Huazhu Group Limited Reports Fourth Quarter and Full Year 2021 Unaudited Financial Results
Huazhu Group Limited (NASDAQ: HTHT) reported its unaudited financial results for Q4 and the full year of 2021, showing a year-over-year revenue increase of 9.1% to RMB3.4 billion in Q4 and 25.4% to RMB12.8 billion for the full year. However, the company faced a net loss of RMB459 million for Q4, compared to a profit of RMB703 million in Q4 2020, with a total net loss of RMB465 million for the year. Looking ahead, Huazhu expects revenue growth of 11%-15% in Q1 2022 and 15%-20% for the full year, notwithstanding challenges from ongoing COVID-19 impacts and global uncertainties.
- Revenue increased 9.1% year-over-year to RMB3.4 billion for Q4 2021.
- Full year revenue increased 25.4% to RMB12.8 billion for 2021.
- Adjusted EBITDA of RMB278 million for Q4 2021, despite challenges.
- Net loss of RMB459 million for Q4 2021, compared to profit of RMB703 million in Q4 2020.
- Jan-Feb 2022 RevPAR recovery lagged at 75% and 83% of 2019 levels due to Omicron variant.
- Ongoing uncertainties and fluctuations due to China's 'zero-COVID' policy.
- A total of 7,830 hotels or 753,216 hotel rooms in operation as of December 31, 2021.
- Hotel turnover1 increased
8.3% year-over-year to RMB11.9 billion for the fourth quarter of 2021, and increased36.4% year-over-year to RMB45.4 billion for the full year of 2021. Excluding Steigenberger Hotels AG and its subsidiaries (“DH”, or “Legacy-DH”), hotel turnover increased2.2% year-over-year for the fourth quarter and increased38.3% year-over-year for the full year of 2021. - Revenue increased
9.1% year-over-year to RMB3.4 billion (US$526 million )2 for the fourth quarter of 2021, in line with revenue guidance previously announced of6% to10% compared to the fourth quarter of 2020, and increased25.4% year-over-year to RMB12.8 billion (US$2.0 billion ) for the full year of 2021. Revenue from Legacy-Huazhu segment for the fourth quarter of 2021 decreased1.6% year-over-year, better than revenue guidance previously announced of negative4% to negative8% . - Net loss attributable to Huazhu Group Limited was RMB459 million (US
$72 million ) for the fourth quarter of 2021, compared with net income attributable to Huazhu Group Limited of RMB703 million for the fourth quarter of 2020 and net loss attributable to Huazhu Group Limited of RMB137 million in the previous quarter. Net loss attributable to Huazhu Group Limited was RMB465 million (US$73 million ) for the full year of 2021, compared with RMB2.2 billion for the full year of 2020. Net loss attributable to Huazhu Group Limited from Legacy-Huazhu segment was RMB419 million for the fourth quarter of 2021, compared with net income attributable to Huazhu Group Limited from Legacy-Huazhu segment of RMB1.0 billion for the fourth quarter of 2020. Net income attributable to Huazhu Group Limited from Legacy-Huazhu segment was RMB153 million for the full year of 2021, compared with net loss attributable to Huazhu Group Limited from Legacy-Huazhu segment of RMB847 million for the full year of 2020. - EBITDA (non-GAAP) for the fourth quarter of 2021 was RMB46 million (US
$7 million ), compared with RMB1.1 billion for the fourth quarter of 2020. EBITDA (non-GAAP) for the full year of 2021 was RMB1.4 billion (US$215 million ), compared with negative RMB631 million for the full year of 2020. EBITDA (non-GAAP) from Legacy-Huazhu segment was negative RMB23 million for the fourth quarter of 2021, compared with RMB1.5 billion for the fourth quarter of 2020. EBITDA (non-GAAP) from Legacy-Huazhu segment was RMB1.8 billion for the full year of 2021, compared with RMB736 million for the full year of 2020. - Adjusted EBITDA (non-GAAP), which excluded share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities, was RMB278 million (US
$43 million ) for the fourth quarter of 2021, compared with RMB375 million for the fourth quarter of 2020. Adjusted EBITDA (non-GAAP) for the full year of 2021 was RMB1.6 billion (US$247 million ), compared with negative RMB244 million for the full year of 2020. Adjusted EBITDA (non-GAAP) from Legacy-Huazhu segment was RMB209 million for the fourth quarter of 2021, compared with RMB764 million for the fourth quarter of 2020. Adjusted EBITDA (non-GAAP) from Legacy-Huazhu segment was RMB2.0 billion for the full year of 2021, compared with RMB1.1 billion for the full year of 2020. - In the first quarter of 2022, Huazhu expects revenue growth to be in the range of
11% -15% compared to the first quarter of 2021, or to range from1% to5% if excluding DH. For the full year of 2022, we expect revenue growth to range from15% to20% compared to the full year of 2021, or to range from4% to9% if excluding DH.
SHANGHAI, China., March 23, 2022 (GLOBE NEWSWIRE) -- 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 fourth quarter and full year ended December 31, 2021.
As of December 31, 2021, Huazhu’s worldwide hotel network in operation totaled 7,830 hotels and 753,216 rooms, including 124 hotels from DH. For the full year of 2021, the Company opened 33 leased hotels and 1,507 manachised and franchised hotels, and closed 48 leased hotels and 451 manachised and franchised hotels. During the fourth quarter of 2021, our Legacy-Huazhu business opened 443 hotels, including 7 leased (or leased-and-operated) hotels and 436 manachised (or franchised-and-managed) hotels and franchised hotels, and closed a total of 82 hotels, including 8 leased hotels and 74 manachised and franchised hotels. For the full year of 2021, Legacy-Huazhu opened 29 leased hotels and 1,503 manachised and franchised hotels, and closed 48 leased hotels and 447 manachised and franchised hotels. During the fourth quarter of 2021, the Legacy-DH business opened 1 leased hotel and 3 manachised and franchised hotels, and closed 1 manachised and franchised hotel. For the full year of 2021, Legacy-DH opened 4 leased hotels and 4 manachised and franchised hotels, and closed 4 manachised and franchised hotels. As of December 31, 2021, Huazhu had a total of 2,608 unopened hotels in our pipeline, including 2,571 hotels from the Legacy-Huazhu business and 37 hotels from the Legacy-DH business.
Legacy-Huazhu Only – Fourth Quarter and Full Year of 2021 Operational Highlights
As of December 31, 2021, Legacy-Huazhu had 7,706 hotels in operation, including 662 leased and owned hotels, and 7,044 manachised and franchised hotels. In addition, as of the same date, Legacy-Huazhu had 728,143 hotel rooms in operation, including 91,284 rooms under the lease and ownership model, and 636,859 rooms under the manachise and franchise models. Legacy-Huazhu also had 2,571 unopened hotels in our pipeline, including 18 leased and owned hotels and 2,553 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 RMB239 in the fourth quarter of 2021, compared with RMB231 in the fourth quarter of 2020, RMB246 in the previous quarter, and RMB232 in the fourth quarter of 2019. The ADR was RMB239 for the full year of 2021, compared with RMB210 for the previous year, and RMB234 for the 2019.
• The occupancy rate for all Legacy-Huazhu hotels in operation was
• Blended RevPAR was RMB163 in the fourth quarter of 2021, compared with RMB186 in the fourth quarter of 2020, RMB177 in the previous quarter, and RMB191 in the fourth quarter of 2019. Blended RevPAR was RMB172 for the full year of 2021, compared with RMB149 for the previous year, and RMB198 for the 2019.
• For all Legacy-Huazhu hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB162 for the fourth quarter of 2021, representing a
Legacy-DH Only – Fourth Quarter and Full Year of 2021 Operational Highlights
As of December 31, 2021, Legacy-DH had 124 hotels in operation, including 76 leased and owned hotels and 48 manachised and franchised hotels. In addition, as of the same date, Legacy-DH had 25,073 hotel rooms in operation, including 14,264 rooms under the lease and ownership model, and 10,809 rooms under the manachise and franchise models. Legacy-DH also had unopened 37 hotels in our pipeline, including 28 leased and owned hotels and 9 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 EUR94 in the fourth quarter of 2021, compared with EUR76 in the fourth quarter of 2020 and EUR99 in the previous quarter. The ADR was EUR90 for the full year of 2021, compared with EUR88 for the previous year.
• The occupancy rate for all Legacy-DH hotels in operation was
• Blended RevPAR was EUR43 in the fourth quarter of 2021, compared with EUR17 in the fourth quarter of 2020 and EUR48 in the previous quarter. Blended RevPAR was EUR32 for the full year of 2021, compared with EUR31 for the previous year.
Jin Hui, CEO of Huazhu commented: “An upsurge of COVID-19 in more than 20 Chinese provinces has occurred since November 2021and negatively affected our business recovery in the fourth quarter, with RevPAR recovering to
“2021 was another challenging year due to COVID-19, especially in the second half,” Mr. Jin continued. “Although the near-term business performance could still inevitably see some volatilities, not only from the pandemic but also from various global macro factors, our long-term view on the Chinese lodging industry remains optimistic and unchanged. We are unswervingly implementing our “Sustainable Quality Growth” strategy which means that while growth is still the main theme, quality and sustainability are two critical prerequisites. We are continuously putting greater emphasis on our customers’ satisfaction and our franchisees’ profitability. Last but not least, Germany was gradually reopening since mid-February 2022, which could help reaccelerate our RevPAR recovery. Additionally, operational efficiency improvement and continuous digital transformation will remain as our near-term focus.
Fourth Quarter and Full Year of 2021 Unaudited Financial Results
(RMB in millions) | Q4 2020 | Q3 2021 | Q4 2021 | 2020FY | 2021FY |
| Revenue: | |||||
| Leased and owned hotels | 2,024 | 2,345 | 2,093 | 6,908 | 8,118 |
| Manachised and franchised hotels | 999 | 1,128 | 1,098 | 3,136 | 4,398 |
| Others | 48 | 50 | 159 | 152 | 271 |
| Total revenue | 3,071 | 3,523 | 3,350 | 10,196 | 12,787 |
Revenue for the fourth quarter of 2021 was RMB3.4 billion (US
Revenue for the full year of 2021 was RMB12.8 billion (US
Revenue from leased and owned hotels for the fourth quarter of 2021 was RMB2.1 billion (US
For the full year of 2021, revenue from leased and owned hotels was RMB8.1 billion (US
Revenue from manachised and franchised hotels for the fourth quarter of 2021 was RMB1.1 billion (US
For the full year of 2021, revenue from manachised and franchised hotels was RMB4.4 billion (US
Other revenue represents 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 segment business, totaling RMB159 million (US
For the full year of 2021, other revenues was RMB271 million (US
(RMB in millions) | Q4 2020 | Q3 2021 | Q4 2021 | 2020FY | 2021FY | |||||
| Operating costs and expenses: | ||||||||||
| Hotel operating costs | (2,748 | ) | (2,885 | ) | (3,197 | ) | (9,729 | ) | (11,286 | ) |
| Other operating costs | (22 | ) | (14 | ) | (19 | ) | (52 | ) | (58 | ) |
| Selling and marketing expenses | (181 | ) | (189 | ) | (183 | ) | (597 | ) | (641 | ) |
| General and administrative expenses | (336 | ) | (388 | ) | (441 | ) | (1,259 | ) | (1,547 | ) |
| Pre-opening expenses | (36 | ) | (15 | ) | (30 | ) | (288 | ) | (81 | ) |
| Total operating costs and expenses | (3,323 | ) | (3,491 | ) | (3,870 | ) | (11,925 | ) | (13,613 | ) |
Hotel operating costs for the fourth quarter of 2021 were RMB3.2 billion (US
For the full year of 2021, hotel operating costs were RMB11.3 billion (US
Selling and marketing expenses for the fourth quarter of 2021 were RMB183 million (US
For the full year of 2021, selling and marketing expenses were RMB641 million (US
General and administrative expenses for the fourth quarter of 2021 were RMB441 million (US
For the full year of 2021, general and administrative expenses were RMB1.5 billion (US
Pre-opening expenses for the fourth quarter of 2021 were mostly related to Legacy-Huazhu segment and totaled RMB30 million (US
Pre-opening expenses for the full year of 2021 were RMB81 million (US
Other operating income, net for the fourth quarter of 2021 was RMB559 million (US
Other operating income, net for the full year of 2021 was RMB990 million (US
Income from operations for the fourth quarter of 2021 was RMB39 million (US
Income from operations for the full year of 2021 was RMB164 million (US
Operating margin, defined as income from operations as a percentage of revenues, for the fourth quarter of 2021, was
Operating margin for the full year of 2021 was
Other expense, net for the fourth quarter of 2021 was RMB47 million (US
Other income, net for the full year of 2021 was RMB157 million (US
Unrealized losses from fair value changes of equity securities for the fourth quarter of 2021 were RMB217 million (US
For the full year of 2021, unrealized losses from fair value changes of equity securities were RMB96 million (US
Income tax expense for the fourth quarter of 2021 was RMB16 million (US
Net loss attributable to Huazhu Group Limited for the fourth quarter of 2021 was RMB459 million (US
Net loss attributable to Huazhu Group Limited for the full year of 2021 was RMB465 million (US
Basic and diluted losses per share/American depositary share (ADS). For the fourth quarter of 2021, basic and diluted losses per share were RMB0.15 (US
For the full year of 2021, basic and diluted losses per share were RMB0.15 (US
EBITDA (non-GAAP) for the fourth quarter of 2021 was RMB46 million (US
EBITDA (non-GAAP) for the full year of 2021 was RMB1.4 billion (US
Cash flow. Operating cash inflow for the fourth quarter of 2021 was RMB867 million (US
Operating cash inflow for the full year of 2021 was RMB1.3 billion (US
Cash and cash equivalents and Restricted cash. As of December 31, 2021, the Company had a total balance of cash and cash equivalents of RMB5.1 billion (US
Debt financing. As of December 31, 2021, the Company had a total debt balance of RMB9.8 billion (US
COVID-19 update
For our Legacy-Huazhu business, RevPAR recovery in Q4 2021 was still significantly impacted by several COVID-19 resurgences in China. In terms of monthly breakdown, our RevPAR recovered to
After a good business recovery in Q3 2021 – thanks to the progress of vaccination campaigns and easing of restrictions – our DH business in Q4 2021 was impacted by tightened governmental control measures and testing requirements due to the third and fourth waves of the COVID-19 pandemic in European countries. As a result, the recovery trend of DH was disrupted in November 2021, as RevPAR and occupancy numbers declined compared to those in the summer. However, an opening-up plan has been unfolding since mid-February 2022, and this is expected to lead to substantially normalized circumstances for public and business life. With the continuous implementation of opening-up plans, our RevPAR recovery should see reacceleration.
Meanwhile, DH continues its effort to implement a comprehensive cash flow improvement program, especially focusing on efficiency improvements, negotiation of further lease waivers, and personnel cost optimization. In addition, a government subsidy of EUR60 million was received in December 2021, and the short-time work compensation program has been extended until June 30, 2022.
Guidance
Since March 2022, the highly infectious Omicron variant has been spreading rapidly in China which again seriously affected our business performance. Also, China’s unchanged “zero-COVID” policy has rendered business recovery more unpredictable in the foreseeable future. Moreover, the recent global unrest may further bring uncertainties to our international business recovery. Therefore, the guidance is only reflecting our current views based on our best understanding of the recent situation.
Huazhu expects to open around 1,500 hotels and close 500-550 hotels in 2022.
In the first quarter of 2022, Huazhu expects revenue growth to be in the range of
For the full year of 2022, we expect revenue growth to range from
The above forecast reflects the Company’s current and preliminary view, which is subject to change.
Repurchase plan
Huazhu may from time to time make repurchases of its securities, including American depositary shares and convertible notes, in open market transactions, privately negotiated transactions or otherwise, subject to market conditions and other factors.
Conference Call
Huazhu’s management will host a conference call at 9 p.m. (U.S. Eastern time) on Wednesday, March 23, 2022 (or 9 a.m. (Hong Kong time) on Thursday, March 24, 2022) 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/4278849 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 instantly. 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 March 31, 2022. Please dial +1 (855) 452 5696 (for callers in the US), 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 4278849.
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 Measures
To 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 U.S. Securities and Exchange Commission (“SEC”): 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 (losses) 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. 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 Limited
Originated in China, Huazhu Group Limited is a world-leading hotel group. As of December 31, 2021, Huazhu operated 7,830 hotels with 753,216 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 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 December 31, 2021, Huazhu operates 14 percent of its hotel rooms under lease and ownership model, and 86 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 SEC. 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 | December 31, 2021 | ||||||
| RMB | RMB | US$3 | |||||
| (in millions) | |||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | 7,026 | 5,116 | 803 | ||||
| Restricted cash | 64 | 25 | 4 | ||||
| Short-term investments | 3,903 | 2,589 | 406 | ||||
| Accounts receivable, net | 404 | 521 | 82 | ||||
| Loan receivables, net | 304 | 218 | 34 | ||||
| Amounts due from related parties | 178 | 149 | 23 | ||||
| Inventories | 89 | 88 | 14 | ||||
| Other current assets, net | 914 | 847 | 133 | ||||
| Total current assets | 12,882 | 9,553 | 1,499 | ||||
| Property and equipment, net | 6,682 | 7,056 | 1,107 | ||||
| Intangible assets, net | 5,945 | 5,385 | 845 | ||||
| Operating lease right-of-use assets | 28,980 | 29,942 | 4,698 | ||||
| Finance lease right-of-use assets | 2,041 | 2,235 | 351 | ||||
| Land use rights, net | 213 | 206 | 32 | ||||
| Long-term investments | 1,923 | 1,965 | 308 | ||||
| Goodwill | 4,988 | 5,132 | 805 | ||||
| Amounts due from related parties, non-current | - | 1 | 0 | ||||
| Loan receivables, net | 135 | 98 | 15 | ||||
| Other assets, net | 743 | 834 | 131 | ||||
| Deferred tax assets | 623 | 862 | 136 | ||||
| Total assets | 65,155 | 63,269 | 9,927 | ||||
| LIABILITIES AND EQUITY | |||||||
| Current liabilities: | |||||||
| Short-term debt | 1,142 | 6,232 | 978 | ||||
| Accounts payable | 1,241 | 968 | 152 | ||||
| Amounts due to related parties | 132 | 197 | 31 | ||||
| Salary and welfare payables | 526 | 591 | 93 | ||||
| Deferred revenue | 1,272 | 1,366 | 214 | ||||
| Operating lease liabilities, current | 3,406 | 3,628 | 569 | ||||
| Finance lease liabilities, current | 31 | 41 | 6 | ||||
| Accrued expenses and other current liabilities | 2,440 | 1,838 | 288 | ||||
| Income tax payable | 339 | 418 | 66 | ||||
| Total current liabilities | 10,529 | 15,279 | 2,397 | ||||
| Long-term debt | 10,856 | 3,565 | 559 | ||||
| Operating lease liabilities, non-current | 27,048 | 28,012 | 4,396 | ||||
| Finance lease liabilities, non-current | 2,497 | 2,684 | 421 | ||||
| Deferred revenue | 662 | 785 | 123 | ||||
| Other long-term liabilities | 771 | 903 | 142 | ||||
| Deferred tax liabilities | 1,181 | 853 | 134 | ||||
| Retirement benefit obligations | 179 | 144 | 23 | ||||
| Total liabilities | 53,723 | 52,225 | 8,195 | ||||
| Equity: | |||||||
| Ordinary shares | 0 | 0 | 0 | ||||
| Treasury shares | (107 | ) | (107 | ) | (17 | ) | |
| Additional paid-in capital | 9,808 | 9,964 | 1,563 | ||||
| Retained earnings | 1,502 | 1,037 | 163 | ||||
| Accumulated other comprehensive income | 127 | 41 | 6 | ||||
| Total Huazhu Group Limited shareholders' equity | 11,330 | 10,935 | 1,715 | ||||
| Noncontrolling interest | 102 | 109 | 17 | ||||
| Total equity | 11,432 | 11,044 | 1,732 | ||||
| Total liabilities and equity | 65,155 | 63,269 | 9,927 | ||||
| Huazhu Group Limited | ||||||||||||||
| Unaudited Condensed Consolidated Statements of Comprehensive Income | ||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||
| December 31, 2020 | September 30, 2021 | December 31, 2021 | December 31, 2020 | December 31, 2021 | ||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
| (in millions, except shares, per share and per ADS data) | ||||||||||||||
| Revenue: | ||||||||||||||
| Leased and owned hotels | 2,024 | 2,345 | 2,093 | 329 | 6,908 | 8,118 | 1,274 | |||||||
| Manachised and franchised hotels | 999 | 1,128 | 1,098 | 172 | 3,136 | 4,398 | 690 | |||||||
| Others | 48 | 50 | 159 | 25 | 152 | 271 | 43 | |||||||
| Total revenue | 3,071 | 3,523 | 3,350 | 526 | 10,196 | 12,787 | 2,007 | |||||||
| Operating costs and expenses: | ||||||||||||||
| Hotel operating costs: | ||||||||||||||
| Rents | (929 | ) | (1,009 | ) | (998 | ) | (157 | ) | (3,485 | ) | (3,900 | ) | (612 | ) |
| Utilities | (120 | ) | (137 | ) | (122 | ) | (19 | ) | (478 | ) | (507 | ) | (80 | ) |
| Personnel costs | (738 | ) | (793 | ) | (841 | ) | (132 | ) | (2,501 | ) | (3,022 | ) | (474 | ) |
| Depreciation and amortization | (348 | ) | (356 | ) | (365 | ) | (57 | ) | (1,316 | ) | (1,413 | ) | (222 | ) |
| Consumables, food and beverage | (257 | ) | (264 | ) | (282 | ) | (44 | ) | (885 | ) | (970 | ) | (152 | ) |
| Others | (356 | ) | (326 | ) | (589 | ) | (92 | ) | (1,064 | ) | (1,474 | ) | (231 | ) |
| Total hotel operating costs | (2,748 | ) | (2,885 | ) | (3,197 | ) | (501 | ) | (9,729 | ) | (11,286 | ) | (1,771 | ) |
| Other operating costs | (22 | ) | (14 | ) | (19 | ) | (3 | ) | (52 | ) | (58 | ) | (9 | ) |
| Selling and marketing expenses | (181 | ) | (189 | ) | (183 | ) | (29 | ) | (597 | ) | (641 | ) | (101 | ) |
| General and administrative expenses | (336 | ) | (388 | ) | (441 | ) | (70 | ) | (1,259 | ) | (1,547 | ) | (242 | ) |
| Pre-opening expenses | (36 | ) | (15 | ) | (30 | ) | (5 | ) | (288 | ) | (81 | ) | (13 | ) |
| Total operating costs and expenses | (3,323 | ) | (3,491 | ) | (3,870 | ) | (608 | ) | (11,925 | ) | (13,613 | ) | (2,136 | ) |
| Goodwill impairment loss | - | - | - | - | (437 | ) | - | - | ||||||
| Other operating income (expense), net | 118 | 40 | 559 | 88 | 480 | 990 | 155 | |||||||
| Income (losses) from operations | (134 | ) | 72 | 39 | 6 | (1,686 | ) | 164 | 26 | |||||
| Interest income | 33 | 25 | 23 | 4 | 119 | 89 | 14 | |||||||
| Interest expense | (118 | ) | (101 | ) | (92 | ) | (14 | ) | (533 | ) | (405 | ) | (64 | ) |
| Other (expense) income, net | (8 | ) | 4 | (47 | ) | (7 | ) | (89 | ) | 157 | 25 | |||
| Unrealized gains (losses) from fair value changes of equity securities | 733 | (60 | ) | (217 | ) | (34 | ) | (265 | ) | (96 | ) | (15 | ) | |
| Foreign exchange (loss) gain | 151 | (92 | ) | (112 | ) | (18 | ) | 175 | (317 | ) | (50 | ) | ||
| Income (loss) before income taxes | 657 | (152 | ) | (406 | ) | (63 | ) | (2,279 | ) | (408 | ) | (64 | ) | |
| Income tax benefit (expense) | 66 | 13 | (16 | ) | (3 | ) | 215 | (12 | ) | (2 | ) | |||
| Income (loss) from equity method investments | (11 | ) | 3 | (42 | ) | (7 | ) | (140 | ) | (60 | ) | (9 | ) | |
| Net income (loss) | 712 | (136 | ) | (464 | ) | (73 | ) | (2,204 | ) | (480 | ) | (75 | ) | |
| Net (income) loss attributable to noncontrolling interest | (9 | ) | (1 | ) | 5 | 1 | 12 | 15 | 2 | |||||
| Net income (loss) attributable to Huazhu Group Limited | 703 | (137 | ) | (459 | ) | (72 | ) | (2,192 | ) | (465 | ) | (73 | ) | |
| Other comprehensive income | ||||||||||||||
| Gain arising from defined benefit plan, net of tax | (27 | ) | 1 | 13 | 2 | (27 | ) | 13 | 2 | |||||
| Foreign currency translation adjustments, net of tax | (8 | ) | (28 | ) | 7 | 1 | 203 | (99 | ) | (16 | ) | |||
| Comprehensive income (loss) | 677 | (163 | ) | (444 | ) | (70 | ) | (2,028 | ) | (566 | ) | (89 | ) | |
| Comprehensive (income) loss attributable to noncontrolling interest | (9 | ) | (1 | ) | 5 | 1 | 12 | 15 | 2 | |||||
| Comprehensive income (loss) attributable to Huazhu Group Limited | 668 | (164 | ) | (439 | ) | (69 | ) | (2,016 | ) | (551 | ) | (87 | ) | |
| Earnings (losses) per share(1): | ||||||||||||||
| Basic | 0.23 | (0.04 | ) | (0.15 | ) | (0.02 | ) | (0.75 | ) | (0.15 | ) | (0.02 | ) | |
| Diluted | 0.22 | (0.04 | ) | (0.15 | ) | (0.02 | ) | (0.75 | ) | (0.15 | ) | (0.02 | ) | |
| Earnings (losses) per ADS: | ||||||||||||||
| Basic | 2.27 | (0.44 | ) | (1.47 | ) | (0.23 | ) | (7.49 | ) | (1.49 | ) | (0.23 | ) | |
| Diluted | 2.16 | (0.44 | ) | (1.47 | ) | (0.23 | ) | (7.49 | ) | (1.49 | ) | (0.23 | ) | |
| Weighted average number of shares used in computation: | ||||||||||||||
| Basic | 3,097,524,615 | 3,115,104,798 | 3,117,745,440 | 3,117,745,440 | 2,927,398,409 | 3,114,124,244 | 3,114,124,244 | |||||||
| Diluted | 3,263,266,396 | 3,115,104,798 | 3,117,745,440 | 3,117,745,440 | 2,927,398,409 | 3,114,124,244 | 3,114,124,244 | |||||||
| (1) In 2021Q2, the Company's shareholders approved a share split that each issued and unissued ordinary share and preferred share of the Company with a par value of US | ||||||||||||||
| Huazhu Group Limited | ||||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||
| December 31, 2020 | September 30, 2021 | December 31, 2021 | December 31,2020 | December 31, 2021 | ||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||
| ( in millions) | ||||||||||||||
| Operating activities: | ||||||||||||||
| Net income (loss) | 712 | (136 | ) | (464 | ) | (73 | ) | (2,204 | ) | (480 | ) | (75 | ) | |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||
| Share-based compensation | 22 | 31 | 15 | 2 | 122 | 109 | 17 | |||||||
| Depreciation and amortization, and other | 384 | 383 | 436 | 68 | 1,445 | 1,563 | 245 | |||||||
| Impairment loss | 138 | 51 | 320 | 50 | 709 | 380 | 60 | |||||||
| Loss (income) from equity method investments, net of dividends | 38 | 1 | 38 | 6 | 145 | 60 | 9 | |||||||
| Investment (income) loss | (881 | ) | 135 | 245 | 38 | 108 | 67 | 11 | ||||||
| Changes in operating assets and liabilities | 399 | (305 | ) | 458 | 72 | 339 | (92 | ) | (14 | ) | ||||
| Other | (508 | ) | 32 | (181 | ) | (27 | ) | (55 | ) | (265 | ) | (43 | ) | |
| Net cash provided by operating activities | 304 | 192 | 867 | 136 | 609 | 1,342 | 210 | |||||||
| Investing activities: | ||||||||||||||
| Capital expenditures | (501 | ) | (346 | ) | (469 | ) | (73 | ) | (1,776 | ) | (1,675 | ) | (263 | ) |
| Acquisitions, net of cash received | (1 | ) | (395 | ) | - | - | (5,060 | ) | (742 | ) | (116 | ) | ||
| Purchase of investments | (71 | ) | (303 | ) | (49 | ) | (8 | ) | (1,702 | ) | (521 | ) | (82 | ) |
| Proceeds from maturity/sale of investments | 12 | - | 64 | 10 | 396 | 1,494 | 235 | |||||||
| Loan advances | (15 | ) | (32 | ) | (96 | ) | (15 | ) | (145 | ) | (181 | ) | (28 | ) |
| Loan collections | 60 | 41 | 38 | 6 | 182 | 187 | 29 | |||||||
| Other | 1 | 4 | 9 | 1 | 4 | 36 | 6 | |||||||
| Net cash provided by (used in) investing activities | (515 | ) | (1,031 | ) | (503 | ) | (79 | ) | (8,101 | ) | (1,402 | ) | (219 | ) |
| Financing activities: | ||||||||||||||
| Net proceeds from issuance of ordinary shares | 774 | - | - | - | 6,019 | 1 | 0 | |||||||
| Proceeds from debt | 311 | 491 | 167 | 26 | 6,906 | 2,383 | 374 | |||||||
| Repayment of debt | (1,410 | ) | (497 | ) | (768 | ) | (120 | ) | (11,207 | ) | (4,171 | ) | (655 | ) |
| Dividend paid | - | - | - | - | (678 | ) | - | - | ||||||
| Other | (85 | ) | (11 | ) | 3 | - | (157 | ) | (14 | ) | (2 | ) | ||
| Net cash provided by (used in) financing activities | (410 | ) | (17 | ) | (598 | ) | (94 | ) | 883 | (1,801 | ) | (283 | ) | |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (189 | ) | 9 | (36 | ) | (6 | ) | (300 | ) | (88 | ) | (14 | ) | |
| Net increase (decrease) in cash, cash equivalents and restricted cash | (810 | ) | (847 | ) | (270 | ) | (43 | ) | (6,909 | ) | (1,949 | ) | (306 | ) |
| Cash, cash equivalents and restricted cash at the beginning of the period | 7,900 | 6,258 | 5,411 | 850 | 13,999 | 7,090 | 1,113 | |||||||
| Cash, cash equivalents and restricted cash at the end of the period | 7,090 | 5,411 | 5,141 | 807 | 7,090 | 5,141 | 807 | |||||||
| Huazhu Group Limited | ||||||||||||||
| Unaudited Reconciliation of GAAP and Non-GAAP Results | ||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||
| December 31, 2020 | September 30,2021 | December 31, 2021 | December 31, 2020 | December 31, 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) | 703 | (137 | ) | (459 | ) | (72 | ) | (2,192 | ) | (465 | ) | (73 | ) | |
| Share-based compensation expenses | 22 | 31 | 15 | 2 | 122 | 109 | 17 | |||||||
| Unrealized (gains) losses from fair value changes of equity securities | (733 | ) | 60 | 217 | 34 | 265 | 96 | 15 | ||||||
| Adjusted net income (loss) attributable to Huazhu Group Limited (non-GAAP) | (8 | ) | (46 | ) | (227 | ) | (36 | ) | (1,805 | ) | (260 | ) | (41 | ) |
| Adjusted earnings (losses) per share (non-GAAP)(2) | ||||||||||||||
| Basic | (0.00 | ) | (0.01 | ) | (0.07 | ) | (0.01 | ) | (0.62 | ) | (0.08 | ) | (0.01 | ) |
| Diluted | (0.00 | ) | (0.01 | ) | (0.07 | ) | (0.01 | ) | (0.62 | ) | (0.08 | ) | (0.01 | ) |
| Adjusted earnings (losses) per ADS (non-GAAP) | ||||||||||||||
| Basic | (0.02 | ) | (0.15 | ) | (0.73 | ) | (0.11 | ) | (6.16 | ) | (0.83 | ) | (0.13 | ) |
| Diluted | (0.02 | ) | (0.15 | ) | (0.73 | ) | (0.11 | ) | (6.16 | ) | (0.83 | ) | (0.13 | ) |
| Weighted average number of shares used in computation (Non-GAAP) | ||||||||||||||
| Basic | 3,097,524,615 | 3,115,104,798 | 3,117,745,440 | 3,117,745,440 | 2,927,398,409 | 3,114,124,244 | 3,114,124,244 | |||||||
| Diluted | 3,097,524,615 | 3,115,104,798 | 3,117,745,440 | 3,117,745,440 | 2,927,398,409 | 3,114,124,244 | 3,114,124,244 | |||||||
| (1) We (2) In 2021Q2, the Company's shareholders approved a share split that each issued and unissued ordinary share and preferred share of the Company with a par value of US | ||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||
| December 31, 2020 | September 30,2021 | December 31, 2021 | December 31, 2020 | December 31, 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) | 703 | (137 | ) | (459 | ) | (72 | ) | (2,192 | ) | (465 | ) | (73 | ) | |
| Interest income | (33 | ) | (25 | ) | (23 | ) | (4 | ) | (119 | ) | (89 | ) | (14 | ) |
| Interest expense | 118 | 101 | 92 | 14 | 533 | 405 | 64 | |||||||
| Income tax expense | (66 | ) | (13 | ) | 16 | 3 | (215 | ) | 12 | 2 | ||||
| Depreciation and amortization | 364 | 368 | 420 | 66 | 1,362 | 1,503 | 236 | |||||||
| EBITDA (non-GAAP) | 1,086 | 294 | 46 | 7 | (631 | ) | 1,366 | 215 | ||||||
| Share-based compensation | 22 | 31 | 15 | 2 | 122 | 109 | 17 | |||||||
| Unrealized (gains) losses from fair value changes of equity securities | (733 | ) | 60 | 217 | 34 | 265 | 96 | 15 | ||||||
| Adjusted EBITDA (non-GAAP) | 375 | 385 | 278 | 43 | (244 | ) | 1,571 | 247 | ||||||
| Huazhu Group Limited | ||||||||||||||||||||
| Segment Financial Summary(3) | ||||||||||||||||||||
| Quarter Ended December 31, 2021 | Quarter Ended December 31, 2020 | Quarter Ended September 30, 2021 | ||||||||||||||||||
| Legacy Huazhu | Legacy DH | Total | Legacy Huazhu | Legacy DH | Total | Legacy Huazhu | Legacy DH | Total | ||||||||||||
| RMB | RMB | RMB | USD | RMB | RMB | RMB | RMB | RMB | RMB | |||||||||||
| (in millions) | (in millions) | (in millions) | ||||||||||||||||||
| Leased and owned hotels | 1,565 | 528 | 2,093 | 329 | 1,790 | 234 | 2,024 | 1,784 | 561 | 2,345 | ||||||||||
| Manachised and franchised hotels | 1,073 | 25 | 1,098 | 172 | 990 | 9 | 999 | 1,110 | 18 | 1,128 | ||||||||||
| Others | 138 | 21 | 159 | 25 | 41 | 7 | 48 | 40 | 10 | 50 | ||||||||||
| Revenue | 2,776 | 574 | 3,350 | 526 | 2,821 | 250 | 3,071 | 2,934 | 589 | 3,523 | ||||||||||
| Hotel operating costs | (2,331 | ) | (866 | ) | (3,197 | ) | (501 | ) | (2,071 | ) | (677 | ) | (2,748 | ) | (2,255 | ) | (630 | ) | (2,885 | ) |
| Selling and marketing expenses | (129 | ) | (54 | ) | (183 | ) | (29 | ) | (149 | ) | (32 | ) | (181 | ) | (129 | ) | (60 | ) | (189 | ) |
| General and administrative expenses | (308 | ) | (133 | ) | (441 | ) | (70 | ) | (257 | ) | (79 | ) | (336 | ) | (306 | ) | (82 | ) | (388 | ) |
| Pre-opening expenses | (30 | ) | 0 | (30 | ) | (5 | ) | (36 | ) | 0 | (36 | ) | (15 | ) | - | (15 | ) | |||
| Income (losses) from operations | 60 | (21 | ) | 39 | 6 | 315 | (449 | ) | (134 | ) | 239 | (167 | ) | 72 | ||||||
| Net income (losses) attributable to Huazhu Group Limited | (419 | ) | (40 | ) | (459 | ) | (72 | ) | 1,010 | (307 | ) | 703 | 27 | (164 | ) | (137 | ) | |||
| Interest income | (23 | ) | 0 | (23 | ) | (4 | ) | (32 | ) | (1 | ) | (33 | ) | (25 | ) | 0 | (25 | ) | ||
| Interest expense | 64 | 28 | 92 | 14 | 87 | 31 | 118 | 72 | 29 | 101 | ||||||||||
| Income tax expense | 37 | (21 | ) | 16 | 3 | 110 | (176 | ) | (66 | ) | 29 | (42 | ) | (13 | ) | |||||
| Depreciation and amortization | 318 | 102 | 420 | 66 | 300 | 64 | 364 | 306 | 62 | 368 | ||||||||||
| EBITDA (non-GAAP) | (23 | ) | 69 | 46 | 7 | 1,475 | (389 | ) | 1,086 | 409 | (115 | ) | 294 | |||||||
| Share-based Compensation | 15 | - | 15 | 2 | 22 | - | 22 | 31 | - | 31 | ||||||||||
| Unrealized (gains) losses from fair value changes of equity securities | 217 | - | 217 | 34 | (733 | ) | - | (733 | ) | 60 | - | 60 | ||||||||
| Adjusted EBITDA (non-GAAP) | 209 | 69 | 278 | 43 | 764 | (389 | ) | 375 | 500 | (115 | ) | 385 | ||||||||
| (3) The Company presents segment information after elimination of intercompany transactions. | ||||||||||||||||||||
| Huazhu Group Limited | ||||||||||||||
| Segment Financial Summary(4) | ||||||||||||||
| Year Ended December 31, 2021 | Year Ended December 31, 2020 | |||||||||||||
| Legacy Huazhu | Legacy DH | Total | Legacy Huazhu | Legacy DH | Total | |||||||||
| RMB | RMB | RMB | USD | RMB | RMB | RMB | ||||||||
| (in millions) | (in millions) | |||||||||||||
| Leased and owned hotels | 6,674 | 1,444 | 8,118 | 1,274 | 5,439 | 1,469 | 6,908 | |||||||
| Manachised and franchised hotels | 4,342 | 56 | 4,398 | 690 | 3,093 | 43 | 3,136 | |||||||
| Others | 231 | 40 | 271 | 43 | 132 | 20 | 152 | |||||||
| Revenue | 11,247 | 1,540 | 12,787 | 2,007 | 8,664 | 1,532 | 10,196 | |||||||
| Hotel operating costs | (8,806 | ) | (2,480 | ) | (11,286 | ) | (1,771 | ) | (7,369 | ) | (2,360 | ) | (9,729 | ) |
| Selling and marketing expenses | (460 | ) | (181 | ) | (641 | ) | (101 | ) | (388 | ) | (209 | ) | (597 | ) |
| General and administrative expenses | (1,164 | ) | (383 | ) | (1,547 | ) | (242 | ) | (893 | ) | (366 | ) | (1,259 | ) |
| Pre-opening expenses | (81 | ) | 0 | (81 | ) | (13 | ) | (288 | ) | 0 | (288 | ) | ||
| Income (losses) from operations | 891 | (727 | ) | 164 | 26 | (100 | ) | (1,586 | ) | (1,686 | ) | |||
| Net income (losses) attributable to Huazhu Group Limited | 153 | (618 | ) | (465 | ) | (73 | ) | (847 | ) | (1,345 | ) | (2,192 | ) | |
| Interest income | (88 | ) | (1 | ) | (89 | ) | (14 | ) | (118 | ) | (1 | ) | (119 | ) |
| Interest expense | 291 | 114 | 405 | 64 | 427 | 106 | 533 | |||||||
| Income tax expense | 249 | (237 | ) | 12 | 2 | 151 | (366 | ) | (215 | ) | ||||
| Depreciation and amortization | 1,222 | 281 | 1,503 | 236 | 1,123 | 239 | 1,362 | |||||||
| EBITDA (non-GAAP) | 1,827 | (461 | ) | 1,366 | 215 | 736 | (1,367 | ) | (631 | ) | ||||
| Share-based Compensation | 109 | - | 109 | 17 | 122 | - | 122 | |||||||
| Unrealized (gains) losses from fair value changes of equity securities | 96 | - | 96 | 15 | 265 | - | 265 | |||||||
| Adjusted EBITDA (non-GAAP) | 2,032 | (461 | ) | 1,571 | 247 | 1,123 | (1,367 | ) | (244 | ) | ||||
| (4) The Company presents segment information after elimination of intercompany transactions. | ||||||||||||||
Operating Results: Legacy-Huazhu(1)
| Number of hotels | Number of rooms | |||||||
| Opened in Q4 2021 | Closed (2) in Q4 2021 | Net added in Q4 2021 | As of December 31, 2021 (3) | As of December 31, 2021 | ||||
| Leased and owned hotels | 7 | (8 | ) | (1 | ) | 662 | 91,284 | |
| Manachised and franchised hotels | 436 | (74 | ) | 362 | 7,044 | 636,859 | ||
| Total | 443 | (82 | ) | 361 | 7,706 | 728,143 | ||
| (1) Legacy-Huazhu refers to Huazhu 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 2021, we temporarily closed 9 hotels for brand upgrade and business model change purposes. (3) As of December 31, 2021, 147 hotels were requisitioned by governmental authorities. | ||||||||
| As of December 31, 2021 | ||
| Number of hotels | Unopened hotels in pipeline | |
| Economy hotels | 4,772 | 1,194 |
| Leased and owned hotels | 397 | 3 |
| Manachised and franchised hotels | 4,375 | 1,191 |
| Midscale and upscale hotels | 2,934 | 1,377 |
| Leased and owned hotels | 265 | 15 |
| Manachised and franchised hotels | 2,669 | 1,362 |
| Total | 7,706 | 2,571 |
| Operational hotels excluding hotels under requisition | ||||||||
| For the quarter ended | ||||||||
| December 31, | September 30, | December 31, | yoy | |||||
| 2020 | 2021 | 2021 | change | |||||
| Average daily room rate (in RMB) | ||||||||
| Leased and owned hotels | 272 | 296 | 286 | 5.1 | % | |||
| Manachised and franchised hotels | 224 | 238 | 232 | 3.9 | % | |||
| Blended | 231 | 246 | 239 | 3.7 | % | |||
| Occupancy Rate (as a percentage) | ||||||||
| Leased and owned hotels | 79.6 | % | 69.7 | % | 67.4 | % | -12.2p.p. | |
| Manachised and franchised hotels | 80.8 | % | 72.2 | % | 68.4 | % | -12.4p.p. | |
| Blended | 80.6 | % | 71.9 | % | 68.2 | % | -12.4p.p. | |
| RevPAR (in RMB) | ||||||||
| Leased and owned hotels | 217 | 206 | 193 | -11.0 | % | |||
| Manachised and franchised hotels | 181 | 172 | 159 | -12.1 | % | |||
| Blended | 186 | 177 | 163 | -12.2 | % | |||
| For the quarter ended | ||||||
| December 31, | December 31, | yoy | ||||
| 2019 | 2021 | change | ||||
| Average daily room rate (in RMB) | ||||||
| Leased and owned hotels | 277 | 286 | 3.2 | % | ||
| Manachised and franchised hotels | 223 | 232 | 4.5 | % | ||
| Blended | 232 | 239 | 3.1 | % | ||
| Occupancy Rate (as a percentage) | ||||||
| Leased and owned hotels | 84.7 | % | 67.4 | % | -17.4p.p. | |
| Manachised and franchised hotels | 81.6 | % | 68.4 | % | -13.3p.p. | |
| Blended | 82.2 | % | 68.2 | % | -13.9p.p. | |
| RevPAR (in RMB) | ||||||
| Leased and owned hotels | 235 | 193 | -17.9 | % | ||
| Manachised and franchised hotels | 182 | 159 | -12.5 | % | ||
| Blended | 191 | 163 | -14.4 | % | ||
| For the year ended | ||||||
| December 31, | December 31, | yoy | ||||
| 2020 | 2021 | change | ||||
| Average daily room rate (in RMB) | ||||||
| Leased and owned hotels | 241 | 286 | 18.7 | % | ||
| Manachised and franchised hotels | 204 | 232 | 13.3 | % | ||
| Blended | 210 | 239 | 13.8 | % | ||
| Occupancy Rate (as a percentage) | ||||||
| Leased and owned hotels | 68.9 | % | 70.6 | % | +1.7 p.p. | |
| Manachised and franchised hotels | 71.4 | % | 72.4 | % | +1.0 p.p. | |
| Blended | 71.0 | % | 72.2 | % | +1.2 p.p. | |
| RevPAR (in RMB) | ||||||
| Leased and owned hotels | 166 | 202 | 21.7 | % | ||
| Manachised and franchised hotels | 146 | 168 | 14.9 | % | ||
| Blended | 149 | 172 | 15.6 | % | ||
| For the year ended | ||||||
| December 31, | December 31, | yoy | ||||
| 2019 | 2021 | change | ||||
| Average daily room rate (in RMB) | ||||||
| Leased and owned hotels | 276 | 286 | 3.5 | % | ||
| Manachised and franchised hotels | 224 | 232 | 3.2 | % | ||
| Blended | 234 | 239 | 2.0 | % | ||
| Occupancy Rate (as a percentage) | ||||||
| Leased and owned hotels | 87.0 | % | 70.6 | % | -16.3p.p. | |
| Manachised and franchised hotels | 83.8 | % | 72.4 | % | -11.4p.p. | |
| Blended | 84.4 | % | 72.2 | % | -12.2p.p. | |
| RevPAR (in RMB) | ||||||
| Leased and owned hotels | 240 | 202 | -15.9 | % | ||
| Manachised and franchised hotels | 188 | 168 | -10.8 | % | ||
| Blended | 198 | 172 | -12.7 | % | ||
| 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 | ||||||||||
| 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | (p.p.) | |||||||
| Economy hotels | 3,341 | 3,341 | 152 | 128 | -15.6 | % | 179 | 180 | 0.8 | % | 85.2 | % | 71.4 | % | -13.8 |
| Leased and owned hotels | 388 | 388 | 170 | 146 | -14.1 | % | 201 | 204 | 1.1 | % | 84.6 | % | 71.9 | % | -12.7 |
| Manachised and franchised hotels | 2,953 | 2,953 | 149 | 125 | -15.9 | % | 174 | 175 | 0.6 | % | 85.3 | % | 71.3 | % | -14.0 |
| Midscale and upscale hotels | 1,734 | 1,734 | 247 | 208 | -15.7 | % | 314 | 312 | -0.5 | % | 78.7 | % | 66.7 | % | -12.0 |
| Leased and owned hotels | 222 | 222 | 280 | 238 | -15.1 | % | 378 | 378 | 0.2 | % | 74.2 | % | 62.8 | % | -11.4 |
| Manachised and franchised hotels | 1,512 | 1,512 | 240 | 202 | -15.9 | % | 301 | 299 | -0.8 | % | 79.7 | % | 67.6 | % | -12.1 |
| Total | 5,075 | 5,075 | 192 | 162 | -15.6 | % | 232 | 233 | 0.3 | % | 82.5 | % | 69.4 | % | -13.1 |
| 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 | 2021 | 2019 | 2021 | 2019 | 2021 | 2019 | 2021 | (p.p.) | |||||||
| Economy hotels | 2,442 | 2,442 | 163 | 130 | -20.1 | % | 186 | 181 | -2.8 | % | 87.9 | % | 72.2 | % | -15.7 |
| Leased and owned hotels | 380 | 380 | 185 | 145 | -21.8 | % | 211 | 202 | -4.4 | % | 87.7 | % | 71.7 | % | -16.0 |
| Manachised and franchised hotels | 2,062 | 2,062 | 158 | 127 | -19.7 | % | 179 | 175 | -2.4 | % | 87.9 | % | 72.3 | % | -15.6 |
| Midscale and upscale hotels | 1,160 | 1,160 | 269 | 206 | -23.5 | % | 325 | 313 | -3.7 | % | 82.9 | % | 65.9 | % | -17.0 |
| Leased and owned hotels | 187 | 187 | 329 | 229 | -30.6 | % | 394 | 369 | -6.5 | % | 83.5 | % | 62.0 | % | -21.5 |
| Manachised and franchised hotels | 973 | 973 | 253 | 200 | -21.0 | % | 305 | 298 | -2.4 | % | 82.7 | % | 66.9 | % | -15.8 |
| Total | 3,602 | 3,602 | 204 | 160 | -21.7 | % | 237 | 229 | -3.5 | % | 86.0 | % | 69.7 | % | -16.2 |
| 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 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 | ||||||||||
| 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | 2020 | 2021 | (p.p.) | |||||||
| Economy hotels | 3,341 | 3,341 | 125 | 138 | 10.8 | % | 164 | 182 | 10.8 | % | 75.8 | % | 75.8 | % | +0.0 |
| Leased and owned hotels | 388 | 388 | 131 | 153 | 17.3 | % | 179 | 206 | 15.0 | % | 73.0 | % | 74.5 | % | +1.5 |
| Manachised and franchised hotels | 2,953 | 2,953 | 123 | 135 | 9.3 | % | 161 | 177 | 9.7 | % | 76.4 | % | 76.1 | % | -0.3 |
| Midscale and upscale hotels | 1,734 | 1,734 | 202 | 221 | 9.3 | % | 289 | 315 | 8.8 | % | 69.8 | % | 70.1 | % | +0.3 |
| Leased and owned hotels | 222 | 222 | 219 | 250 | 14.2 | % | 338 | 378 | 11.7 | % | 64.8 | % | 66.2 | % | +1.4 |
| Manachised and franchised hotels | 1,512 | 1,512 | 198 | 214 | 8.1 | % | 279 | 301 | 8.0 | % | 70.9 | % | 71.0 | % | +0.1 |
| Total | 5,075 | 5,075 | 156 | 172 | 10.2 | % | 213 | 234 | 10.0 | % | 73.3 | % | 73.5 | % | +0.1 |
| 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 | 2021 | 2019 | 2021 | 2019 | 2021 | 2019 | 2021 | (p.p.) | |||||||
| Economy hotels | 2,442 | 2,442 | 172 | 138 | -19.8 | % | 190 | 182 | -4.7 | % | 90.2 | % | 75.9 | % | -14.3 |
| Leased and owned hotels | 380 | 380 | 193 | 151 | -21.6 | % | 213 | 203 | -4.4 | % | 90.7 | % | 74.4 | % | -16.3 |
| Manachised and franchised hotels | 2,062 | 2,062 | 166 | 134 | -19.3 | % | 185 | 176 | -4.7 | % | 90.1 | % | 76.3 | % | -13.7 |
| Midscale and upscale hotels | 1,160 | 1,160 | 275 | 218 | -20.8 | % | 331 | 315 | -4.8 | % | 83.0 | % | 69.0 | % | -14.0 |
| Leased and owned hotels | 187 | 187 | 335 | 244 | -26.9 | % | 398 | 371 | -6.8 | % | 84.1 | % | 65.9 | % | -18.2 |
| Manachised and franchised hotels | 973 | 973 | 256 | 209 | -18.4 | % | 310 | 299 | -3.6 | % | 82.7 | % | 70.0 | % | -12.7 |
| Total | 3,602 | 3,602 | 209 | 167 | -20.1 | % | 238 | 227 | -4.7 | % | 87.6 | % | 73.4 | % | -14.2 |
Operating Results: Legacy-DH(4)
| Number of hotels | Number of rooms | Unopened hotels in pipeline | |||||||
| Opened in Q4 2021 | Closed in Q4 2021 | Net added in Q4 2021 | As of December 31, 2021(5) | | As of December 31,2021 | | As of December 31,2021 | ||
| Leased hotels | 1 | - | 1 | 76 | 14,264 | 28 | |||
| Manachised and franchised hotels | 3 | (1 | ) | 2 | 48 | 10,809 | 9 | ||
| Total | 4 | (1 | ) | 3 | 124 | 25,073 | 37 | ||
| (4) Legacy-DH refers to DH. (5) As of December 31, 2021, a total of 4 hotels were temporarily closed. 1 hotel was closed for renovation and 1 hotel was closed due to flood damage. Additionally, 1 hotel was in winter break and 1 hotel was temporarily closed due to low demand. | |||||||||
| For the quarter ended | ||||||||
| December 31, | September 30, | December 31, | yoy | |||||
| 2020 | 2021 | 2021 | change | |||||
| Average daily room rate (in EUR) | ||||||||
| Leased hotels | 78 | 94 | 95 | 21.6 | % | |||
| Manachised and franchised hotels | 73 | 104 | 93 | 26.6 | % | |||
| Blended | 76 | 99 | 94 | 23.5 | % | |||
| Occupancy rate (as a percentage) | ||||||||
| Leased hotels | 20.9 | % | 48.0 | % | 42.8 | % | +22.0 p.p. | |
| Managed and franchised hotels | 25.4 | % | 49.4 | % | 50.7 | % | +25.3 p.p. | |
| Blended | 22.5 | % | 48.6 | % | 46.1 | % | +23.6 p.p. | |
| RevPAR (in EUR) | ||||||||
| Leased hotels | 16 | 45 | 41 | 149.6 | % | |||
| Managed and franchised hotels | 19 | 52 | 47 | 152.7 | % | |||
| Blended | 17 | 48 | 43 | 152.6 | % | |||
| For the year ended | ||||||
| December 31, | December 31, | yoy | ||||
| 2020 | 2021 | change | ||||
| Average daily room rate (in EUR) | ||||||
| Leased and owned hotels | 89 | 91 | 2.2 | % | ||
| Manachised and franchised hotels | 85 | 89 | 4.8 | % | ||
| Blended | 88 | 90 | 3.0 | % | ||
| Occupancy rate (as a percentage) | ||||||
| Leased and owned hotels | 33.9 | % | 31.6 | % | -2.3 p.p. | |
| Manachised and franchised hotels | 36.3 | % | 40.5 | % | +4.2 p.p. | |
| Blended | 34.8 | % | 35.2 | % | +0.3 p.p. | |
| RevPAR (in EUR) | ||||||
| Leased and owned hotels | 30 | 29 | -4.6 | % | ||
| Manachised and franchised hotels | 31 | 36 | 16.8 | % | ||
| Blended | 31 | 32 | 4.0 | % | ||
Hotel Portfolio by Brand
| As of December 31, 2021 | |||
| Hotels | Rooms | Unopened hotels | |
| in operation | in pipeline | ||
| Economy hotels | 4,786 | 387,895 | 1,206 |
| HanTing Hotel | 3,027 | 274,118 | 696 |
| Hi Inn | 443 | 24,674 | 117 |
| Elan Hotel(6) | 1,083 | 64,606 | 353 |
| Ibis Hotel | 219 | 22,834 | 28 |
| Zleep Hotels | 14 | 1,663 | 12 |
| Midscale hotels | 2,450 | 271,421 | 1,072 |
| Ibis Styles Hotel | 79 | 8,404 | 21 |
| Starway Hotel | 528 | 44,016 | 252 |
| JI Hotel | 1,381 | 166,836 | 575 |
| Orange Hotel | 432 | 47,393 | 217 |
| CitiGO Hotel | 30 | 4,772 | 7 |
| Upper midscale hotels | 454 | 67,068 | 264 |
| Crystal Orange Hotel | 144 | 19,190 | 58 |
| Manxin Hotel | 84 | 8,273 | 62 |
| Madison Hotel | 37 | 5,490 | 56 |
| Mercure Hotel | 125 | 21,217 | 50 |
| Novotel Hotel | 15 | 4,032 | 13 |
| IntercityHotel(7) | 49 | 8,866 | 25 |
| Upscale hotels | 125 | 23,056 | 61 |
| Jaz in the City | 3 | 587 | 1 |
| Joya Hotel | 9 | 1,760 | 0 |
| Blossom House | 34 | 1,658 | 39 |
| Grand Mercure Hotel | 7 | 1,485 | 3 |
| Steigenberger Hotels & Resorts(8) | 65 | 16,389 | 12 |
| MAXX (9) | 7 | 1,177 | 6 |
| Others | 15 | 3,776 | 5 |
| Other hotels(10) | 15 | 3,776 | 5 |
| Total | 7,830 | 753,216 | 2,608 |
(6) As of December 31, 2021, 70 Ni Hao Hotels were included in the operational hotel for Elan Hotels and 163 Ni Hao Hotels were included in the pipeline for Elan Hotels.
(7) As of December 31, 2021, 2 operational hotels and 8 pipeline hotels of IntercityHotel were in China.
(8) As of December 31, 2021, 14 operational hotels and 6 pipeline hotels of Steigenberger Hotels & Resorts were in China.
(9) As of December 31, 2021, 2 operational hotels and 5 pipeline hotels of MAXX were in China.
(10) 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$”) is based on the exchange rate of US
3 The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US
Contact Information
Investor Relations
Tel: +86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com
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