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H World Group Limited Announces Preliminary Results for Hotel Operations in the Fourth Quarter and the Full Year of 2022

SHANGHAI, China, Jan. 31, 2023 (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 fourth quarter (“Q4 2022”) and the full year ended December 31, 2022.

COVID-19 update
For our Legacy-Huazhu business, our RevPAR in Q4 2022 recovered to 83% of the 2019 level. The recovery was accelerated after Chinese Government announced the reopening policy in mid-November. Breaking down into each month, our RevPAR in October, November and December 2022 recovered to 74%, 87% and 91% of the 2019 levels, respectively. The trend continued during the Spring Festival holiday with RevPAR recovered to roughly 95% of 2019 seven days’ holiday period.

Steigenberger Hotels GmbH and its subsidiaries (“DH”, or “Legacy-DH”) have experienced a seasonal slowdown of RevPAR recovery in Q4 2022. Blended RevPAR recovered to 110% of 2019 levels in Q4, driven by the Steigenberger hotels in Qatar and Egypt. Excluding the effects of the FIFA World Cup and the COP27 UN Climate Conference, the RevPAR recovered to 100% of 2019 levels. RevPAR recovery continues to be driven by ADR increases while occupancy levels still remain behind the levels achieved in 2019. The ongoing reduction of energy-related risks eases energy prices in Europe. However, inflation is continuing to impact operating costs. We will bridge the rising cost through further rate increases as well as an ongoing focus on cost reduction, process optimization and stringent cash management.

Operating Results: Legacy-Huazhu(1)

 Number of hotels  Number of rooms
 Opened
in Q4 2022
 Closed (2)
in Q4 2022
Net added
in Q4 2022
As of
December 31, 2022 (3)
 As of
December 31, 2022
   
Leased and owned hotels5 (13)(8)623 89,638
Manachised and franchised hotels239 (96)143 7,788 693,536
Total244 (109)135 8,411 783,174
(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 Q4 2022, we temporarily closed 10 hotels for brand upgrade and business model change purposes.
(3)   As of December 31, 2022, 572 hotels were requisitioned by governmental authorities.

 

 As of December 31, 2022
 Number of hotels  Unopened hotels in pipeline
Economy hotels4930 1053
Leased and owned hotels353 1
Manachised and franchised hotels4577 1052
Midscale and upscale hotels3481 1491
Leased and owned hotels270 13
Manachised and franchised hotels3211 1478
Total8411 2544

 

Operational hotels excluding hotels under requisition(4)
 For the quarter ended 
 December 31,September 30,December 31,yoy
 2021 2022 2022 change
Average daily room rate (in RMB)   
Leased and owned hotels286 294 279 -2.6%
Manachised and franchised hotels232 248 236 1.4%
Blended239 254 240 0.4%
Occupancy Rate (as a percentage)   
Leased and owned hotels67.4%73.1%63.1%-4.3p.p.
Manachised and franchised hotels68.4%76.4%66.6%-1.8p.p.
Blended68.2%76.0%66.2%-2.0p.p.
RevPAR (in RMB)    
Leased and owned hotels193 215 176 -8.8%
Manachised and franchised hotels159 190 157 -1.2%
Blended163 193 159 -2.6%

 

 For the quarter ended
 December 31,December 31,yoy
 2019 2022 change
Average daily room rate (in RMB)  
Leased and owned hotels277 279 0.5%
Manachised and franchised hotels223 236 5.9%
Blended232 240 3.6%
Occupancy Rate (as a percentage)  
Leased and owned hotels84.7%63.1%-21.6p.p.
Manachised and franchised hotels81.6%66.6%-15.0p.p.
Blended82.2%66.2%-16.0p.p.
RevPAR (in RMB)   
Leased and owned hotels235 176 -25.2%
Manachised and franchised hotels182 157 -13.6%
Blended191 159 -16.6%

(4)   If including hotels under requisition, RevPAR in Q4 2022 would have been 85% of the 2019 level.

Operational hotels excluding hotels under requisition(5)
 For full year ended 
 December 31,December 31,yoy 
 2021 2022 change 
Average daily room rate (in RMB)   
Leased and owned hotels286 272 -5.1% 
Manachised and franchised hotels232 231 -0.2% 
Blended239 236 -1.3% 
Occupancy Rate (as a percentage)   
Leased and owned hotels70.6%63.9%-6.7p.p. 
Manachised and franchised hotels72.4%67.1%-5.4p.p. 
Blended72.2%66.7%-5.5p.p. 
RevPAR (in RMB)    
Leased and owned hotels202 174 -14.1% 
Manachised and franchised hotels168 155 -7.6% 
Blended172 157 -8.8% 

 

 For full year ended
 December 31,December 31,yoy
 2019 2022 change
Average daily room rate (in RMB)  
Leased and owned hotels276 272 -1.8%
Manachised and franchised hotels224 231 3.0%
Blended234 236 0.6%
Occupancy Rate (as a percentage)  
Leased and owned hotels87.0%63.9%-23.0p.p.
Manachised and franchised hotels83.8%67.1%-16.7p.p.
Blended84.4%66.7%-17.7p.p.
RevPAR (in RMB)   
Leased and owned hotels240 174 -27.8%
Manachised and franchised hotels188 155 -17.5%
Blended198 157 -20.5%

(5)   If including hotels under requisition, RevPAR in 2022 would have been 82% 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 hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,

For the quarter yoyFor the quarter yoyFor the quarter yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2021202220212022 20212022 2021 2022 (p.p.)
Economy hotels3,1993,199137123-10.1%183181-1.0%75.0%68.1%-6.9
Leased and owned hotels335335148132-11.1%204199-2.6%72.5%66.2%-6.4
Manachised and franchised hotels2,8642,864135122-9.9%179178-0.7%75.5%68.5%-7.0
Midscale and upscale hotels2,0972,097215196-8.6%313301-3.8%68.6%65.1%-3.4
Leased and owned hotels227227245222-9.5%387361-6.8%63.4%61.5%-1.9
Manachised and franchised hotels1,8701,870209192-8.4%301292-3.2%69.5%65.7%-3.7
Total5,2965,296174158-9.2%241236-2.0%72.0%66.7%-5.3

 

 
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,

For the quarter yoyFor the quarter yoyFor the quarter yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2019202220192022 20192022 2019 2022 (p.p.)
Economy hotels1,9691,969167122-26.8%188180-4.1%88.6%67.6%-21.0
Leased and owned hotels324324189130-31.5%215197-8.3%88.0%65.8%-22.2
Manachised and franchised hotels1,6451,645161120-25.4%181176-2.8%88.8%68.1%-20.7
Midscale and upscale hotels1,0091,009272192-29.4%325300-7.9%83.5%64.0%-19.5
Leased and owned hotels166166329202-38.7%395335-15.3%83.3%60.3%-23.0
Manachised and franchised hotels843843256189-26.1%307291-5.1%83.5%65.0%-18.5
Total2,9782,978209150-28.0%241227-5.8%86.6%66.2%-20.4

 

Same-hotel operational data by class        
Mature hotels in operation for more than 18 months (excluding hotels under requisition)
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,

For the year  yoyFor the year  yoyFor the year  yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2021202220212022 20212022 2021 2022 (p.p.)
Economy hotels3,1993,199142123-13.6%183176-3.6%77.5%69.5%-8.0
Leased and owned hotels335335155133-14.1%207194-6.3%74.5%68.3%-6.2
Manachised and franchised hotels2,8642,864139121-13.5%179173-3.1%78.0%69.7%-8.3
Midscale and upscale hotels2,0972,097224196-12.4%315301-4.4%71.0%65.0%-6.0
Leased and owned hotels227227255219-14.1%386362-6.3%66.1%60.6%-5.5
Manachised and franchised hotels1,8701,870218191-12.0%303291-3.9%71.9%65.8%-6.1
Total5,2965,296179156-13.0%240231-3.8%74.6%67.5%-7.1

 

 
 Number of hotelsSame-hotel RevPARSame-hotel ADRSame-hotel Occupancy
 As of
December 31,

For the year  yoyFor the year yoyFor the year yoy
 ended
December 31,
changeended
December 31,
changeended
December 31,
change
 2019202220192022 20192022 2019 2022 (p.p.)
Economy hotels1,9691,969174121-30.5%192176-8.7%90.7%69.0%-21.7
Leased and owned hotels324324195130-33.3%215191-10.9%90.8%68.0%-22.8
Manachised and franchised hotels1,6451,645169119-29.6%186171-7.9%90.6%69.3%-21.4
Midscale and upscale hotels1,0091,009276190-31.2%331300-9.5%83.2%63.3%-19.9
Leased and owned hotels166166334200-40.0%396338-14.6%84.2%59.1%-25.1
Manachised and franchised hotels843843258187-27.6%311289-7.1%82.9%64.6%-18.3
Total2,9782,978212147-30.8%241219-9.0%87.9%66.9%-21.0


Operating Results: Legacy-DH(6)

 Number of hotels Number of rooms Unopened hotels in pipeline
 Opened
in Q4 2022

 Closed
in Q4 2022

Net added
in Q4 2022

 As of
December 31, 2022(7)

 

 

As of
December 31,2022

 

 

As of
December 31,2022

   
Leased hotels2 - 2 81 15,328 26
Manachised and franchised hotels4 - 4 51 10,976 10
           
Total6 - 6 132 26,304 36
(6)   Legacy-DH refers to DH.
(7)   As of December 31, 2022, a total of 3 hotels were temporarily closed. 1 hotel was closed due to flood damage, 1 hotel was closed due to extensive hotel refurbishment, and 1 hotel was closed due to repairment.

 

 For the quarter ended 
 December 31,September 30,December 31,yoy
 2021 2022 2022 change
Average daily room rate (in EUR)    
Leased hotels95 113 114 19.5%
Manachised and franchised hotels93 116 134 44.6%
Blended94 114 122 29.7%
Occupancy rate (as a percentage)    
Leased hotels42.9%67.4%60.0%+17.1 p.p.
    Manachised and franchised hotels50.7%64.1%58.3%+7.6 p.p.
Blended46.1%66.1%59.3%+13.2 p.p.
RevPAR (in EUR)    
Leased hotels41 76 68 67.3%
    Manachised and franchised hotels47 74 78 66.2%
Blended43 75 72 66.8%

 

 For full year ended
 December 31,December 31,yoy
 2021 2022 change
Average daily room rate (in EUR)  
Leased and owned hotels91 110 20.1%
Manachised and franchised hotels89 113 26.6%
Blended90 111 22.9%
Occupancy Rate (as a percentage)  
Leased and owned hotels31.6%56.0%+24.4 p.p.
Manachised and franchised hotels40.5%56.4%+15.9 p.p.
Blended35.2%56.2%+21.0 p.p.
RevPAR (in EUR)   
Leased and owned hotels29 61 112.6%
Manachised and franchised hotels36 64 76.4%
Blended32 62 96.2%


Hotel Portfolio by Brand

 As of December 31, 2022
 HotelsRoomsUnopened hotels
 in operationin pipeline
Economy hotels4,948389,3831,066
HanTing Hotel3,257288,956652
Hi Inn45623,998170
Ni Hao Hotel15911,534199
Elan Hotel83639,948-
Ibis Hotel22222,82632
Zleep Hotels182,12113
Midscale hotels2,898317,1171,146
Ibis Styles Hotel858,86425
Starway Hotel56747,378242
JI Hotel1,694199,581611
Orange Hotel51956,035261
CitiGO Hotel335,2597
Upper midscale hotels53875,467286
Crystal Orange Hotel16421,55257
Manxin Hotel11210,60159
Madison Hotel527,19564
Mercure Hotel13721,19362
Novotel Hotel174,42419
IntercityHotel(8)5610,50225
Upscale hotels13421,60972
Jaz in the City35871
Joya Hotel81,3681
Blossom House532,32649
Grand Mercure Hotel71,7265
Steigenberger Hotels & Resorts(9)5414,0408
MAXX (10)91,5628
Luxury hotels152,3185
Steigenberger Icon(11)91,8471
Song Hotels64714
Others103,5845
Other hotels(12)103,5845
Total8,543809,4782,580

(8)   As of December 31, 2022, 5 operational hotels and 11 pipeline hotels of IntercityHotel were in China.
(9)   As of December 31, 2022, 11 operational hotels and 3 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(10)   As of December 31, 2022, 3 operational hotels and 8 pipeline hotels of MAXX were in China.
(11)   As of December 31, 2022, 3 operational hotels of Steigenberger Icon were in China.
(12)   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 December 31, 2022, H World operated 8,543 hotels with 809,478 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 December 31, 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: https://ir.hworld.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.

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.

Contact Information
Investor Relations
Tel: +86 (21) 6195 9561
Email: ir@hworld.com
https://ir.hworld.com

 


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