H World Group Limited Announces Preliminary Results for Hotel Operations in the Third Quarter of 2023

Rhea-AI Summary

H World Group Limited announces preliminary results for Q3 2023

Positive

• RevPAR in Q3 2023 recovered to 129% of the 2019 level
• RevPAR growth primarily driven by ADR growth
• Hotel openings picked up with 545 hotels opened in Q3 2023
• RevPAR for Legacy-DH recovered to 107% of the 2019 level

Negative

• None.

SINGAPORE and SHANGHAI, China, Oct. 20, 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 third quarter (“Q3 2023”) ended September 30, 2023.

Business update
For our Legacy-Huazhu business, our RevPAR in Q3 2023 recovered to 129% of the 2019 level, supported by the strong travel demand. Breaking down into monthly numbers, our RevPAR in July, August and September 2023 recovered to 132%, 128% and 128% of the 2019 levels, respectively. While the RevPAR growth continued to be primarily driven by ADR growth, the occupancy rate recovery also improved sequentially this quarter. In Q3 2023, our hotel openings picked up with a gross openings of 545 hotels, and our hotel closures amounted to 139 hotels.

Steigenberger Hotels GmbH and its subsidiaries (“DH”, or “Legacy-DH”) continued its promising business recovery trend and its RevPAR recovered to 107% of the 2019 level.

Operating Results: Legacy-Huazhu⁽¹⁾

	Number of hotels									Number of rooms
	Opened in Q3 2023		Closed (2) in Q3 2023		Net added in Q3 2023		As of September 30, 2023			As of September 30, 2023
Leased and owned hotels	4		(12	)	(8	)	608			87,026
Manachised and franchised hotels	541		(127	)	414		8,420			772,258
Total	545		(139	)	406		9,028			859,284
(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 Q3 2023, we temporarily closed 8 hotels for brand upgrade or business model change purposes.

	As of September 30, 2023
	Number of hotels		Unopened hotels in pipeline
Economy hotels	4,992		1,084
Leased and owned hotels	334		1
Manachised and franchised hotels	4,658		1,083
Midscale, upper-midscale hotels and others	4,036		1,851
Leased and owned hotels	274		14
Manachised and franchised hotels	3,762		1,837
Total	9,028		2,935

	For the quarter ended
	September 30,		June 30,		September 30,		yoy
	2022		2023		2023		change
Average daily room rate (in RMB)
Leased and owned hotels	294		384		406		38.1	%
Manachised and franchised hotels	248		295		314		26.4	%
Blended	254		305		324		27.7	%
Occupancy rate (as a percentage)
Leased and owned hotels	73.1	%	83.6	%	87.8	%	+14.7 p.p.
Manachised and franchised hotels	76.4	%	81.6	%	85.7	%	+9.2 p.p.
Blended	76.0	%	81.8	%	85.9	%	+9.8 p.p.
RevPAR (in RMB)
Leased and owned hotels	215		321		356		65.8	%
Manachised and franchised hotels	190		241		269		41.7	%
Blended	193		250		278		44.3	%

	For the quarter ended
	September 30,		September 30,		yoy
	2019		2023		change
Average daily room rate (in RMB)
Leased and owned hotels	288		406		41.0	%
Manachised and franchised hotels	235		314		33.4	%
Blended	245		324		32.1	%
Occupancy rate (as a percentage)
Leased and owned hotels	90.0	%	87.8	%	-2.3 p.p.
Manachised and franchised hotels	87.2	%	85.7	%	-1.5 p.p.
Blended	87.7	%	85.9	%	-1.8 p.p.
RevPAR (in RMB)
Leased and owned hotels	259		356		37.5	%
Manachised and franchised hotels	205		269		31.1	%
Blended	215		278		29.4	%

Same-hotel operational data by class
Mature hotels in operation for more than 18 months

	Number of hotels				Same-hotel RevPAR						Same-hotel ADR						Same-hotel Occupancy
	As of September 30,				For the quarter ended September 30,				yoy change		For the quarter ended September 30,				yoy change		For the quarter ended September 30,				yoy change (p.p.)
	2022		2023		2022		2023				2022		2023				2022		2023
Economy hotels	3,669		3,669		154		216		40.1	%	192		247		28.8	%	80.3	%	87.3	%	+7.1
Leased and owned hotels	322		322		167		263		57.7	%	213		295		38.9	%	78.4	%	89.0	%	+10.6
Manachised and franchised hotels	3,347		3,347		152		209		37.3	%	189		240		26.9	%	80.5	%	87.1	%	+6.6
Midscale, upper-midscale hotels and others	2,797		2,797		244		343		41.0	%	325		399		22.5	%	74.8	%	86.1	%	+11.3
Leased and owned hotels	254		254		270		439		62.5	%	390		504		29.1	%	69.2	%	87.1	%	+17.9
Manachised and franchised hotels	2,543		2,543		240		329		37.3	%	317		383		20.8	%	75.7	%	86.0	%	+10.3
Total	6,466		6,466		199		281		41.1	%	257		324		26.2	%	77.5	%	86.7	%	+9.2

Operating Results: Legacy-DH⁽³⁾

	Number of hotels								Number of rooms		Unopened hotels in pipeline As of September 30, 2023
	Opened in Q3 2023		Closed in Q3 2023		Net added in Q3 2023		As of September 30, 2023(4)		As of September 30, 2023
Leased hotels	2		-		2		82		15,961		24
Manachised and franchised hotels	-		(1	)	(1	)	47		10,511		11
Total	2		(1	)	1		129		26,472		35
(3) Legacy-DH refers to DH. (4) As of September 30, 2023, a total of 3 hotels were temporarily closed due to repair work.

	For the quarter ended
	September 30,		June 30,		September 30,		yoy
	2022		2023		2023		change
Average daily room rate (in EUR)
Leased hotels	113		119		113		0.0	%
Manachised and franchised hotels	116		112		116		0.3	%
Blended	114		117		114		0.1	%
Occupancy rate (as a percentage)
Leased hotels	67.4	%	69.4	%	71.4	%	+4.0 p.p.
Manachised and franchised hotels	64.1	%	63.8	%	65.5	%	+1.4 p.p.
Blended	66.1	%	67.1	%	69.0	%	+2.9 p.p.
RevPAR (in EUR)
Leased hotels	76		83		81		5.9	%
Manachised and franchised hotels	74		71		76		2.4	%
Blended	75		78		79		4.5	%

Hotel Portfolio by Brand

	As of September 30, 2023
	Hotels		Rooms		Unopened hotels in pipeline
	in operation
Economy hotels	5,007		405,226		1,097
HanTing Hotel	3,500		311,067		700
Hi Inn	461		24,272		180
Ni Hao Hotel	247		18,369		181
Elan Hotel	561		27,244		1
Ibis Hotel	223		22,541		22
Zleep Hotels	15		1,733		13
Midscale hotels	3,329		359,600		1,432
Ibis Styles Hotel	98		9,893		29
Starway Hotel	636		54,705		229
JI Hotel	1,980		229,990		890
Orange Hotel	615		65,012		284
Upper midscale hotels	663		94,523		369
Crystal Orange Hotel	175		22,876		108
CitiGO Hotel	35		5,301		3
Manxin Hotel	127		11,994		70
Madison Hotel	80		10,447		57
Mercure Hotel	157		25,907		56
Novotel Hotel	21		5,415		18
IntercityHotel(5)	59		11,326		53
MAXX(6)	9		1,257		4
Upscale hotels	132		20,789		64
Jaz in the City	3		587		1
Joya Hotel	7		1,234		-
Blossom House	59		2,750		51
Grand Mercure Hotel	9		1,823		3
Steigenberger Hotels & Resorts(7)	54		14,395		9
Luxury hotels	16		2,360		2
Steigenberger Icon(8)	9		1,847		1
Song Hotels	7		513		1
Others	10		3,258		6
Other hotels(9)	10		3,258		6
Total	9,157		885,756		2,970
(5) As of September 30, 2023, 6 operational hotels and 41 pipeline hotels of IntercityHotel were in China. (6) As of September 30, 2023, 4 operational hotels and 4 pipeline hotels of MAXX were in China. (7) As of September 30, 2023, 11 operational hotels and 3 pipeline hotels of Steigenberger Hotels & Resorts were in China. (8) As of September 30, 2023, 3 operational hotels of Steigenberger Icon were in China. (9) 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 September 30, 2023, H World operated 9,157 hotels with 885,756 rooms in operation in 18 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 September 30, 2023, H World operates 12 percent of its hotel rooms under lease and ownership model, and 88 percent under manachise and franchise model.

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 is the RevPAR growth in Q3 2023?

RevPAR in Q3 2023 recovered to 129% of the 2019 level.

What drove the RevPAR growth?

RevPAR growth was primarily driven by ADR growth.

How many hotels were opened in Q3 2023?

545 hotels were opened in Q3 2023.

What is the RevPAR for Legacy-DH in Q3 2023?

RevPAR for Legacy-DH recovered to 107% of the 2019 level.