centenary of the Communist Party of China. RevPAR
recovery momentum resumed since early July. However, unfortunately,
the Delta variant of COVID-19 was again detected in Nanjing since
late July, with further spreading into many other provinces and
cities. The Delta variant prompted the Chinese government posed
another round of strict travelling restrictions which seriously
affected our performance in August. For our European business,
thanks to continued progress of vaccination and easing
restrictions, the RevPAR recovered to 50-60% of 2019 level during
the summer holiday.”
“Looking ahead,” Mr. Ji continued,
“uncertainties brought by the pandemic may exist for a
longer-than-expected time, and we expect to be well prepared to
overcome any business turbulences in the near-term. Nevertheless,
in the long term, we have high confidence in China’s future
economic growth and think the upward trend of the China lodging
industry remains intact. Therefore, we will be implementing our
strategies, such as further penetration of lower-tier cities,
speeding up of upper-midscale and upscale segments, organizational
upgrades and talent acquisition to support our sustainable
growth.”
Second quarter and Interim of 2021
Unaudited Financial Results
(RMB in millions) |
Q2 2020 |
Q1 2021 |
Q2 2021 |
H1 2020 |
H1 2021 |
Revenue: |
|
|
|
|
|
Leased and owned hotels |
1,236 |
1,398 |
2,282 |
2,752 |
3,680 |
Manachised and franchised hotels |
676 |
897 |
1,275 |
1,141 |
2,172 |
Others |
41 |
32 |
30 |
73 |
62 |
Total revenue |
1,953 |
2,327 |
3,587 |
3,966 |
5,914 |
|
|
|
|
|
|
Revenues for the second quarter
of 2021 was RMB3.6 billion (US$556 million), representing an 83.7%
year-over-year increase and a 54.1% sequential increase. Revenue
from Legacy-Huazhu for the second quarter of 2021 was RMB3.4
billion, representing an 84.6% year-over-year increase. Revenue
from our Legacy-Huazhu business was lower than our revenue
guidance, mainly due to the COVID-19 resurgence in Guangdong
Province and traffic control in Beijing for the celebration of
centenary of the Communist Party of China since late May. However,
if excluding the impact of Guangdong Province and Beijing, our
revenue from our Legacy-Huazhu business was in line with our
revenue guidance.
Revenue for the first half of 2021 was RMB5.9
billion (US$916 million), representing an increase of 49.1% from
the first half of 2020. Revenue from Legacy-Huazhu for the first
half of 2021 was RMB5.5 billion, representing a 78.1%
year-over-year increase.
Revenue from leased and owned
hotels for the second quarter of 2021 was RMB2.3 billion
(US$353 million), representing an 84.6% year-over-year increase and
a 63.2% sequential increase. Revenue from Legacy-Huazhu from leased
and owned hotels for the second quarter of 2021 was RMB2.1 billion,
representing an 84.2% year-over-year increase.
For the first half of 2021, revenue from leased
and owned hotels was RMB3.7 billion (US$570 million), representing
a 33.7% year-over-year increase. Revenue from Legacy-Huazhu from
leased and owned hotels for the first half of 2021 was RMB3.3
billion, representing a 72.2% year-over-year increase.
Revenue from manachised and franchised
hotels for the second quarter of 2021 was RMB1.3 billion
(US$198 million), representing an 88.6% year-over-year increase and
a 42.1% sequential increase. Revenue from Legacy-Huazhu from
manachised and franchised hotels for the second quarter of 2021 was
RMB1.3 billion, representing an 88.5% year-over-year increase.
For the first half of 2021, revenue from
manachised and franchised hotels was RMB2.2 billion (US$336
million), representing a 90.4% year-over-year increase. These
hotels accounted for 36.7% of revenue, compared to 28.8% of revenue
for the first half of 2020. Revenue from Legacy-Huazhu from
manachised and franchised hotels for the first half of 2021 was
RMB2.2 billion, representing a 91.3% year-over-year increase.
Other revenue represent revenue
generated from businesses other than our hotel operations, which
mainly includes revenue from the provision of IT products and
services to hotels, and revenue from Huazhu Mall™ and other revenue
from the Legacy-DH business, totaling RMB30 million (US$5 million)
in the second quarter of 2021, compared to RMB41 million in the
second quarter of 2020 and RMB32 million in the previous
quarter.
For the first half of 2021, other revenue was
RMB62 million (US$10 million), compared to RMB73 million in the
first half of 2020.
(RMB in millions) |
Q2 2020 |
Q1 2021 |
Q2 2021 |
H1 2020 |
H1 2021 |
Operating costs and expenses: |
|
|
|
|
|
Hotel operating costs |
2,135 |
2,463 |
2,739 |
4,512 |
5,202 |
Other operating costs |
7 |
12 |
12 |
15 |
24 |
Selling and marketing expenses |
107 |
107 |
161 |
253 |
268 |
General and administrative expenses |
263 |
328 |
392 |
579 |
720 |
Pre-opening expenses |
99 |
21 |
16 |
210 |
37 |
Total operating costs and expenses |
2,611 |
2,931 |
3,320 |
5,569 |
6,251 |
|
|
|
|
|
|
Hotel operating costs for the
second quarter of 2021 were RMB2.7 billion (US$424 million),
compared to RMB2.1 billion in the second quarter of 2020 and RMB2.5
billion in the previous quarter. Hotel operating costs from
Legacy-Huazhu for the second quarter of 2021 were RMB2.2 billion,
which represented 65.5% of the quarter’s revenues, compared to
93.4% for the second quarter in 2020 and 92.8% for the previous
quarter.
For the first half of 2021, hotel operating
costs were RMB5.2 billion (US$806 million), compared to RMB4.5
billion in 2020. Hotel operating costs from Legacy-Huazhu for the
first half of 2021 were RMB4.2 billion, which represented 76.2% of
revenue, compared to 108.6% for 2020.
Selling and marketing expenses
for the second quarter of 2021 were RMB161 million (US$25 million),
compared to RMB107 million in the second quarter of 2020 and RMB107
million in the previous quarter. Selling and marketing expenses
from Legacy-Huazhu for the second quarter of 2021 were RMB129
million, which represented 3.8% of the quarter’s revenue, compared
to RMB71 million or 3.9% of revenue for the second quarter in 2020,
and RMB72 million or 3.3% of revenue for the previous quarter.
For the first half of 2021, selling and
marketing expenses were RMB268 million (US$41 million), compared to
RMB253 million in 2020. Selling and marketing expenses from
Legacy-Huazhu for the first half of 2021 were RMB201 million, which
represented 3.6% of revenue, compared to RMB137 million or 4.4% of
revenue for the first half of 2020.
General and administrative
expenses for the second quarter of 2021 were RMB392
million (US$61 million), compared to RMB263 million in the second
quarter of 2020 and RMB328 million in the previous quarter. General
and administrative expenses from Legacy-Huazhu for the second
quarter of 2021 were RMB294 million, which represented 8.7% of the
quarter’s revenue, compared to RMB176 million or 9.7% for the
second quarter in 2020 and RMB255 million or 11.7% for the previous
quarter.
For the first half of 2021, general and
administrative expenses were RMB720 million (US$112 million),
compared to RMB579 million in 2020. General and administrative
expenses from Legacy-Huazhu for the first half of 2021 were RMB549
million, which represented 9.9% of revenue, compared to RMB402
million or 12.9% of revenue for the first half of 2020.
Pre-opening expenses for the
second quarter of 2021 were mostly related to Legacy-Huazhu
totaling RMB16 million (US$3 million), compared to RMB99 million in
the second quarter of 2020 and RMB21 million in the previous
quarter.
Pre-opening expenses for the first half of 2021
were RMB37 million (US$6 million), compared to RMB210 million in
2020, representing a year-over-year decrease of 82.4%. Pre-opening
expenses as a percentage of revenue was 0.6% in 2021, compared to
5.3% in 2020.
Other operating income, net for
the second quarter of 2021 was RMB362 million (US$56 million),
compared to RMB164 million in the second quarter of 2020 and RMB29
million in the previous quarter. The increase was mainly due to
subsidy income from the Legacy-DH business due to COVID-19
impact.
Other operating income, net for the first half
of 2021 was RMB391 million (US$61 million), compared to RMB252
million in 2020.
Income from operations for the
second quarter of 2021 was RMB629 million (US$97 million), compared
to a negative RMB494 million in the second quarter of 2020 and a
negative RMB575 million in the previous quarter. Excluding
share-based compensation expenses, adjusted income from operations
(non-GAAP) for the second quarter of 2021 was RMB657 million
(US$101 million), compared to a negative RMB456 million in the
second quarter of 2020 and a negative RMB540 million in the
previous quarter. Income from operations from Legacy-Huazhu for the
second quarter of 2021 was RMB763 million, compared to a negative
RMB207 million in the second quarter of 2020 and a negative RMB172
million in the previous quarter.
Income from operations for the first half of
2021 was RMB54 million (US$8 million), compared to a negative
RMB1.4 billion in 2020. Excluding share-based compensation
expenses, adjusted income from operations (non-GAAP) for the first
half of 2021 was RMB117 million (US$18 million), compared to
adjusted loss from operations (non-GAAP) of RMB1.3 billion in 2020.
Income from operations from Legacy-Huazhu for the first half of
2021 was RMB592 million, compared to a loss from operations of
RMB938 million in 2020.
Operating margin, defined as
income from operations as a percentage of revenues, for the second
quarter of 2021, was 17.5%. Operating margin from Legacy-Huazhu for
the second quarter of 2021 was 22.7%, compared with a negative
11.4% in the second quarter of 2020 and a negative 7.9% in the
previous quarter.
Operating margin for the first half of 2021 was
0.9%. Operating margin from Legacy-Huazhu for the first half of
2021 was 10.7%, compared with a negative 30.2% in 2020.
Other expense, net for the
second quarter of 2021 was RMB61 million (US$9 million), compared
to other income, net RMB21 million for the second quarter of 2020
and other income, net RMB262 million for the previous quarter.
Other income, net for the first half of 2021 was
RMB201 million (US$31 million), compared to a negative RMB81
million in 2020. The increase was mainly due to gains from selling
AccorHotels shares.
Unrealized losses from fair value
changes of equity securities for the second quarter of
2021 were RMB58 million (US$9 million), compared to RMB34 million
in the second quarter of 2020, and unrealized gains from fair value
changes of RMB238 million in the previous quarter. Unrealized gains
(losses) from fair value changes of equity securities mainly
represents the unrealized gains (losses) from our investment in
equity securities with readily determinable fair values, such as
AccorHotels.
For the first half of 2021, unrealized gains
from fair value changes of equity securities were RMB180 million
(US$28 million), compared to unrealized losses from fair value
changes of equity securities of RMB1.0 billion in 2020.
Income tax expense for the
second quarter of 2021 was RMB132 million (US$20 million), compared
to income tax benefit of RMB68 million in the same period of 2020
and income tax benefit of RMB122 million in the previous quarter.
For the first half of 2021, income tax expense was RMB10 million
(US$1 million), compared to income tax benefit of RMB98 million in
2020.
Net income attributable to Huazhu Group
Limited for the second quarter of 2021 was RMB378 million
(US$59 million), compared to a net loss of RMB548 million in the
second quarter of 2020 and net loss attributable to Huazhu Group
Limited of RMB248 million in the previous quarter. Excluding
share-based compensation expenses and the unrealized gains (losses)
from fair value changes of equity securities, adjusted net income
attributable to Huazhu Group Limited (non-GAAP) for the second
quarter of 2021 was RMB464 million (US$72 million), compared to a
negative RMB476 million in the second quarter of 2020 and a
negative RMB451 million in the previous quarter. Net income
attributable to Huazhu Group Limited from Legacy-Huazhu for the
second quarter of 2021 was RMB492 million, compared to a negative
RMB325 million in the second quarter of 2020 and a positive RMB53
million in the previous quarter. The adjusted net income
attributable to Huazhu Group Limited (non-GAAP) from Legacy-Huazhu
for the second quarter of 2021 was RMB579 million, compared with a
negative RMB253 million in the second quarter of 2020 and a
negative RMB150 million in the previous quarter.
Net income attributable to Huazhu Group Limited
for the first half of 2021 was RMB130 million (US$21 million),
compared with a negative RMB2.7 billion in 2020. Excluding
share-based compensation expenses and the unrealized gains (losses)
from fair value changes of equity securities, adjusted net income
attributable to Huazhu Group Limited (non-GAAP) for the first half
of 2021 was RMB13 million (US$3 million). Net income attributable
to Huazhu Group Limited from Legacy-Huazhu for the first half of
2021 was RMB545 million, compared to a net loss attributable to
Huazhu Group Limited of RMB2.3 billion in 2020. The adjusted net
income attributable to Huazhu Group Limited (non-GAAP) from
Legacy-Huazhu for the first half of 2021 was RMB429 million,
compared with an adjusted net loss attributable to Huazhu Group
Limited (non-GAAP) of RMB1.2 billion in 2020.
Basic and diluted earnings per
share/American depositary share (ADS). For the second
quarter of 2021, basic and diluted earnings per share were RMB0.12
(US$0.02). Excluding share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, adjusted basic earnings per share (non-GAAP) were
RMB0.15 (US$0.02), and adjusted diluted earnings per share
(non-GAAP) were RMB0.14 (US$0.02). Basic earnings per ADS were
RMB1.22 (US$0.19), and diluted earnings per ADS were RMB1.17
(US$0.18). Excluding share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, adjusted basic earnings per ADS (non-GAAP) were RMB1.49
(US$0.23), and adjusted diluted earnings per ADS (non-GAAP) were
RMB1.43 (US$0.22).
For the first half of 2021, basic and diluted
earnings per share were RMB0.04 (US$0.01). Excluding share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities, adjusted basic and diluted earnings
per share (non-GAAP) were RMB0.00 (US$0.00). Basic earnings per ADS
were RMB0.42 (US$0.07), and diluted earnings per ADS were RMB0.41
(US$0.06). Excluding share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, adjusted basic earnings per ADS (non-GAAP) were RMB0.05
(US$0.01), and adjusted diluted earnings per ADS (non-GAAP) were
RMB0.04 (US$0.01).
EBITDA (non-GAAP) for the
second quarter of 2021 was RMB957 million (US$148 million),
compared with a negative RMB169 million in the second quarter of
2020 and a positive RMB70 million in the previous quarter. EBITDA
(non-GAAP) from Legacy-Huazhu for the second quarter of 2021 was
RMB1.0 billion, compared with RMB66 million in the second quarter
of 2020 and RMB410 million in the previous quarter. Excluding
share-based compensation expenses and unrealized gains (losses)
from fair value changes of equity securities, adjusted EBITDA
(non-GAAP) for the second quarter of 2021 was RMB1.0 billion
(US$161 million), compared with a negative RMB97 million in the
second quarter of 2020 and a negative RMB133 million in the
previous quarter. The adjusted EBITDA (non-GAAP) from Legacy-Huazhu
for the second quarter of 2021 was RMB1.1 billion, compared with
RMB138 million in the second quarter of 2020 and RMB207 million in
the previous quarter.
EBITDA (non-GAAP) for the first half of 2021 was
RMB1.0 billion (US$160 million), compared with a negative RMB1.9
billion in 2020. EBITDA (non-GAAP) from Legacy-Huazhu for the first
half of 2021 was RMB1.4 billion, compared with a negative RMB1.6
billion in 2020. Excluding share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, adjusted EBITDA (non-GAAP) for the first half of 2021
was RMB910 million (US$142 million), compared with a negative
RMB801 million in 2020. The adjusted EBITDA (non-GAAP) from
Legacy-Huazhu for the first half of 2021 was RMB1.3 billion,
compared with a negative RMB493 million in 2020.
Cash flow. Operating cash
inflow for the second quarter of 2021 was a RMB1.2 billion (US$192
million). Investing cash outflow for the second quarter of 2021 was
RMB582 million (US$91 million), including RMB348 million for
partial payments of CitiGO acquisition4. Financing cash outflow for
the second quarter of 2021 was RMB185 million (US$28 million).
Operating cash inflow for the first half of 2021
was RMB281 million (US$43 million), compared to RMB834 million cash
outflow in 2020. Investing cash inflow for the first half of 2021
was RMB132 million (US$22 million), compared to RMB5.5 billion cash
outflow in 2020. Financing cash outflow for the first half of 2021
was RMB1.2 billion (US$184 million), compared to RMB2.5 billion in
2020.
Cash and cash equivalents and Restricted
cash. As of June 30, 2021, the Company had a total balance
of cash and cash equivalents of RMB6.2 billion (US$960 million) and
restricted cash of RMB57 million (US$9 million).
Debt financing. As of June 30,
2021, the Company had a total debt balance of RMB10.7 billion
(US$1.7 billion) and the unutilized credit facility available to
the Company was RMB6.8 billion.
COVID-19 update For our
Legacy-Huazhu business, following the relative weak RevPAR recovery
in June due to impact of COVID-19 resurgence in Guangdong Province
and traffic control in Beijing for the celebration of centenary of
the Communist Party of China, our RevPAR recovery momentum resumed
quickly in early July. However, unfortunately, since late July,
with the spread of the Delta variant from Nanjing to several
provinces and cities, our RevPAR significantly dropped to only
about 50% of the 2019 level as the government imposed another round
of strict travelling restrictions. On the positive side, with the
government’s strong capability of prevention and control, daily new
confirmed cases saw a significant decline recently. Many cities
have recently lowered the risk level from high or middle to low
level. We are expecting the recovery should resume soon after
travelling restrictions are being gradually eased.
Steigenberger Hotels AG and its subsidiaries
(“DH”) saw an initial recovery of hotel demand along with
vaccination process in Germany since the first lockdown in November
2020. As of August 23rd, 2021, about 64% of the German population
have received at least one shot and 59% of the population is fully
vaccinated. In August, the recovery continued with the occupancy
rate reaching 50% and RevPAR recovered to 67% of 2019. However, we
remain cautious on the future recovery as European governments are
still carefully monitoring the situation regarding the Delta
variant and a potential impact from the fourth wave. Additionally,
we received and recorded a total of EUR38 million in subsidies from
the German government in the second quarter, relating to the 2020
lockdown period. Meanwhile, DH is continuing to implement further
cost reduction and cash flow measures, especially regarding
personnel and lease costs.
Resignation of Director
Ms. Min (Jenny) Zhang resigned as a director and
the vice-chairlady of the Company for personal reasons, effective
August 24, 2021. Ms. Zhang’s resignation from the board of
directors was not a result of any disagreement with the Company on
any matter related to the operations, policies, or practices of the
Company.
Mr. Qi Ji, the Company’s chairman and chief
executive officer, said: “I would like to thank Jenny for her
contributions, service and commitment to the Company throughout her
many years with the Company, and wish her every success in her
future endeavors.”
Upon the effectiveness of Ms. Zhang’s
resignation, the Company’s board of directors will consist of eight
directors (and one alternative director), including five
independent directors.
Guidance In the third quarter
of 2021, Huazhu expects revenue growth to be in the range of 8%-12%
compared to the third quarter of 2020, or 4%-8% if excluding DH. To
provide more meaningful guidance excluding the impact of COVID-19,
Huazhu expects revenue growth to be in the range of 12%-16%
compared to pre-COVID-19 results in the third quarter of 2019, or
revenue reduction to be in the range of 3%-7% if excluding DH.
Considering the effects of COVID-19 resurgence
in Guangdong, traffic control in Beijing since late May, and the
influence of the Delta variant spreading from Nanjing to several
cities in China recently, we lowered our full-year revenue growth
guidance. For the full year of 2021, we expect revenue growth to
range from a 29% to 33%, or to range from 34% to 38% if excluding
DH. To provide more meaningful guidance excluding the impact of
COVID-19, Huazhu expects revenue growth to be in the range of
17%-21% as compared to pre-COVID-19 results of 2019, or to range
from 2%-6% if excluding DH.
The above guidance is based on our current
expectation that the recent Delta Variant of COVID-19 resurgence
can be well contained by the beginning of September and there will
be no massive resurgence of COVID-19 in the remaining of the
year.
The above forecast reflects the Company’s
current and preliminary view, which is subject to change.
Conference CallHuazhu’s
management will host a conference call at 9 p.m. U.S. Eastern time
on Tuesday, August 24, 2021; or at 9 a.m. Hong Kong time on
Wednesday, August 25, 2021 following the announcement. The
conference call will be a Direct Event call. All participants must
preregister online prior to the call. Please use the link
http://apac.directeventreg.com/registration/event/2378336 to
complete the online registration at least 15 minutes prior to the
commencement of the conference call. Once preregistration has been
completed, participants will receive dial-in numbers, an event
passcode, and a unique registrant ID. To join the conference,
please dial the number you receive, enter the event passcode
followed by your unique registrant ID, and you will be joined to
the conference promptly. Please dial in approximately 10 minutes
before the scheduled time of the call.
A recording of the conference call will be
available after the conclusion of the conference call through
September 1, 2021. Please dial 855 452 5696 (for callers in the
U.S.); 400 632 2162 (for callers in mainland China); 800 963 117
(for callers in Hong Kong); or +61 2 8199 0299 (for callers outside
the U.S., mainland China and Hong Kong); and enter the passcode
2378336.
The conference call will also be webcast live
over the Internet and can be accessed by all interested parties at
the Company’s website, https://ir.huazhu.com.
Use of Non-GAAP Financial
MeasuresTo supplement the Company’s unaudited consolidated
financial results presented in accordance with U.S.
Generally-Accepted Accounting Principles (“GAAP”), the Company uses
the following non-GAAP measures defined as non-GAAP financial
measures by the SEC: hotel operating costs excluding share-based
compensation expenses; general and administrative expenses
excluding share-based compensation expenses; selling and marketing
expenses excluding share-based compensation expenses; adjusted
income from operations excluding share-based compensation expenses;
adjusted net income (loss) attributable to Huazhu Group Limited
excluding share-based compensation expenses and unrealized gains
(losses) from fair value changes of equity securities; adjusted
basic and diluted earnings per share/ADS excluding share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities; EBITDA; adjusted EBITDA excluding
share-based compensation expenses and unrealized gains (losses)
from fair value changes of equity securities; and adjusted EBITDA
margin; adjusted net income (loss) attributable to Huazhu Group
Limited excluding share-based compensation expenses and unrealized
gains (losses) from fair value changes of equity securities from
Legacy-Huazhu; EBITDA from Legacy-Huazhu; and adjusted EBITDA
excluding share-based compensation expenses and unrealized gains
(losses) from fair value changes of equity securities from
Legacy-Huazhu. The presentation of these non-GAAP financial
measures is not intended to be considered in isolation or as a
substitute for the financial information prepared and presented in
accordance with U.S. GAAP. For more information on these non-GAAP
financial measures, please see the table captioned “Reconciliations
of GAAP and non-GAAP results” set forth at the end of this release.
The Company believes that these non-GAAP financial measures provide
meaningful supplemental information regarding Company performance
by excluding share-based compensation expenses and unrealized gains
(losses) from fair value changes of equity securities that may not
be indicative of Company operating performance. The Company
believes that both management and investors benefit from referring
to these non-GAAP financial measures in assessing Company
performance and when planning and forecasting future periods. These
non-GAAP financial measures also facilitate management’s internal
comparisons to the Company’s historical performance. The Company
believes these non-GAAP financial measures are also useful to
investors in allowing for greater transparency with respect to
supplemental information used regularly by Company management in
financial and operational decision-making. A limitation of using
non-GAAP financial measures excluding share-based compensation
expenses and unrealized gains (losses) from fair value changes of
equity securities is that share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities have been and will continue to be significant and
recurring in the Company’s business. Management compensates for
these limitations by providing specific information regarding the
GAAP amounts excluded from each non-GAAP measure. The accompanying
tables have more details on the reconciliations between GAAP
financial measures that are most directly comparable to non-GAAP
financial measures.
The Company believes that EBITDA is a useful
financial metric to assess the operating and financial performance
before the impact of investing and financing transactions and
income taxes, given the significant investments that the Company
has made in leasehold improvements, depreciation and amortization
expense that comprise a significant portion of the Company’s cost
structure. In addition, the Company believes that EBITDA is widely
used by other companies in the lodging industry and may be used by
investors as a measure of financial performance. The Company
believes that EBITDA information provides investors with a useful
tool for comparability between periods because it eliminates
depreciation and amortization expense attributable to capital
expenditures. The Company also uses adjusted EBITDA, which is
defined as EBITDA before share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities, to assess operating results of its hotels in operation.
The Company believes that the exclusion of share-based compensation
expenses and unrealized gains (losses) from fair value changes of
equity securities helps facilitate year-on-year comparisons of the
results of operations as the share-based compensation expenses and
unrealized gains (losses) from fair value changes of equity
securities may not be indicative of Company operating
performance.
The Company believes that unrealized gains and
losses from changes in fair value of equity securities are
generally meaningless in understanding the Company’s reported
results or evaluating its economic performance of its businesses.
These gains and losses have caused and will continue to cause
significant volatility in reported periodic earnings.
Therefore, the Company believes adjusted EBITDA
more closely reflects the performance capability of our hotels. The
presentation of EBITDA and adjusted EBITDA should not be construed
as an indication that the Company’s future results will be
unaffected by other charges and gains considered to be outside the
ordinary course of business.
The use of EBITDA and adjusted EBITDA has
certain limitations. Depreciation and amortization expense for
various long-term assets (including land use rights), income tax,
interest expense and interest income have been and will be incurred
and are not reflected in the presentation of EBITDA. Share-based
compensation expenses and unrealized gains (losses) from fair value
changes of equity securities have been and will be incurred and are
not reflected in the presentation of adjusted EBITDA. Each of these
items should also be considered in the overall evaluation of the
results. The Company compensates for these limitations by providing
the relevant disclosure of depreciation and amortization, interest
income, interest expense, income tax expense, share-based
compensation expenses, and unrealized gains (losses) from fair
value changes of equity securities and other relevant items both in
the reconciliations to the U.S. GAAP financial measures and in the
consolidated financial statements, all of which should be
considered when evaluating the performance of the Company.
The terms EBITDA and adjusted EBITDA are not
defined under U.S. GAAP, and neither EBITDA nor adjusted EBITDA is
a measure of net income, operating income, operating performance or
liquidity presented in accordance with U.S. GAAP. When assessing
the operating and financial performance, investors should not
consider these data in isolation or as a substitute for the
Company’s net income, operating income or any other operating
performance measure that is calculated in accordance with U.S.
GAAP. In addition, the Company’s EBITDA or adjusted EBITDA may not
be comparable to EBITDA or adjusted EBITDA or similarly titled
measures utilized by other companies since such other companies may
not calculate EBITDA or adjusted EBITDA in the same manner as the
Company does.
Reconciliations of the Company’s non-GAAP
financial measures, including EBITDA and adjusted EBITDA, to the
consolidated statement of operations information are included at
the end of this press release.
About Huazhu Group
LimitedOriginated in China, Huazhu Group Limited is a
world-leading hotel group. As of June 30, 2021, Huazhu
operated 7,126 hotels with 692,284 rooms in operation in 17
countries. Huazhu’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 and CitiGO Hotel. Upon the completion of the acquisition of
DH on January 2, 2020, Huazhu added five brands to its
portfolio, including Steigenberger Hotels & Resorts, MAXX,
Jaz in the City, IntercityHotel and Zleep Hotels. In addition,
Huazhu 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.
Huazhu’s business includes leased and owned,
manachised and franchised models. Under the lease and ownership
model, Huazhu directly operates hotels typically located on leased
or owned properties. Under the manachise model, Huazhu manages
manachised hotels through the on-site hotel managers that Huazhu
appoints, and Huazhu collects fees from franchisees. Under the
franchise model, Huazhu provides training, reservations and support
services to the franchised hotels, and collects fees from
franchisees but does not appoint on-site hotel managers. Huazhu
applies a consistent standard and platform across all of its
hotels. As of June 30, 2021, Huazhu operates 15 percent of its
hotel rooms under lease and ownership model, and 85 percent under
manachise and franchise models.
For more information, please visit Huazhu’s
website: http://ir.huazhu.com.
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.
Huazhu 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.
—Financial Tables and Operational Data
Follow—
|
Huazhu Group Limited |
Unaudited Condensed Consolidated Balance
Sheets |
|
December 31, 2020 |
|
June 30, 2021 |
|
RMB |
|
RMB |
|
US$ |
|
|
|
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
7,026 |
|
|
6,201 |
|
|
960 |
|
Restricted cash |
64 |
|
|
57 |
|
|
9 |
|
Short-term investments |
3,903 |
|
|
2,727 |
|
|
422 |
|
Accounts receivable, net |
404 |
|
|
519 |
|
|
80 |
|
Loan receivables, net |
304 |
|
|
214 |
|
|
33 |
|
Amounts due from related parties, current |
178 |
|
|
82 |
|
|
13 |
|
Inventories |
89 |
|
|
82 |
|
|
13 |
|
Other current assets, net |
914 |
|
|
884 |
|
|
137 |
|
Total current assets |
12,882 |
|
|
10,766 |
|
|
1,667 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
6,682 |
|
|
6,982 |
|
|
1,081 |
|
Intangible assets, net |
5,945 |
|
|
5,902 |
|
|
914 |
|
Operating lease right-of-use assets |
28,980 |
|
|
29,787 |
|
|
4,613 |
|
Finance lease right-of-use assets |
2,041 |
|
|
1,914 |
|
|
297 |
|
Land use rights, net |
213 |
|
|
210 |
|
|
32 |
|
Long-term investments |
1,923 |
|
|
2,058 |
|
|
319 |
|
Goodwill |
4,988 |
|
|
5,268 |
|
|
816 |
|
Amounts due from related parties, non-current |
- |
|
|
63 |
|
|
10 |
|
Loan receivables, net |
135 |
|
|
86 |
|
|
13 |
|
Other assets, net |
743 |
|
|
812 |
|
|
126 |
|
Deferred tax assets |
623 |
|
|
753 |
|
|
117 |
|
Total assets |
65,155 |
|
|
64,601 |
|
|
10,005 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Short-term debt |
1,142 |
|
|
666 |
|
|
103 |
|
Accounts payable |
1,241 |
|
|
975 |
|
|
151 |
|
Amounts due to related parties |
132 |
|
|
511 |
|
|
79 |
|
Salary and welfare payables |
526 |
|
|
530 |
|
|
82 |
|
Deferred revenue |
1,272 |
|
|
1,357 |
|
|
210 |
|
Operating lease liabilities, current |
3,406 |
|
|
3,502 |
|
|
542 |
|
Finance lease liabilities, current |
31 |
|
|
41 |
|
|
6 |
|
Accrued expenses and other current liabilities |
2,440 |
|
|
2,168 |
|
|
337 |
|
Income tax payable |
339 |
|
|
258 |
|
|
40 |
|
Total current liabilities |
10,529 |
|
|
10,008 |
|
|
1,550 |
|
|
|
|
|
|
|
|
|
|
Long-term debt |
10,856 |
|
|
10,002 |
|
|
1,549 |
|
Operating lease liabilities, noncurrent |
27,048 |
|
|
27,758 |
|
|
4,299 |
|
Finance lease liabilities, noncurrent |
2,497 |
|
|
2,372 |
|
|
367 |
|
Deferred revenue |
662 |
|
|
704 |
|
|
109 |
|
Other long-term liabilities |
771 |
|
|
834 |
|
|
129 |
|
Deferred tax liabilities |
1,181 |
|
|
1,155 |
|
|
179 |
|
Retirement benefit obligations |
179 |
|
|
171 |
|
|
27 |
|
Total liabilities |
53,723 |
|
|
53,004 |
|
|
8,209 |
|
|
|
|
|
|
|
|
|
|
Equity: |
|
|
|
|
|
|
|
|
Ordinary shares |
0 |
|
|
0 |
|
|
0 |
|
Treasury shares |
(107 |
) |
|
(107 |
) |
|
(17 |
) |
Additional paid-in capital |
9,808 |
|
|
9,918 |
|
|
1,536 |
|
Retained earnings |
1,502 |
|
|
1,632 |
|
|
253 |
|
Accumulated other comprehensive income (loss) |
127 |
|
|
49 |
|
|
8 |
|
Total Huazhu Group Limited shareholders' equity |
11,330 |
|
|
11,492 |
|
|
1,780 |
|
Noncontrolling interest |
102 |
|
|
105 |
|
|
16 |
|
Total equity |
11,432 |
|
|
11,597 |
|
|
1,796 |
|
Total liabilities and equity |
65,155 |
|
|
64,601 |
|
|
10,005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group Limited |
Unaudited Condensed Consolidated Statements of
Comprehensive Income |
|
Quarter Ended |
|
Six Months Ended |
|
June 30, 2020 |
|
March 31, 2021 |
|
June 30, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
RMB |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
RMB |
|
|
RMB |
|
|
US$ |
|
|
(in millions, except shares, per share and per ADS
data) |
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leased and owned hotels |
1,236 |
|
|
1,398 |
|
|
2,282 |
|
|
353 |
|
|
2,752 |
|
|
3,680 |
|
|
570 |
|
Manachised and franchised hotels |
676 |
|
|
897 |
|
|
1,275 |
|
|
198 |
|
|
1,141 |
|
|
2,172 |
|
|
336 |
|
Others |
41 |
|
|
32 |
|
|
30 |
|
|
5 |
|
|
73 |
|
|
62 |
|
|
10 |
|
Total revenue |
1,953 |
|
|
2,327 |
|
|
3,587 |
|
|
556 |
|
|
3,966 |
|
|
5,914 |
|
|
916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hotel operating costs: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rents |
(833 |
) |
|
(945 |
) |
|
(949 |
) |
|
(147 |
) |
|
(1,699 |
) |
|
(1,894 |
) |
|
(293 |
) |
Utilities |
(91 |
) |
|
(140 |
) |
|
(107 |
) |
|
(17 |
) |
|
(223 |
) |
|
(247 |
) |
|
(38 |
) |
Personnel costs |
(508 |
) |
|
(630 |
) |
|
(757 |
) |
|
(117 |
) |
|
(1,151 |
) |
|
(1,387 |
) |
|
(215 |
) |
Depreciation and amortization |
(320 |
) |
|
(340 |
) |
|
(351 |
) |
|
(54 |
) |
|
(631 |
) |
|
(691 |
) |
|
(107 |
) |
Consumables, food and beverage |
(185 |
) |
|
(180 |
) |
|
(244 |
) |
|
(38 |
) |
|
(376 |
) |
|
(424 |
) |
|
(66 |
) |
Others |
(198 |
) |
|
(228 |
) |
|
(331 |
) |
|
(51 |
) |
|
(432 |
) |
|
(559 |
) |
|
(87 |
) |
Total hotel operating costs |
(2,135 |
) |
|
(2,463 |
) |
|
(2,739 |
) |
|
(424 |
) |
|
(4,512 |
) |
|
(5,202 |
) |
|
(806 |
) |
Other operating costs |
(7 |
) |
|
(12 |
) |
|
(12 |
) |
|
(2 |
) |
|
(15 |
) |
|
(24 |
) |
|
(4 |
) |
Selling and marketing expenses |
(107 |
) |
|
(107 |
) |
|
(161 |
) |
|
(25 |
) |
|
(253 |
) |
|
(268 |
) |
|
(41 |
) |
General and administrative expenses |
(263 |
) |
|
(328 |
) |
|
(392 |
) |
|
(61 |
) |
|
(579 |
) |
|
(720 |
) |
|
(112 |
) |
Pre-opening expenses |
(99 |
) |
|
(21 |
) |
|
(16 |
) |
|
(3 |
) |
|
(210 |
) |
|
(37 |
) |
|
(6 |
) |
Total operating costs and expenses |
(2,611 |
) |
|
(2,931 |
) |
|
(3,320 |
) |
|
(515 |
) |
|
(5,569 |
) |
|
(6,251 |
) |
|
(969 |
) |
Other operating income (expense), net |
164 |
|
|
29 |
|
|
362 |
|
|
56 |
|
|
252 |
|
|
391 |
|
|
61 |
|
Income (losses) from operations |
(494 |
) |
|
(575 |
) |
|
629 |
|
|
97 |
|
|
(1,351 |
) |
|
54 |
|
|
8 |
|
Interest income |
26 |
|
|
22 |
|
|
17 |
|
|
3 |
|
|
55 |
|
|
39 |
|
|
6 |
|
Interest expense |
(142 |
) |
|
(110 |
) |
|
(102 |
) |
|
(16 |
) |
|
(279 |
) |
|
(212 |
) |
|
(33 |
) |
Other (expense) income, net |
21 |
|
|
262 |
|
|
(61 |
) |
|
(9 |
) |
|
(81 |
) |
|
201 |
|
|
31 |
|
Unrealized gains (losses) from fair value changes of equity
securities |
(34 |
) |
|
238 |
|
|
(58 |
) |
|
(9 |
) |
|
(1,037 |
) |
|
180 |
|
|
28 |
|
Foreign exchange (loss) gain |
34 |
|
|
(197 |
) |
|
85 |
|
|
13 |
|
|
(24 |
) |
|
(112 |
) |
|
(17 |
) |
Income (Loss) before income taxes |
(589 |
) |
|
(360 |
) |
|
510 |
|
|
79 |
|
|
(2,717 |
) |
|
150 |
|
|
23 |
|
Income tax (expense) benefit |
68 |
|
|
122 |
|
|
(132 |
) |
|
(20 |
) |
|
98 |
|
|
(10 |
) |
|
(1 |
) |
Gain (Loss) from equity method investments |
(33 |
) |
|
(20 |
) |
|
(1 |
) |
|
(0 |
) |
|
(93 |
) |
|
(21 |
) |
|
(3 |
) |
Net income (loss) |
(554 |
) |
|
(258 |
) |
|
377 |
|
|
59 |
|
|
(2,712 |
) |
|
119 |
|
|
19 |
|
Net (income) loss attributable to noncontrolling interest |
6 |
|
|
10 |
|
|
1 |
|
|
0 |
|
|
29 |
|
|
11 |
|
|
2 |
|
Net income (loss) attributable to Huazhu Group Limited |
(548 |
) |
|
(248 |
) |
|
378 |
|
|
59 |
|
|
(2,683 |
) |
|
130 |
|
|
21 |
|
|
|
|
|
|
|
|
|
Other comprehensive income |
|
|
|
|
|
|
|
Gain arising from defined benefit plan, net of tax |
4 |
|
|
- |
|
|
- |
|
|
- |
|
|
7 |
|
|
- |
|
|
- |
|
Foreign currency translation adjustments, net of tax |
43 |
|
|
(55 |
) |
|
(23 |
) |
|
(4 |
) |
|
(24 |
) |
|
(78 |
) |
|
(12 |
) |
Comprehensive income (loss) |
(507 |
) |
|
(313 |
) |
|
354 |
|
|
55 |
|
|
(2,729 |
) |
|
41 |
|
|
7 |
|
Comprehensive (income) loss attributable to noncontrolling
interest |
6 |
|
|
10 |
|
|
1 |
|
|
0 |
|
|
29 |
|
|
11 |
|
|
2 |
|
Comprehensive income (loss) attributable to Huazhu Group
Limited |
(501 |
) |
|
(303 |
) |
|
355 |
|
|
55 |
|
|
(2,700 |
) |
|
52 |
|
|
9 |
|
|
|
|
|
|
|
|
|
Earnings (Losses) per share(1): |
|
|
|
|
|
|
|
Basic |
(0.19 |
) |
|
(0.08 |
) |
|
0.12 |
|
|
0.02 |
|
|
(0.94 |
) |
|
0.04 |
|
|
0.01 |
|
Diluted |
(0.19 |
) |
|
(0.08 |
) |
|
0.12 |
|
|
0.02 |
|
|
(0.94 |
) |
|
0.04 |
|
|
0.01 |
|
|
|
|
|
|
|
|
|
Earnings (Losses) per ADS: |
|
|
|
|
|
|
|
Basic |
(1.91 |
) |
|
(0.80 |
) |
|
1.22 |
|
|
0.19 |
|
|
(9.37 |
) |
|
0.42 |
|
|
0.07 |
|
Diluted |
(1.91 |
) |
|
(0.80 |
) |
|
1.17 |
|
|
0.18 |
|
|
(9.37 |
) |
|
0.41 |
|
|
0.06 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computation: |
|
|
|
|
|
Basic |
2,864,733,442 |
|
|
3,109,432,473 |
|
|
3,114,135,304 |
|
|
3,114,135,304 |
|
|
2,862,435,229 |
|
|
3,111,794,826 |
|
|
3,111,794,826 |
|
Diluted |
2,864,733,442 |
|
|
3,109,432,473 |
|
|
3,273,978,191 |
|
|
3,273,978,191 |
|
|
2,862,435,229 |
|
|
3,166,582,955 |
|
|
3,166,582,955 |
|
(1) Due to the sub-division of our shares in the second quarter,
the Company revised prior comparative periods to conform to the
current period presentation. |
|
|
Huazhu Group Limited |
Unaudited Condensed Consolidated Statements of Cash
Flows |
|
Quarter Ended |
|
Six Months Ended |
|
June 30, 2020 |
|
March 31, 2021 |
|
June 30, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
RMB |
RMB |
RMB |
US$ |
RMB |
|
RMB |
US$ |
|
( in millions) |
Operating activities: |
|
|
|
|
|
|
|
Net (loss) income |
(554 |
) |
|
(258 |
) |
|
377 |
|
|
59 |
|
|
(2,712 |
) |
|
119 |
|
|
19 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
Share-based compensation |
38 |
|
|
35 |
|
|
28 |
|
|
4 |
|
|
67 |
|
|
63 |
|
|
10 |
|
Depreciation and amortization,and other |
359 |
|
|
366 |
|
|
377 |
|
|
58 |
|
|
695 |
|
|
743 |
|
|
115 |
|
Impairment loss |
16 |
|
|
- |
|
|
9 |
|
|
1 |
|
|
118 |
|
|
9 |
|
|
1 |
|
Loss (Income) from equity method investments, net of dividends |
33 |
|
|
20 |
|
|
1 |
|
|
0 |
|
|
93 |
|
|
21 |
|
|
3 |
|
Investment (income) loss |
(11 |
) |
|
(264 |
) |
|
(50 |
) |
|
(8 |
) |
|
1,077 |
|
|
(314 |
) |
|
(49 |
) |
Changes in operating assets andliabilities |
470 |
|
|
(717 |
) |
|
472 |
|
|
73 |
|
|
(805 |
) |
|
(245 |
) |
|
(38 |
) |
Other |
161 |
|
|
(139 |
) |
|
24 |
|
|
5 |
|
|
633 |
|
|
(115 |
) |
|
(18 |
) |
Net cash provided by (used in) operating activities |
512 |
|
|
(957 |
) |
|
1,238 |
|
|
192 |
|
|
(834 |
) |
|
281 |
|
|
43 |
|
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
|
|
Capital expenditures |
(339 |
) |
|
(550 |
) |
|
(311 |
) |
|
(48 |
) |
|
(823 |
) |
|
(861 |
) |
|
(133 |
) |
Acquisitions, net of cash received |
(0 |
) |
|
- |
|
|
(346 |
) |
|
(54 |
) |
|
(5,056 |
) |
|
(346 |
) |
|
(54 |
) |
Purchase of investments |
(0 |
) |
|
(35 |
) |
|
(134 |
) |
|
(21 |
) |
|
(0 |
) |
|
(169 |
) |
|
(26 |
) |
Proceeds from maturity/sale ofinvestments |
35 |
|
|
1,256 |
|
|
174 |
|
|
27 |
|
|
371 |
|
|
1,430 |
|
|
222 |
|
Loan advances |
(24 |
) |
|
(22 |
) |
|
(31 |
) |
|
(5 |
) |
|
(82 |
) |
|
(53 |
) |
|
(8 |
) |
Loan collections |
47 |
|
|
63 |
|
|
45 |
|
|
7 |
|
|
71 |
|
|
108 |
|
|
17 |
|
Other |
- |
|
|
2 |
|
|
21 |
|
|
3 |
|
|
3 |
|
|
23 |
|
|
4 |
|
Net cash provided by (used in) investing activities |
(281 |
) |
|
714 |
|
|
(582 |
) |
|
(91 |
) |
|
(5,516 |
) |
|
132 |
|
|
22 |
|
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
|
|
Net proceeds from issuance of ordinary shares |
0 |
|
|
1 |
|
|
- |
|
|
- |
|
|
0 |
|
|
1 |
|
|
0 |
|
Proceeds from debt |
4,291 |
|
|
1,519 |
|
|
207 |
|
|
32 |
|
|
5,127 |
|
|
1,726 |
|
|
267 |
|
Repayment of debt |
(2,930 |
) |
|
(2,472 |
) |
|
(434 |
) |
|
(67 |
) |
|
(6,953 |
) |
|
(2,906 |
) |
|
(450 |
) |
Dividend paid |
- |
|
|
- |
|
|
- |
|
|
- |
|
|
(677 |
) |
|
- |
|
|
- |
|
Other |
(12 |
) |
|
(48 |
) |
|
42 |
|
|
7 |
|
|
(41 |
) |
|
(6 |
) |
|
(1 |
) |
Net cash provided by (used in) financing activities |
1,349 |
|
|
(1,000 |
) |
|
(185 |
) |
|
(28 |
) |
|
(2,544 |
) |
|
(1,185 |
) |
|
(184 |
) |
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash, cash equivalents and
restricted cash |
12 |
|
|
(44 |
) |
|
(16 |
) |
|
(3 |
) |
|
(38 |
) |
|
(60 |
) |
|
(10 |
) |
Net increase (decrease) in cash, cash equivalents and restricted
cash |
1,592 |
|
|
(1,287 |
) |
|
455 |
|
|
70 |
|
|
(8,932 |
) |
|
(832 |
) |
|
(129 |
) |
Cash, cash equivalents and restricted cash at the beginning of the
period |
3,475 |
|
|
7,090 |
|
|
5,803 |
|
|
899 |
|
|
13,999 |
|
|
7,090 |
|
|
1,098 |
|
Cash, cash equivalents and restricted cash at the end of the
period |
5,067 |
|
|
5,803 |
|
|
6,258 |
|
|
969 |
|
|
5,067 |
|
|
6,258 |
|
|
969 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Huazhu Group Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended June 30, 2021 |
|
GAAP Result |
|
% ofRevenue |
|
Share-based Compensation |
|
% ofRevenue |
|
Non-GAAPResult |
|
% ofRevenue |
|
RMB |
|
RMB |
|
|
RMB |
|
|
(in millions) |
Hotel operating costs |
2,739 |
|
|
76.4 |
% |
|
10 |
|
0.3 |
% |
|
2,729 |
|
|
76.1 |
% |
Other operating costs |
12 |
|
|
0.3 |
% |
|
- |
|
0.0 |
% |
|
12 |
|
|
0.3 |
% |
Selling and marketing expenses |
161 |
|
|
4.5 |
% |
|
1 |
|
0.0 |
% |
|
160 |
|
|
4.5 |
% |
General and administrative expenses |
392 |
|
|
10.9 |
% |
|
17 |
|
0.5 |
% |
|
375 |
|
|
10.4 |
% |
Pre-opening expenses |
16 |
|
|
0.4 |
% |
|
- |
|
0.0 |
% |
|
16 |
|
|
0.4 |
% |
Total operating costs and expenses |
3,320 |
|
|
92.5 |
% |
|
28 |
|
0.8 |
% |
|
3,292 |
|
|
91.7 |
% |
Income (losses) from operations |
629 |
|
|
17.5 |
% |
|
28 |
|
0.8 |
% |
|
657 |
|
|
18.3 |
% |
|
|
|
|
|
|
|
|
|
Quarter Ended June 30, 2021 |
|
GAAP Result |
% ofRevenue |
Share-based Compensation |
|
% ofRevenue |
Non-GAAPResult |
% ofRevenue |
|
US$ |
|
US$ |
|
|
US$ |
|
|
(in millions) |
Hotel operating costs |
424 |
|
|
76.4 |
% |
|
2 |
|
0.3 |
% |
|
422 |
|
|
76.1 |
% |
Other operating costs |
2 |
|
|
0.3 |
% |
|
- |
|
0.0 |
% |
|
2 |
|
|
0.3 |
% |
Selling and marketing expenses |
25 |
|
|
4.5 |
% |
|
0 |
|
0.0 |
% |
|
25 |
|
|
4.5 |
% |
General and administrative expenses |
61 |
|
|
10.9 |
% |
|
2 |
|
0.5 |
% |
|
59 |
|
|
10.4 |
% |
Pre-opening expenses |
3 |
|
|
0.4 |
% |
|
- |
|
0.0 |
% |
|
3 |
|
|
0.4 |
% |
Total operating costs and expenses |
515 |
|
|
92.5 |
% |
|
4 |
|
0.8 |
% |
|
511 |
|
|
91.7 |
% |
Income (losses) from operations |
97 |
|
|
17.5 |
% |
|
4 |
|
0.8 |
% |
|
101 |
|
|
18.3 |
% |
|
|
|
Quarter Ended March 31, 2021 |
|
GAAP Result |
% ofRevenue |
Share-based Compensation |
|
% ofRevenue |
Non-GAAPResult |
% ofRevenue |
|
RMB |
|
RMB |
|
|
RMB |
|
|
(in millions) |
Hotel operating costs |
2,463 |
|
|
105.8 |
% |
|
10 |
|
0.4 |
% |
|
2,453 |
|
|
105.4 |
% |
Other operating costs |
12 |
|
|
0.5 |
% |
|
- |
|
0.0 |
% |
|
12 |
|
|
0.5 |
% |
Selling and marketing expenses |
107 |
|
|
4.6 |
% |
|
1 |
|
0.0 |
% |
|
106 |
|
|
4.6 |
% |
General and administrative expenses |
328 |
|
|
14.1 |
% |
|
24 |
|
1.0 |
% |
|
304 |
|
|
13.1 |
% |
Pre-opening expenses |
21 |
|
|
0.9 |
% |
|
- |
|
0.0 |
% |
|
21 |
|
|
0.9 |
% |
Total operating costs and expenses |
2,931 |
|
|
125.9 |
% |
|
35 |
|
1.4 |
% |
|
2,896 |
|
|
124.5 |
% |
Income (losses) from operations |
(575 |
) |
|
-24.7 |
% |
|
35 |
|
1.4 |
% |
|
(540 |
) |
|
-23.3 |
% |
|
|
|
Quarter Ended June 30, 2020 |
|
GAAP Result |
% ofRevenue |
Share-based Compensation |
|
% ofRevenue |
Non-GAAPResult |
% ofRevenue |
|
RMB |
|
RMB |
|
|
RMB |
|
|
(in millions) |
Hotel operating costs |
2,135 |
|
|
109.3 |
% |
|
11 |
|
0.6 |
% |
|
2,124 |
|
|
108.7 |
% |
Other operating costs |
7 |
|
|
0.4 |
% |
|
- |
|
0.0 |
% |
|
7 |
|
|
0.4 |
% |
Selling and marketing expenses |
107 |
|
|
5.5 |
% |
|
1 |
|
0.1 |
% |
|
106 |
|
|
5.4 |
% |
General and administrative expenses |
263 |
|
|
13.5 |
% |
|
26 |
|
1.3 |
% |
|
237 |
|
|
12.2 |
% |
Pre-opening expenses |
99 |
|
|
5.1 |
% |
|
- |
|
0.0 |
% |
|
99 |
|
|
5.1 |
% |
Total operating costs and expenses |
2,611 |
|
|
133.8 |
% |
|
38 |
|
2.0 |
% |
|
2,573 |
|
|
131.8 |
% |
Income (losses) from operations |
(494 |
) |
|
-25.3 |
% |
|
38 |
|
1.9 |
% |
|
(456 |
) |
|
-23.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
|
GAAP Result |
% ofRevenue |
Share-based Compensation |
% ofRevenue |
Non-GAAPResult |
% ofRevenue |
|
RMB |
|
RMB |
|
RMB |
|
|
(in millions) |
Hotel operating costs |
5,202 |
88.0 |
% |
|
20 |
0.3 |
% |
|
5,182 |
87.7 |
% |
Other operating costs |
24 |
0.4 |
% |
|
- |
0.0 |
% |
|
24 |
0.4 |
% |
Selling and marketing expenses |
268 |
4.5 |
% |
|
2 |
0.0 |
% |
|
266 |
4.5 |
% |
General and administrative expenses |
720 |
12.2 |
% |
|
41 |
0.7 |
% |
|
679 |
11.5 |
% |
Pre-opening expenses |
37 |
0.6 |
% |
|
- |
0.0 |
% |
|
37 |
0.6 |
% |
Total operating costs and expenses |
6,251 |
105.7 |
% |
|
63 |
1.0 |
% |
|
6,188 |
104.7 |
% |
Income (losses) from operations |
54 |
0.9 |
% |
|
63 |
1.1 |
% |
|
117 |
2.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2021 |
|
GAAP Result |
% ofRevenue |
Share-based Compensation |
% ofRevenue |
Non-GAAPResult |
% ofRevenue |
|
US$ |
|
US$ |
|
US$ |
|
|
(in millions) |
Hotel operating costs |
806 |
88.0 |
% |
3 |
0.3 |
% |
803 |
87.7 |
% |
Other operating costs |
4 |
0.4 |
% |
- |
0.0 |
% |
4 |
0.4 |
% |
Selling and marketing expenses |
41 |
4.5 |
% |
0 |
0.0 |
% |
41 |
4.5 |
% |
General and administrative expenses |
112 |
12.2 |
% |
7 |
0.7 |
% |
105 |
11.5 |
% |
Pre-opening expenses |
6 |
0.6 |
% |
- |
0.0 |
% |
6 |
0.6 |
% |
Total operating costs and expenses |
969 |
105.7 |
% |
10 |
1.0 |
% |
959 |
104.7 |
% |
Income (losses) from operations |
8 |
0.9 |
% |
10 |
1.1 |
% |
18 |
2.0 |
% |
|
Six Months Ended June 30, 2020 |
|
GAAP Result |
% ofRevenue |
Share-based Compensation |
% ofRevenue |
Non-GAAPResult |
% ofRevenue |
|
RMB |
|
RMB |
|
RMB |
|
|
(in millions) |
Hotel operating costs |
4,512 |
|
113.8 |
% |
21 |
0.5 |
% |
4,491 |
|
113.3 |
% |
Other operating costs |
15 |
|
0.4 |
% |
- |
0.0 |
% |
15 |
|
0.4 |
% |
Selling and marketing expenses |
253 |
|
6.4 |
% |
2 |
0.1 |
% |
251 |
|
6.3 |
% |
General and administrative expenses |
579 |
|
14.6 |
% |
44 |
1.1 |
% |
535 |
|
13.5 |
% |
Pre-opening expenses |
210 |
|
5.3 |
% |
- |
0.0 |
% |
210 |
|
5.3 |
% |
Total operating costs and expenses |
5,569 |
|
140.5 |
% |
67 |
1.7 |
% |
5,502 |
|
138.8 |
% |
Income (losses) from operations |
(1,351 |
) |
-34.1 |
% |
67 |
1.7 |
% |
(1,284 |
) |
-32.4 |
% |
Huazhu Group Limited |
Unaudited Reconciliation of GAAP and Non-GAAP
Results |
|
Quarter Ended |
|
Six Months Ended |
|
June 30, 2020 |
|
March 31, 2021 |
|
June 30, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|
(in millions, except shares, per share and per ADS
data) |
Net income (loss) attributable to Huazhu Group Limited (GAAP) |
(548 |
) |
|
(248 |
) |
|
378 |
|
|
59 |
|
|
(2,683 |
) |
|
130 |
|
|
21 |
|
Share-based compensation expenses |
38 |
|
|
35 |
|
|
28 |
|
|
4 |
|
|
67 |
|
|
63 |
|
|
10 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
34 |
|
|
(238 |
) |
|
58 |
|
|
9 |
|
|
1,037 |
|
|
(180 |
) |
|
(28 |
) |
Adjusted net income (loss) attributable to Huazhu Group Limited
(non-GAAP) |
(476 |
) |
|
(451 |
) |
|
464 |
|
|
72 |
|
|
(1,579 |
) |
|
13 |
|
|
3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted earnings (losses) per share (non-GAAP)(2) |
|
|
|
|
|
Basic |
(0.17 |
) |
|
(0.14 |
) |
|
0.15 |
|
|
0.02 |
|
|
(0.55 |
) |
|
0.00 |
|
|
0.00 |
|
Diluted |
(0.17 |
) |
|
(0.14 |
) |
|
0.14 |
|
|
0.02 |
|
|
(0.55 |
) |
|
0.00 |
|
|
0.00 |
|
|
|
|
|
|
|
|
|
Adjusted earnings (losses) per ADS (non-GAAP) |
Basic |
(1.66 |
) |
|
(1.45 |
) |
|
1.49 |
|
|
0.23 |
|
|
(5.51 |
) |
|
0.05 |
|
|
0.01 |
|
Diluted |
(1.66 |
) |
|
(1.45 |
) |
|
1.43 |
|
|
0.22 |
|
|
(5.51 |
) |
|
0.04 |
|
|
0.01 |
|
|
|
|
|
|
|
|
|
Weighted average number of shares used in computation |
|
|
|
|
|
Basic |
2,864,733,442 |
|
|
3,109,432,473 |
|
|
3,114,135,304 |
|
|
3,114,135,304 |
|
|
2,862,435,229 |
|
|
3,111,794,826 |
|
|
3,111,794,826 |
|
Diluted |
2,864,733,442 |
|
|
3,109,432,473 |
|
|
3,273,978,191 |
|
|
3,273,978,191 |
|
|
2,862,435,229 |
|
|
3,166,582,955 |
|
|
3,166,582,955 |
|
(2) Due to the
sub-division of our shares in Q2, the Company revised prior
comparative periods to conform to the current period
presentation. |
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Six Months Ended |
|
June 30, 2020 |
|
March 31, 2021 |
|
June 30, 2021 |
|
June 30, 2020 |
|
June 30, 2021 |
|
RMB |
RMB |
RMB |
US$ |
RMB |
RMB |
US$ |
|
(in millions, except per share and per ADS
data) |
Net income (loss) attributable to Huazhu Group Limited
(GAAP) |
(548 |
) |
|
(248 |
) |
|
378 |
|
|
59 |
|
|
(2,683 |
) |
|
130 |
|
|
21 |
|
Interest income |
(26 |
) |
|
(22 |
) |
|
(17 |
) |
|
(3 |
) |
|
(55 |
) |
|
(39 |
) |
|
(6 |
) |
Interest expense |
142 |
|
|
110 |
|
|
102 |
|
|
16 |
|
|
279 |
|
|
212 |
|
|
33 |
|
Income tax expense |
(68 |
) |
|
(122 |
) |
|
132 |
|
|
20 |
|
|
(98 |
) |
|
10 |
|
|
1 |
|
Depreciation and amortization |
331 |
|
|
352 |
|
|
362 |
|
|
56 |
|
|
652 |
|
|
714 |
|
|
111 |
|
EBITDA (non-GAAP) |
(169 |
) |
|
70 |
|
|
957 |
|
|
148 |
|
|
(1,905 |
) |
|
1,027 |
|
|
160 |
|
Share-based compensation |
38 |
|
|
35 |
|
|
28 |
|
|
4 |
|
|
67 |
|
|
63 |
|
|
10 |
|
Unrealized (gains) losses from fair value changes of equity
securities |
34 |
|
|
(238 |
) |
|
58 |
|
|
9 |
|
|
1,037 |
|
|
(180 |
) |
|
(28 |
) |
Adjusted EBITDA (non-GAAP) |
(97 |
) |
|
(133 |
) |
|
1,043 |
|
|
161 |
|
|
(801 |
) |
|
910 |
|
|
142 |
|
Operating Results:
Legacy-Huazhu(1)
|
Number of hotels |
|
Number of rooms |
|
Opened in Q2 2021 |
Closed (2)in Q2
2021 |
Net added in Q2 2021 |
As of June 30, 2021
(3) |
|
As of June 30, 2021 |
|
|
Leased and owned hotels |
18 |
(7 |
) |
11 |
675 |
|
91,892 |
Manachised and franchised hotels |
381 |
(149 |
) |
232 |
6,329 |
|
575,778 |
Total |
399 |
(156 |
) |
243 |
7,004 |
|
667,670 |
(1) Legacy-Huazhu refers to Huazhu and its
subsidiaries, excluding DH.(2) The reasons for
hotel closures mainly include non-compliance with our brand
standards, operating losses, and property-related issues. In Q2
2021, we temporarily closed 8 hotels for brand upgrade and business
model change purposes.(3) As of June 30, 2021, 32
hotels were requisitioned by governmental authorities. |
|
As of June 30, 2021 |
|
Number of hotels |
Unopened hotels in pipeline |
Economy hotels |
4,451 |
1,295 |
Leased and owned hotels |
417 |
3 |
Manachised and franchised hotels |
4,034 |
1,292 |
Midscale and upscale hotels |
2,553 |
1,401 |
Leased and owned hotels |
258 |
13 |
Manachised and franchised hotels |
2,295 |
1,388 |
Total |
7,004 |
2,696 |
|
|
|
Operational hotels excluding hotels under
requisition |
|
For the quarter ended |
|
|
June 30, |
March 31, |
June 30, |
yoy |
|
2020 |
2021 |
2021 |
change |
Average daily room rate (in RMB) |
|
|
|
Leased and owned hotels |
205 |
|
243 |
|
311 |
|
51.8 |
% |
Manachised and franchised hotels |
181 |
|
203 |
|
246 |
|
36.2 |
% |
Blended |
185 |
|
209 |
|
255 |
|
38.3 |
% |
Occupancy rate (as a percentage) |
|
|
|
Leased and owned hotels |
67.4% |
|
64.0% |
|
81.1% |
|
13.7 p.p. |
Manachised and franchised hotels |
69.1% |
|
66.6% |
|
82.5% |
|
13.4 p.p. |
Blended |
68.8% |
|
66.2% |
|
82.3% |
|
13.5 p.p. |
RevPAR (in RMB) |
|
|
|
|
Leased and owned hotels |
138 |
|
156 |
|
252 |
|
82.7 |
% |
Manachised and franchised hotels |
125 |
|
135 |
|
203 |
|
62.7 |
% |
Blended |
127 |
|
138 |
|
210 |
|
65.5 |
% |
|
For the quarter ended |
|
June 30, |
June 30, |
yoy |
|
2019 |
2021 |
change |
Average daily room rate (in RMB) |
|
|
Leased and owned hotels |
281 |
|
311 |
|
10.4 |
% |
Manachised and franchised hotels |
225 |
|
246 |
|
9.2 |
% |
Blended |
236 |
|
255 |
|
7.9 |
% |
Occupancy rate (as a percentage) |
|
|
Leased and owned hotels |
89.4% |
|
81.1% |
|
-8.4p.p. |
Manachised and franchised hotels |
86.3% |
|
82.5% |
|
-3.8p.p. |
Blended |
86.9% |
|
82.3% |
|
-4.6p.p. |
RevPAR (in RMB) |
|
|
|
Leased and owned hotels |
252 |
|
252 |
|
0.1 |
% |
Manachised and franchised hotels |
194 |
|
203 |
|
4.4 |
% |
Blended |
206 |
|
210 |
|
2.2 |
% |
|
|
|
|
|
|
|
|
|
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 ofJune 30, |
For the quarter |
yoy |
For the quarter |
yoy |
For the quarter |
yoy |
|
ended June 30, |
change |
ended June 30, |
change |
ended June 30, |
change |
|
2020 |
2021 |
2020 |
2021 |
|
2020 |
2021 |
|
2020 |
|
2021 |
|
(p.p.) |
Economy hotels |
3,017 |
3,017 |
107 |
168 |
57.7% |
|
146 |
196 |
34.4% |
|
73.1% |
|
85.8% |
|
12.7 |
Leased and owned hotels |
408 |
408 |
109 |
191 |
75.7% |
|
154 |
227 |
47.6% |
|
70.8% |
|
84.2% |
|
13.5 |
Manachised and franchised hotels |
2,609 |
2,609 |
106 |
163 |
53.6% |
|
144 |
189 |
31.3% |
|
73.7% |
|
86.2% |
|
12.5 |
Midscale and upscale hotels |
1,520 |
1,520 |
172 |
272 |
57.8% |
|
254 |
336 |
32.3% |
|
68.0% |
|
81.0% |
|
13.1 |
Leased and owned hotels |
213 |
213 |
182 |
316 |
73.3% |
|
285 |
405 |
42.3% |
|
64.0% |
|
77.9% |
|
13.9 |
Manachised and franchised hotels |
1,307 |
1,307 |
170 |
262 |
54.1% |
|
247 |
321 |
29.9% |
|
68.9% |
|
81.7% |
|
12.8 |
Total |
4,537 |
4,537 |
133 |
210 |
58.1% |
|
187 |
250 |
33.9% |
|
71.1% |
|
83.9% |
|
12.8 |
|
|
Number of hotels |
Same-hotel RevPAR |
Same-hotel ADR |
Same-hotel Occupancy |
|
As ofJune 30, |
For the quarter |
yoy |
For the quarter |
yoy |
For the quarter |
yoy |
|
ended June 30, |
change |
ended June 30, |
change |
ended June 30, |
change |
|
2019 |
2021 |
2019 |
2021 |
|
2019 |
2021 |
|
2019 |
|
2021 |
|
(p.p.) |
Economy hotels |
2,308 |
2,308 |
179 |
168 |
-5.9% |
|
193 |
195 |
1.2% |
|
92.5% |
|
86.0% |
|
-6.5 |
Leased and owned hotels |
392 |
392 |
202 |
187 |
-7.2% |
|
217 |
223 |
2.9% |
|
93.3% |
|
84.1% |
|
-9.2 |
Manachised and franchised hotels |
1,916 |
1,916 |
172 |
163 |
-5.6% |
|
187 |
188 |
0.8% |
|
92.3% |
|
86.5% |
|
-5.8 |
Midscale and upscale hotels |
931 |
931 |
285 |
269 |
-5.7% |
|
337 |
338 |
0.1% |
|
84.6% |
|
79.7% |
|
-4.9 |
Leased and owned hotels |
184 |
184 |
350 |
311 |
-11.1% |
|
406 |
401 |
-1.4% |
|
86.1% |
|
77.7% |
|
-8.5 |
Manachised and franchised hotels |
747 |
747 |
264 |
255 |
-3.3% |
|
314 |
317 |
1.1% |
|
84.1% |
|
80.4% |
|
-3.7 |
Total |
3,239 |
3,239 |
216 |
203 |
-5.7% |
|
240 |
243 |
1.0% |
|
89.7% |
|
83.8% |
|
-6.0 |
Operating Results:
Legacy-DH(4)
|
Number of hotels |
|
Number ofrooms |
|
Unopened hotelsin pipeline |
|
Opened in Q2 2021 |
Closedin Q2 2021 |
Net added in Q2 2021 |
As of June 30,
2021(5) |
|
As of June 30, 2021 |
|
As ofJune 30, 2021 |
|
Leased hotels |
1 |
- |
1 |
74 |
|
13,839 |
|
27 |
Manachised and franchised hotels |
1 |
- |
1 |
48 |
|
10,775 |
|
11 |
Total |
2 |
- |
2 |
122 |
|
24,614 |
|
38 |
(4)
Legacy-DH refers to DH. (5) As of June 30,
2021, a total of 5 DH brand hotels were temporarily closed due to
COVID-19, and 1 hotel was closed for renovation. |
|
For the quarter ended |
|
|
June 30, |
March 31, |
June 30, |
yoy |
|
2020 |
2021 |
2021 |
change |
Average daily room rate (in EUR) |
|
|
|
|
Leased hotels |
82.4 |
|
77.9 |
|
85.2 |
|
3.4 |
% |
Manachised and franchised hotels |
96.5 |
|
59.0 |
|
77.9 |
|
-19.3 |
% |
Blended |
86.5 |
|
68.5 |
|
81.5 |
|
-5.8 |
% |
Occupancy rate (as a percentage) |
|
|
|
|
Leased hotels |
18.7% |
|
14.6% |
|
20.0% |
|
1.3p.p. |
Managed and franchised hotels |
17.3% |
|
26.5% |
|
30.8% |
|
13.5p.p. |
Blended |
18.3% |
|
18.8% |
|
24.4% |
|
6.1p.p. |
RevPAR (in EUR) |
|
|
|
|
Leased hotels |
15.4 |
|
11.4 |
|
17.0 |
|
10.7 |
% |
Managed and franchised hotels |
16.7 |
|
15.6 |
|
24.0 |
|
43.5 |
% |
Blended |
15.8 |
|
12.9 |
|
19.8 |
|
25.6 |
% |
Hotel Portfolio by Brand
|
Total |
|
Hotels |
Rooms |
Unopened hotels |
|
in operation |
in pipeline |
Economy hotels |
4,465 |
370,297 |
1,307 |
HanTing Hotel |
2,834 |
260,252 |
740 |
Hi Inn |
430 |
25,419 |
83 |
Elan Hotel(6) |
976 |
60,645 |
431 |
Ibis Hotel |
211 |
22,320 |
41 |
Zleep Hotels |
14 |
1,661 |
12 |
Midscale hotels |
2,146 |
241,370 |
1,121 |
Ibis Styles Hotel |
78 |
9,046 |
19 |
Starway Hotel |
477 |
39,524 |
279 |
JI Hotel |
1,203 |
148,008 |
616 |
Orange Hotel |
360 |
40,285 |
202 |
CitiGO Hotel(7) |
28 |
4,507 |
5 |
Upper midscale hotels |
406 |
60,926 |
248 |
Crystal Orange Hotel |
129 |
17,517 |
60 |
Manxin Hotel |
68 |
6,764 |
54 |
Madison Hotel |
31 |
4,745 |
40 |
Mercure Hotel |
117 |
19,786 |
57 |
Novotel Hotel |
13 |
3,579 |
17 |
IntercityHotel(8) |
48 |
8,535 |
20 |
Upscale hotels |
103 |
18,105 |
56 |
Joya Hotel |
9 |
1,760 |
0 |
Blossom House |
29 |
1,420 |
30 |
Grand Mercure Hotel |
7 |
1,485 |
6 |
Steigenberger Hotels & Resorts(9) |
51 |
12,239 |
12 |
MAXX (10) |
5 |
777 |
6 |
Jaz in the City |
2 |
424 |
2 |
Others |
6 |
1,586 |
2 |
Other hotels(11) |
6 |
1,586 |
2 |
Total |
7,126 |
692,284 |
2,734 |
(6) As of June 30, 2021, 17 Ni Hao
Hotels were included in the operational hotel for Elan Hotels and
111 Ni Hao hotels were included in the pipeline for Elan
Hotels.(7) We completed CitiGO acquisition in May
2021.(8) As of June 30, 2021, 2 operational hotels and
4 pipeline hotels of IntercityHotel were in China.(9)
As of June 30, 2021, 1 operational hotel and 5 pipeline
hotels of Steigenberger Hotels & Resorts were in
China.(10) As of June 30, 2021, 5 pipeline hotels of
MAXX 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).
_____________________________1 Hotel turnover
refers to total transaction value of room and non-room revenue from
Huazhu hotels (i.e., leased and operated, manachised and franchised
hotels).2 The conversion of Renminbi (“RMB”) into United States
dollars (“US$”) is based on the exchange rate of US$1.00=RMB6.4566
on June 30, 2021 as set forth in H.10 statistical release of the
U.S. Federal Reserve Board and available at
http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.3
Legacy-Huazhu refers to Huazhu and its subsidiaries, excluding DH.4
As of June 30, 2021, the Company is still process the evaluating
the purchase price allocation of CitiGO. Hence, the financial
results for the second quarter of 2021 are based on the preliminary
numbers and are subject to change upon finalization.
Contact InformationInvestor RelationsTel: +86
(21) 6195 9561Email: ir@huazhu.comhttp://ir.huazhu.com
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