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

Rhea-AI Summary

H World Group Limited (NASDAQ: HTHT) reported its preliminary hotel operations results for Q4 2022 and the full year ending December 31, 2022. In Q4, RevPAR for its Legacy-Huazhu business recovered to 83% of the 2019 level, with a notable recovery trend following the Chinese government's reopening policy. Blended RevPAR for Legacy-DH hotels was 110% of 2019 levels, largely driven by strong performance in Qatar and Egypt. Despite some improvements, occupancy rates remain lower than 2019 figures, and the company faces continued inflationary pressures on operating costs. Important data indicate ongoing efforts in cost management and rate increases.

Positive

• Q4 2022 RevPAR for Legacy-Huazhu reached 83% of 2019 levels.
• Blended RevPAR for Legacy-DH recovered to 110% of 2019 levels.
• Average daily room rate for leased hotels increased by 0.5% compared to 2019.
• Occupancy rate for leased hotels improved to 67.4% in Q4 2022.

Negative

• Occupancy rates remain significantly below 2019 levels, with leased hotels at 63.1%, down 21.6 p.p.
• Q4 2022 RevPAR for leased and owned hotels decreased by 25.2% compared to the same period in 2019.
• Operating costs are impacted by ongoing inflation.
• 10 hotels were temporarily closed for brand upgrades and operational issues.

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 hotels	5		(13	)	(8	)	623		89,638
Manachised and franchised hotels	239		(96	)	143		7,788		693,536
Total	244		(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 hotels	4930		1053
Leased and owned hotels	353		1
Manachised and franchised hotels	4577		1052
Midscale and upscale hotels	3481		1491
Leased and owned hotels	270		13
Manachised and franchised hotels	3211		1478
Total	8411		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 hotels	286		294		279		-2.6	%
Manachised and franchised hotels	232		248		236		1.4	%
Blended	239		254		240		0.4	%
Occupancy Rate (as a percentage)
Leased and owned hotels	67.4	%	73.1	%	63.1	%	-4.3p.p.
Manachised and franchised hotels	68.4	%	76.4	%	66.6	%	-1.8p.p.
Blended	68.2	%	76.0	%	66.2	%	-2.0p.p.
RevPAR (in RMB)
Leased and owned hotels	193		215		176		-8.8	%
Manachised and franchised hotels	159		190		157		-1.2	%
Blended	163		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 hotels	277		279		0.5	%
Manachised and franchised hotels	223		236		5.9	%
Blended	232		240		3.6	%
Occupancy Rate (as a percentage)
Leased and owned hotels	84.7	%	63.1	%	-21.6p.p.
Manachised and franchised hotels	81.6	%	66.6	%	-15.0p.p.
Blended	82.2	%	66.2	%	-16.0p.p.
RevPAR (in RMB)
Leased and owned hotels	235		176		-25.2	%
Manachised and franchised hotels	182		157		-13.6	%
Blended	191		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 hotels	286		272		-5.1	%
Manachised and franchised hotels	232		231		-0.2	%
Blended	239		236		-1.3	%
Occupancy Rate (as a percentage)
Leased and owned hotels	70.6	%	63.9	%	-6.7p.p.
Manachised and franchised hotels	72.4	%	67.1	%	-5.4p.p.
Blended	72.2	%	66.7	%	-5.5p.p.
RevPAR (in RMB)
Leased and owned hotels	202		174		-14.1	%
Manachised and franchised hotels	168		155		-7.6	%
Blended	172		157		-8.8	%

 

	For full year ended
	December 31,		December 31,		yoy
	2019		2022		change
Average daily room rate (in RMB)
Leased and owned hotels	276		272		-1.8	%
Manachised and franchised hotels	224		231		3.0	%
Blended	234		236		0.6	%
Occupancy Rate (as a percentage)
Leased and owned hotels	87.0	%	63.9	%	-23.0p.p.
Manachised and franchised hotels	83.8	%	67.1	%	-16.7p.p.
Blended	84.4	%	66.7	%	-17.7p.p.
RevPAR (in RMB)
Leased and owned hotels	240		174		-27.8	%
Manachised and franchised hotels	188		155		-17.5	%
Blended	198		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 hotels		Same-hotel RevPAR				Same-hotel ADR				Same-hotel Occupancy
	As of December 31,		For the quarter		yoy		For the quarter		yoy		For the quarter				yoy
			ended December 31,		change		ended December 31,		change		ended December 31,				change
	2021	2022	2021	2022			2021	2022			2021		2022		(p.p.)
Economy hotels	3,199	3,199	137	123	-10.1	%	183	181	-1.0	%	75.0	%	68.1	%	-6.9
Leased and owned hotels	335	335	148	132	-11.1	%	204	199	-2.6	%	72.5	%	66.2	%	-6.4
Manachised and franchised hotels	2,864	2,864	135	122	-9.9	%	179	178	-0.7	%	75.5	%	68.5	%	-7.0
Midscale and upscale hotels	2,097	2,097	215	196	-8.6	%	313	301	-3.8	%	68.6	%	65.1	%	-3.4
Leased and owned hotels	227	227	245	222	-9.5	%	387	361	-6.8	%	63.4	%	61.5	%	-1.9
Manachised and franchised hotels	1,870	1,870	209	192	-8.4	%	301	292	-3.2	%	69.5	%	65.7	%	-3.7
Total	5,296	5,296	174	158	-9.2	%	241	236	-2.0	%	72.0	%	66.7	%	-5.3

 

	Number of hotels		Same-hotel RevPAR				Same-hotel ADR				Same-hotel Occupancy
	As of December 31,		For the quarter		yoy		For the quarter		yoy		For the quarter				yoy
			ended December 31,		change		ended December 31,		change		ended December 31,				change
	2019	2022	2019	2022			2019	2022			2019		2022		(p.p.)
Economy hotels	1,969	1,969	167	122	-26.8	%	188	180	-4.1	%	88.6	%	67.6	%	-21.0
Leased and owned hotels	324	324	189	130	-31.5	%	215	197	-8.3	%	88.0	%	65.8	%	-22.2
Manachised and franchised hotels	1,645	1,645	161	120	-25.4	%	181	176	-2.8	%	88.8	%	68.1	%	-20.7
Midscale and upscale hotels	1,009	1,009	272	192	-29.4	%	325	300	-7.9	%	83.5	%	64.0	%	-19.5
Leased and owned hotels	166	166	329	202	-38.7	%	395	335	-15.3	%	83.3	%	60.3	%	-23.0
Manachised and franchised hotels	843	843	256	189	-26.1	%	307	291	-5.1	%	83.5	%	65.0	%	-18.5
Total	2,978	2,978	209	150	-28.0	%	241	227	-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 hotels		Same-hotel RevPAR				Same-hotel ADR				Same-hotel Occupancy
	As of December 31,		For the year		yoy		For the year		yoy		For the year				yoy
			ended December 31,		change		ended December 31,		change		ended December 31,				change
	2021	2022	2021	2022			2021	2022			2021		2022		(p.p.)
Economy hotels	3,199	3,199	142	123	-13.6	%	183	176	-3.6	%	77.5	%	69.5	%	-8.0
Leased and owned hotels	335	335	155	133	-14.1	%	207	194	-6.3	%	74.5	%	68.3	%	-6.2
Manachised and franchised hotels	2,864	2,864	139	121	-13.5	%	179	173	-3.1	%	78.0	%	69.7	%	-8.3
Midscale and upscale hotels	2,097	2,097	224	196	-12.4	%	315	301	-4.4	%	71.0	%	65.0	%	-6.0
Leased and owned hotels	227	227	255	219	-14.1	%	386	362	-6.3	%	66.1	%	60.6	%	-5.5
Manachised and franchised hotels	1,870	1,870	218	191	-12.0	%	303	291	-3.9	%	71.9	%	65.8	%	-6.1
Total	5,296	5,296	179	156	-13.0	%	240	231	-3.8	%	74.6	%	67.5	%	-7.1

 

	Number of hotels		Same-hotel RevPAR				Same-hotel ADR				Same-hotel Occupancy
	As of December 31,		For the year		yoy		For the year		yoy		For the year				yoy
			ended December 31,		change		ended December 31,		change		ended December 31,				change
	2019	2022	2019	2022			2019	2022			2019		2022		(p.p.)
Economy hotels	1,969	1,969	174	121	-30.5	%	192	176	-8.7	%	90.7	%	69.0	%	-21.7
Leased and owned hotels	324	324	195	130	-33.3	%	215	191	-10.9	%	90.8	%	68.0	%	-22.8
Manachised and franchised hotels	1,645	1,645	169	119	-29.6	%	186	171	-7.9	%	90.6	%	69.3	%	-21.4
Midscale and upscale hotels	1,009	1,009	276	190	-31.2	%	331	300	-9.5	%	83.2	%	63.3	%	-19.9
Leased and owned hotels	166	166	334	200	-40.0	%	396	338	-14.6	%	84.2	%	59.1	%	-25.1
Manachised and franchised hotels	843	843	258	187	-27.6	%	311	289	-7.1	%	82.9	%	64.6	%	-18.3
Total	2,978	2,978	212	147	-30.8	%	241	219	-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 hotels	2		-	2		81		15,328		26
Manachised and franchised hotels	4		-	4		51		10,976		10
Total	6		-	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 hotels	95		113		114		19.5	%
Manachised and franchised hotels	93		116		134		44.6	%
Blended	94		114		122		29.7	%
Occupancy rate (as a percentage)
Leased hotels	42.9	%	67.4	%	60.0	%	+17.1 p.p.
Manachised and franchised hotels	50.7	%	64.1	%	58.3	%	+7.6 p.p.
Blended	46.1	%	66.1	%	59.3	%	+13.2 p.p.
RevPAR (in EUR)
Leased hotels	41		76		68		67.3	%
Manachised and franchised hotels	47		74		78		66.2	%
Blended	43		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 hotels	91		110		20.1	%
Manachised and franchised hotels	89		113		26.6	%
Blended	90		111		22.9	%
Occupancy Rate (as a percentage)
Leased and owned hotels	31.6	%	56.0	%	+24.4 p.p.
Manachised and franchised hotels	40.5	%	56.4	%	+15.9 p.p.
Blended	35.2	%	56.2	%	+21.0 p.p.
RevPAR (in EUR)
Leased and owned hotels	29		61		112.6	%
Manachised and franchised hotels	36		64		76.4	%
Blended	32		62		96.2	%

Hotel Portfolio by Brand

	As of December 31, 2022
	Hotels	Rooms	Unopened hotels
	in operation		in pipeline
Economy hotels	4,948	389,383	1,066
HanTing Hotel	3,257	288,956	652
Hi Inn	456	23,998	170
Ni Hao Hotel	159	11,534	199
Elan Hotel	836	39,948	-
Ibis Hotel	222	22,826	32
Zleep Hotels	18	2,121	13
Midscale hotels	2,898	317,117	1,146
Ibis Styles Hotel	85	8,864	25
Starway Hotel	567	47,378	242
JI Hotel	1,694	199,581	611
Orange Hotel	519	56,035	261
CitiGO Hotel	33	5,259	7
Upper midscale hotels	538	75,467	286
Crystal Orange Hotel	164	21,552	57
Manxin Hotel	112	10,601	59
Madison Hotel	52	7,195	64
Mercure Hotel	137	21,193	62
Novotel Hotel	17	4,424	19
IntercityHotel(8)	56	10,502	25
Upscale hotels	134	21,609	72
Jaz in the City	3	587	1
Joya Hotel	8	1,368	1
Blossom House	53	2,326	49
Grand Mercure Hotel	7	1,726	5
Steigenberger Hotels & Resorts(9)	54	14,040	8
MAXX (10)	9	1,562	8
Luxury hotels	15	2,318	5
Steigenberger Icon(11)	9	1,847	1
Song Hotels	6	471	4
Others	10	3,584	5
Other hotels(12)	10	3,584	5
Total	8,543	809,478	2,580

(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

 

FAQ

What were H World Group's Q4 2022 RevPAR results?

H World Group's Q4 2022 RevPAR for Legacy-Huazhu recovered to 83% of the 2019 level.

How did the pandemic affect H World Group's operations in 2022?

The pandemic led to significant occupancy declines, with leased hotels' occupancy at 63.1%, down from 84.7% in 2019.

What is the stock symbol for H World Group?

The stock symbol for H World Group is HTHT.

What factors are impacting H World Group's operating costs in 2022?

Ongoing inflation is negatively affecting H World Group's operating costs.

How many hotels did H World Group temporarily close in Q4 2022?

H World Group temporarily closed 10 hotels in Q4 2022 for brand upgrades and operational issues.