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Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the First Quarter of 2021

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Huazhu Group Limited
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SHANGHAI, China, April 22, 2021 (GLOBE NEWSWIRE) -- Huazhu Group Limited (NASDAQ: HTHT and HKEX: 1179) (“Huazhu”, “we” or “our”), a world-leading hotel group, today announced preliminary results for hotel operations in the first quarter (“Q1 2021”) ended March 31, 2021.

COVID-19 update
Due to COVID-19 resurgence in Shanghai, Beijing and Hebei Province and the “stay local” guidance prior to the Chinese New Year holiday (CNY), RevPAR in January and February 2021 recovered to 74% and 56% of 2019 respectively. Our hotel openings were also negatively impacted by the resurgence of COVID-19 during the first quarter. However, our performance started to recover steadily again post the CNY holiday. Particularly, after the National People’s Congress and the Chinese People’s Political Consultative Conference during the first week of March, the Chinese government further eased travel restrictions which were in effect from March 16, 2021. After that, we saw strong recovery in hotel demand in the Beijing area, followed by other major tier 1 cities. Our RevPAR in March 2021 recovered to 95% of 2019, mainly driven by the strong recovery of business demand. Heading into April, the recovery trend continued. Our RevPAR during the Tomb Sweeping holiday recovered to 96% of same period of 2019, which demonstrated the strong recovery of leisure demand.

Steigenberger Hotels AG and its subsidiaries (“DH”) suffered from the several resurgences of COVID-19 pandemic in European countries. The lock down period there has been extended several times, and most likely to further extend to the end of May, 2021. European countries began their vaccination process in December 2020. However, due to the uncertainty of the completion of the vaccination process, and consequently the timing of business recovery, we are taking further cost reduction and cash flow measures, such as negotiating with landlords to reduce our rental costs, reducing or eliminating discretionary corporate spending and capital expenditures, etc. However, the extension of lockdown impacts should be partially offset by extension of the scope and duration of European government subsidy programs.

Operating Results: Legacy-Huazhu(1)

Number of hotels

Number of rooms

Opened
in Q1 2021

Closed (2)
in Q1 2021

Net added
in Q1 2021

As of
March 31, 2021 (3)

As of
March 31, 2021

Leased and owned hotels

2

(19

)

(17

)

664

89,901

Manachised and franchised hotels

207

(98

)

109

6,097

548,718

Total

209

(117

)

92

6,761

638,619

(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 Q1 2021, we temporarily closed 16 hotels for brand upgrade and business model change purposes.
(3) As of March 31, 2021, 43 hotels were requisitioned by governmental authorities.


As of March 31, 2021

Number of hotels

Unopened hotels in pipeline

Economy hotels

4,383

1,269

Leased and owned hotels

422

5

Manachised and franchised hotels

3,961

1,264

Midscale and upscale hotels

2,378

1,339

Leased and owned hotels

242

14

Manachised and franchised hotels

2,136

1,325

Total

6,761

2,608


Operational hotels excluding hotels under requisition

For the quarter ended

March 31,

December 31,

March 31,

yoy

2020

2020

2021

change

Average daily room rate (in RMB)

Leased and owned hotels

211

272

243

15.6%

Manachised and franchised hotels

184

224

203

10.2%

Blended

189

231

209

10.6%

Occupancy rate (as a percentage)

Leased and owned hotels

43.8%

79.6%

64.0%

20.2 p.p.

Manachised and franchised hotels

47.4%

80.8%

66.6%

19.2 p.p.

Blended

46.7%

80.6%

66.2%

19.5 p.p.

RevPAR (in RMB)

Leased and owned hotels

92

217

156

68.9%

Manachised and franchised hotels

87

181

135

54.9%

Blended

88

186

138

56.7%


For the quarter ended

March 31,

March 31,

yoy

2019

2021

change

Average daily room rate (in RMB)

Leased and owned hotels

258

243

-5.6%

Manachised and franchised hotels

211

203

-3.9%

Blended

221

209

-5.6%

Occupancy rate (as a percentage)

Leased and owned hotels

83.6%

64.0%

-19.6p.p.

Manachised and franchised hotels

79.8%

66.6%

-13.3p.p.

Blended

80.6%

66.2%

-14.4p.p.

RevPAR (in RMB)

Leased and owned hotels

216

156

-27.8%

Manachised and franchised hotels

169

135

-19.9%

Blended

178

138

-22.5%


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
March 31,

For the quarter

yoy

For the quarter

yoy

For the quarter

yoy

ended
March 31,

change

ended
March 31,

change

ended
March 31,

change

2020

2021

2020

2021

2020

2021

2020

2021

(p.p.)

Economy hotels

2,832

2,832

80

113

42.1

%

153

160

4.9

%

52.0

%

70.5

%

18.4

Leased and owned hotels

417

417

79

120

50.8

%

164

175

7.3

%

48.5

%

68.2

%

19.7

Manachised and franchised hotels

2,415

2,415

80

111

40.0

%

150

157

4.4

%

53.0

%

71.0

%

18.1

Midscale and upscale hotels

1,377

1,377

111

176

58.2

%

260

278

7.0

%

42.7

%

63.1

%

20.4

Leased and owned hotels

198

198

113

191

68.6

%

297

326

9.5

%

38.1

%

58.7

%

20.6

Manachised and franchised hotels

1,179

1,179

110

172

55.6

%

251

268

6.6

%

44.0

%

64.2

%

20.2

Total

4,209

4,209

92

138

50.2

%

190

204

7.6

%

48.4

%

67.5

%

19.2


Number of hotels

Same-hotel RevPAR

Same-hotel ADR

Same-hotel Occupancy

As of
March 31,

For the quarter

yoy

For the quarter

yoy

For the quarter

yoy

ended
March 31,

change

ended
March 31,

change

ended
March 31,

change

2019

2021

2019

2021

2019

2021

2019

2021

(p.p.)

Economy hotels

2,290

2,290

158

110

-30.0

%

181

158

-12.7

%

87.1

%

69.8

%

-17.3

Leased and owned hotels

396

396

175

117

-33.1

%

199

173

-13.1

%

88.1

%

67.9

%

-20.2

Manachised and franchised hotels

1,894

1,894

153

109

-29.1

%

176

154

-12.4

%

86.9

%

70.4

%

-16.5

Midscale and upscale hotels

842

842

248

174

-30.0

%

321

279

-13.0

%

77.2

%

62.2

%

-15.0

Leased and owned hotels

173

173

302

189

-37.4

%

381

319

-16.4

%

79.1

%

59.2

%

-19.9

Manachised and franchised hotels

669

669

229

168

-26.5

%

299

266

-11.0

%

76.5

%

63.2

%

-13.3

Total

3,132

3,132

187

131

-29.9

%

224

195

-12.6

%

83.9

%

67.3

%

-16.6

Operating Results: Legacy-DH(4)

Number of hotels

Number of rooms

Unopened hotels in pipeline

Opened
in Q1 2021

Closed
in Q1 2021

Net added
in Q1 2021

As of
March 31, 2021(5)





As of
March 31,
2021






As of
March 31,
2021


Leased hotels

1

-

1

73

13,527

27

Manachised and franchised hotels

-

(1

)

(1

)

47

10,366

14

Total

1

(1

)

-

120

23,893

41

(4) Legacy-DH refers to DH.
(5) As of March 31, 2021, a total of 20 DH brand hotels were temporarily closed due to COVID-19.


For the quarter ended

March 31,

December 31,

March 31,

yoy

2020

2020

2021

change

Average daily room rate (in EUR)

Leased hotels

96.8

78.4

77.9

-19.6%

Manachised and franchised hotels

79.5

73.3

59.0

-25.8%

Blended

89.3

76.3

68.5

-23.3%

Occupancy rate (as a percentage)

Leased hotels

52.6%

20.9%

14.6%

-38.0p.p.

Managed and franchised hotels

50.4%

25.4%

26.5%

-24.0p.p.

Blended

51.7%

22.5%

18.8%

-32.8p.p.

RevPAR (in EUR)

Leased hotels

51.0

16.4

11.4

-77.7%

Managed and franchised hotels

40.1

18.6

15.6

-61.0%

Blended

46.1

17.2

12.9

-72.1%

Hotel Portfolio by Brand

As of March 31, 2021

Hotels

Rooms

Unopened hotels

in operation

in pipeline

Economy hotels

4,397

363,494

1,280

HanTing Hotel

2,767

255,385

659

Hi Inn

436

25,228

99

Elan Hotel(6)

972

59,319

468

Ibis Hotel

208

21,901

43

Zleep Hotels

14

1,661

11

Midscale and upscale hotels

2,484

299,018

1,369

Ibis Styles Hotel

70

8,119

26

Starway Hotel

453

38,110

272

JI Hotel

1,137

139,943

577

Orange Hotel

345

38,537

181

Crystal Orange Hotel

121

16,240

69

Manxin Hotel

63

6,155

54

Madison Hotel

25

3,850

43

Mercure Hotel

108

17,846

64

Novotel Hotel

12

3,387

14

Joya Hotel

10

1,842

0

Blossom House

27

1,272

26

Grand Mercure Hotel

7

1,485

6

Steigenberger Hotels & Resorts

49

11,574

9

IntercityHotel(7)

45

7,931

21

MAXX by Steigenberger(8)

5

777

4

Jaz in the City

2

424

2

Other partner hotels

5

1,526

1

Total

6,881

662,512

2,649

(6) As of March 31, 2021, 9 Ni Hao Hotels were included in the operational hotel total for Elan Hotels and 96 Ni Hao hotels were included in the pipeline total for Elan Hotels.
(7) As of March 31, 2021, 4 pipeline hotels of IntercityHotel were in China.
(8) As of March 31, 2021, 3 pipeline hotels of MAXX by Steigenberger were in China.

About Huazhu Group Limited
Originated in China, Huazhu Group Limited is a world-leading hotel group. As of March 31, 2021, Huazhu operated 6,881 hotels with 662,512 rooms in operation in 16 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, and Ni Hao 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 by Steigenberger, 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 March 31, 2021, Huazhu operates 16 percent of its hotel rooms under lease and ownership model, and 84 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.

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