- A total of 8,543 hotels or 809,478 hotel rooms in operation as of December 31, 2022.
- Hotel turnover1 increased 10.5% year-over-year to RMB13.1 billion in the fourth quarter of 2022, and increased 9.3% year-over-year to RMB49.6 billion for the full year of 2022. Excluding Steigenberger Hotels GmbH and its subsidiaries (“DH”, or “Legacy-DH”), hotel turnover increased 5.3% year-over-year in the fourth quarter of 2022 and increased 3.5% year-over-year for the full year of 2022.
- Revenue increased 10.7% year-over-year to RMB3.7 billion (US$537 million)2 in the fourth quarter of 2022, in line with the revenue guidance previously announced of a 7% to 11% increase compared to the fourth quarter of 2021, and increased 8.4% year-over-year to RMB13.9 billion (US$2.0 billion) for the full year of 2022. Revenue from the Legacy-Huazhu segment in the fourth quarter of 2022 decreased 0.7% year-over-year, better than revenue guidance previously announced of a 1% to 5% decrease.
- Net loss attributable to H World Group Limited was RMB124 million (US$19 million) in the fourth quarter of 2022, compared with RMB459 million in the fourth quarter of 2021 and RMB717 million in the previous quarter. Net loss attributable to H World Group Limited was RMB1.8 billion (US$264 million) for the full year of 2022, compared with RMB465 million for the full year of 2021. Net loss attributable to H World Group Limited from the Legacy-Huazhu segment was RMB84 million in the fourth quarter of 2022, compared with net loss attributable to H World Group Limited from the Legacy-Huazhu segment of RMB419 million in the fourth quarter of 2021 and net loss attributable to H World Group Limited from the Legacy-Huazhu segment of RMB731 million in the previous quarter. Net loss attributable to H World Group Limited from Legacy-Huazhu segment was RMB1.4 billion for the full year of 2022, compared with net income attributable to H World Group Limited from Legacy-Huazhu segment of RMB153 million for the full year of 2021.
- EBITDA (non-GAAP) in the fourth quarter of 2022 was RMB529 million (US$76 million), compared with RMB46 million in the fourth quarter of 2021 and RMB149 million in the previous quarter. EBITDA (non-GAAP) for the full year of 2022 was RMB164 million (US$23 million), compared with RMB1.4 billion for the full year of 2021. EBITDA from the Legacy-Huazhu segment, which is a segment measure, was RMB528 million in the fourth quarter of 2022, compared with a negative RMB23 million in the fourth quarter of 2021 and RMB55 million in the previous quarter. EBITDA from Legacy-Huazhu segment was RMB282 million for the full year of 2022, compared with RMB1.8 billion for the full year of 2021.
- Adjusted EBITDA (non-GAAP), which excluded share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities from EBITDA (non-GAAP), was RMB398 million (US$57 million) in the fourth quarter of 2022, compared with RMB278 million in the fourth quarter of 2021 and RMB491 million in the previous quarter. Adjusted EBITDA (non-GAAP) for the full year of 2022 was RMB610 million (US$88 million), compared with RMB1.6 billion for the full year of 2021. Adjusted EBITDA from the Legacy-Huazhu segment (non-GAAP) was RMB397 million in the fourth quarter of 2022, compared with RMB209 million in the fourth quarter of 2021 and RMB397 million in the previous quarter. Adjusted EBITDA (non-GAAP) from the Legacy-Huazhu segment was RMB728 million for the full year of 2022, compared with RMB2.0 billion for the full year of 2021.
- In the first quarter of 2023, H World expects its revenue growth to be in the range of 61%-65% compared to the first quarter of 2022, or in the range of 53%-57% excluding DH. For the full year of 2023, H World expects revenue growth to be in the range of 42%-46% compared to the full year of 2022, or in the range of 46%-50% excluding DH.
H World Group Limited (NASDAQ: HTHT and HKEX: 1179) today announced its unaudited financial results in the fourth quarter and full year ended December 31, 2022.
As of December 31, 2022, H World’s worldwide hotel network in operation totaled 8,543 hotels and 809,478 rooms, including 132 hotels from DH. During the fourth quarter of 2022, our Legacy-Huazhu business opened 244 hotels, including 5 leased and owned hotels and 239 manachised and franchised hotels, and closed a total of 109 hotels, including 13 leased and owned hotels and 96 manachised and franchised hotels. During the fourth quarter of 2022, the Legacy-DH business opened 6 hotels, including 2 leased hotels and 4 manachised and franchised hotels. As of December 31, 2022, H World had a total of 2,580 unopened hotels in our pipeline, including 2,544 hotels from the Legacy-Huazhu business and 36 hotels from the Legacy-DH business.
Legacy-Huazhu Only – Fourth Quarter and Full Year of 2022 Operational Highlights
As of December 31, 2022, Legacy-Huazhu had 8,411 hotels in operation, including 623 leased and owned hotels, and 7,788 manachised and franchised hotels. In addition, as of the same date, Legacy-Huazhu had 783,174 hotel rooms in operation, including 89,638 rooms under the lease and ownership model, and 693,536 rooms under the manachise and franchise models. Legacy-Huazhu also had 2,544 unopened hotels in its pipeline, including 14 leased and owned hotels, and 2,530 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 RMB240 in the fourth quarter of 2022, compared with RMB239 in the fourth quarter of 2021, RMB254 in the previous quarter, and RMB232 in the fourth quarter of 2019.
- The occupancy rate for all the Legacy-Huazhu hotels in operation was 66.2% in the fourth quarter of 2022, compared with 68.2% in the fourth quarter of 2021, 76.0% in the previous quarter, and 82.2% in the fourth quarter of 2019.
- Blended RevPAR was RMB159 in the fourth quarter of 2022, compared with RMB163 in the fourth quarter of 2021, RMB193 in the previous quarter, and RMB191 in the fourth quarter of 2019.
- For all the Legacy-Huazhu hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB158 in the fourth quarter of 2022, representing a 9.2% decrease from RMB174 in the fourth quarter of 2021, with a 2.0% decrease in ADR and a 5.3-percentage-point decrease in occupancy rate; comparing the fourth quarter of 2022 with the pre-COVID fourth quarter of 2019, same-hotel RevPAR represented a 28.0% decrease from RMB209 in the fourth quarter of 2019, with a 5.8% decrease in ADR, and a 20.4-percentage-point decrease in occupancy rate.
Legacy-DH Only – Fourth Quarter and Full Year of 2022 Operational Highlights
As of December 31, 2022, Legacy-DH had 132 hotels in operation, including 81 leased and owned hotels and 51 manachised and franchised hotels. In addition, as of the same date, Legacy-DH had 26,304 hotel rooms in operation, including 15,328 rooms under the lease and ownership model, and 10,976 rooms under the manachise and franchise models. Legacy-DH also had unopened 36 hotels in our pipeline, including 26 leased and owned hotels and 10 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 EUR122 in the fourth quarter of 2022, compared with EUR94 in the fourth quarter of 2021 and EUR114 in the previous quarter.
- The occupancy rate for all Legacy-DH hotels in operation was 59.3% in the fourth quarter of 2022, compared with 46.1% in the fourth quarter of 2021 and 66.1% in the previous quarter.
- Blended RevPAR was EUR72 in the fourth quarter of 2022, compared with EUR43 in the fourth quarter of 2021 and EUR75 in the previous quarter.
Jin Hui, CEO of H World commented: “We are very glad to see the strong resilience that our company has shown over the past years despite the tremendous difficulties and challenges brought by COVID. Also, we extend a hearty thanks to our customers, franchisees, employees and business partners who have helped and supported us to get through this tough period together. Now entering the post-COVID era, we will ‘stay the course’ with our “Sustainable Quality Growth” Strategy comprising three areas of key strategic focus. Firstly, we will continue the quality expansion of our hotel network, especially in the less-penetrated areas. Secondly, we will further develop our midscale and upper-midscale segments through our multiple-brand strategy. Lastly, we will further strengthen our operational capabilities to achieve higher efficiency, and provide better products and services to our customers as well as franchisees.”
“Moving to our business outside China, we are also happy to see our Legacy-DH business well on recovery trajectory. For the year of 2023, margin improvement will still be a top priority for Legacy-DH. Moreover, loyalty program, direct sales channel development, as well as further digitalization will also be our key areas of focus in 2023.”
Fourth Quarter and Full Year of 2022 Unaudited Financial Results
(RMB in millions) | Q4 2021 | Q3 2022 | Q4 2022 | 2021FY | 2022FY |
| Revenue: | |||||
| Leased and owned hotels | 2,093 | 2,695 | 2,450 | 8,118 | 9,148 |
| Manachised and franchised hotels | 1,103 | 1,313 | 1,158 | 4,404 | 4,405 |
| Others | 152 | 85 | 98 | 263 | 309 |
| Total revenue | 3,348 | 4,093 | 3,706 | 12,785 | 13,862 |
Revenue
Revenue for the full year of 2022 was RMB13.9 billion (US$2.0 billion), representing an increase of 8.4% from the full year of 2021. Revenue from Legacy-Huazhu segment for the full year of 2022 was RMB10.7 billion, representing a 5.3% year-over-year decrease. For the full year of 2022, Legacy-Huazhu waived franchisee’s management fee payment of approximately RMB300 million. Revenue from the Legacy-DH segment for the full year of 2022 was RMB3.2 billion, representing a 108.5% year-over-year increase.
Revenue from leased and owned hotels in the fourth quarter of 2022 was RMB2.5 billion (US$355 million), representing a 17.1% year-over-year increase and a 9.1% sequential decrease. Revenue from leased and owned hotels from the Legacy-Huazhu segment in the fourth quarter of 2022 was RMB1.5 billion, representing a 1.8% year-over-year decrease. It was mainly due to hotel closures. Revenue from leased and owned hotels from the Legacy-DH segment in the fourth quarter of 2022 was RMB913 million, representing a 72.9% year-over-year increase.
For the full year of 2022, revenue from leased and owned hotels was RMB9.1 billion (US$1.3 billion), representing an increase of 12.7% from the full year of 2021. Revenue from leased and owned hotels from Legacy-Huazhu segment for the full year of 2022 was RMB6.1 billion, representing a 9.2% year-over-year decrease. Revenue from leased and owned hotels from Legacy-DH segment for the full year of 2022 was RMB3.1 billion, representing a 113.7% year-over-year increase.
Revenue from manachised and franchised hotels in the fourth quarter of 2022 was RMB1.2 billion (US$168 million), representing a 5.0% year-over-year increase and a 11.8% sequential decrease. Revenue from our Legacy-Huazhu segment from manachised and franchised hotels in the fourth quarter of 2022 was RMB1.1 billion, representing a 5.3% year-over-year increase. It was mainly driven by network expansion. Revenue from manachised and franchised hotels from the Legacy-DH segment in the fourth quarter of 2022 was RMB28 million, representing a 6.7% year-over-year decrease.
For the full year of 2022, revenue from manachised and franchised hotels was RMB4.4 billion (US$639 million), representing an increase of 0.0% from the full year of 2021. Revenue from manachised and franchised hotels from Legacy-Huazhu segment for the full year of 2022 was RMB4.3 billion, representing a 0.4% year-over-year decrease. Revenue from manachised and franchised hotels from Legacy-DH segment for the full year of 2022 was RMB81 million, representing a 30.6% year-over-year increase.
Other revenue represents revenue generated from businesses other than our hotel operations, which mainly includes revenue from the provision of IT products and services and Huazhu Mall™ and other revenue from the Legacy-DH segment, totaling RMB98 million (US$14 million) in the fourth quarter of 2022, compared to RMB152 million in the fourth quarter of 2021 and RMB85 million in the previous quarter.
For the full year of 2022, other revenue was RMB309 million (US$45 million), compared with RMB263 million for the full year of 2021.
| (RMB in millions) | Q4 2021 | Q3 2022 | Q4 2022 | 2021FY | 2022FY | |||||
| Operating costs and expenses: | ||||||||||
| Hotel operating costs | (3,194 | ) | (3,045 | ) | (3,430 | ) | (11,282 | ) | (12,260 | ) |
| Other operating costs | (19 | ) | (13 | ) | (22 | ) | (58 | ) | (62 | ) |
| Selling and marketing expenses | (183 | ) | (181 | ) | (169 | ) | (641 | ) | (613 | ) |
| General and administrative expenses | (438 | ) | (405 | ) | (440 | ) | (1,545 | ) | (1,675 | ) |
| Pre-opening expenses | (30 | ) | (25 | ) | (14 | ) | (81 | ) | (95 | ) |
| Total operating costs and expenses | (3,864 | ) | (3,669 | ) | (4,075 | ) | (13,607 | ) | (14,705 | ) |
Hotel operating costs
For the full year of 2022, hotel operating costs were RMB12.3 billion (US$1.8 billion), compared to RMB11.3 billion in 2021. Hotel operating costs from Legacy-Huazhu segment for the full year of 2022 were RMB9.2 billion, which represented 86.1% of revenue, compared to RMB8.8 billion or 78.3% of revenue in 2021. In full year of 2022, Legacy-Huazhu conducted cost control measures and achieved rental reductions totaling approximately RMB300 million.
Selling and marketing expenses in the fourth quarter of 2022 were RMB169 million (US$25 million), compared to RMB183 million in the fourth quarter of 2021 and RMB181 million in the previous quarter. Selling and marketing expenses from the Legacy-Huazhu segment in the fourth quarter of 2022 were RMB88 million, which represented 3.2% of the quarter’s revenue, compared to RMB129 million or 4.6% of revenue in the fourth quarter in 2021, and RMB105 million or 3.3% of revenue for the previous quarter.
For the full year of 2022, selling and marketing expenses were RMB613 million (US$89 million), compared to RMB641 million in 2021. Selling and marketing expenses from Legacy-Huazhu segment for the full year of 2022 were RMB336 million, which represented 3.2% of revenue, compared to RMB460 million or 4.1% of revenue for the full year of 2021.
General and administrative expenses in the fourth quarter of 2022 were RMB440 million (US$64 million), compared to RMB438 million in the fourth quarter of 2021 and RMB405 million in the previous quarter. General and administrative expenses from the Legacy-Huazhu segment in the fourth quarter of 2022 were RMB320 million, which represented 11.6% of the quarter’s revenue, compared to RMB308 million or 11.1% in the fourth quarter in 2021 and RMB330 million or 10.4% for the previous quarter.
For the full year of 2022, general and administrative expenses were RMB1.7 billion (US$243 million), compared to RMB1.5 billion in 2021. General and administrative expenses from Legacy-Huazhu segment for the full year of 2022 were RMB1.3 billion, which represented 11.8% of revenue, compared to RMB1.2 billion or 10.3% of revenue for the full year of 2021.
Pre-opening expenses in the fourth quarter of 2022 were primarily related to the Legacy-Huazhu segment and totaled RMB14 million (US$2 million), compared to RMB30 million in the fourth quarter of 2021 and RMB25 million in the previous quarter.
Pre-opening expenses for the full year of 2022 were RMB95 million (US$14 million), compared to RMB81 million in 2021, representing a year-over-year increase of 17.3%. Pre-opening expenses as a percentage of revenue were 0.7% in 2022, compared to 0.6% in 2021.
Other operating income, net in the fourth quarter of 2022 was RMB276 million (US$40 million), compared to RMB555 million in the fourth quarter of 2021 and RMB76 million in the previous quarter.
Other operating income, net for the full year of 2022 was RMB549 million (US$79 million), compared to RMB986 million in 2021. The year-over-year decrease was mainly attributable to a decrease in COVID-19 subsidy income in our DH business.
Losses from operations in the fourth quarter of 2022 was RMB93 million (US$13 million), compared to income from operations of RMB39 million in the fourth quarter of 2021 and income from operations of RMB500 million in the previous quarter. Losses from operations from the Legacy-Huazhu segment in the fourth quarter of 2022 was RMB3 million, compared to income from operations of RMB60 million in the fourth quarter of 2021 and RMB449 million in the previous quarter. Losses from operations from the Legacy-DH segment in the fourth quarter of 2022 were RMB90 million, compared to losses from operations of RMB21 million in the fourth quarter of 2021 and income from operations of RMB51 million in the previous quarter.
Losses from operations for the full year of 2022 were RMB294 million (US$43 million). Income from operations from Legacy-Huazhu segment for the full year of 2022 was RMB51 million, compared to RMB891 million in 2021.
Operating margin, defined as income from operations as a percentage of revenues, in the fourth quarter of 2022 was a negative 2.5%, compared with 1.2% in the fourth quarter of 2021 and 12.2% for the previous quarter. Operating margin from the Legacy-Huazhu segment in the fourth quarter of 2022 was negative 0.1%, compared with 2.2% in the fourth quarter of 2021 and 14.2% in the previous quarter.
Operating margin for the full year of 2022 was negative 2.1%. Operating margin from Legacy-Huazhu segment for the full year of 2022 was 0.5%, compared with 7.9% in 2021.
Other expense, net in the fourth quarter of 2022 was RMB65 million (US$9 million), compared to RMB47 million in the fourth quarter of 2021 and RMB14 million for the previous quarter.
Other income, net for the full year of 2022 was RMB10 million (US$1 million), compared to RMB157 million in 2021.
Unrealized gains from fair value changes of equity securities in the fourth quarter of 2022 were RMB140 million (US$20 million), compared to unrealized losses from fair value changes of equity securities of RMB217 million in the fourth quarter of 2021, and unrealized losses from fair value changes of RMB313 million in the previous quarter. Unrealized gains (losses) from fair value changes of equity securities mainly represent the unrealized gains (losses) from our investment in equity securities with readily determinable fair values, such as AccorHotels.
For the full year of 2022, unrealized losses from fair value changes of equity securities were RMB359 million (US$52 million), compared to unrealized losses from fair value changes of equity securities of RMB96 million in 2021.
Income tax expense in the fourth quarter of 2022 was RMB203 million (US$30 million), compared to RMB16 million in the fourth quarter of 2021 and RMB434 million in the previous quarter. For the full year of 2022, income tax expense was RMB207 million (US$30 million), compared to RMB12 million in 2021.
Net loss attributable to H World Group Limited in the fourth quarter of 2022 was RMB124 million (US$19 million), compared to RMB459 million in the fourth quarter of 2021 and RMB717 million in the previous quarter. Net loss attributable to H World Group Limited from the Legacy-Huazhu segment in the fourth quarter of 2022 was RMB84 million, compared to a net loss attributable to H World Group Limited from the Legacy-Huazhu segment of RMB419 million in the fourth quarter of 2021 and a net loss attributable to H World Group Limited from the Legacy-Huazhu segment of RMB731 million in the previous quarter.
Net loss attributable to H World Group Limited for the full year of 2022 was RMB1.8 billion (US$264 million), compared to RMB465 million in 2021.
Basic and diluted losses per share/American depositary share (ADS). In the fourth quarter of 2022, basic and diluted losses per share were RMB0.04 (US$0.01). Adjusted basic and diluted losses per share (non-GAAP), which excluded share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities from basic and diluted losses per share, were RMB0.08 (US$0.01). Basic and diluted losses per ADS were RMB0.40 (US$0.06). Adjusted basic and diluted losses per ADS (non-GAAP), which excluded share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities, were RMB0.82 (US$0.12).
For the full year of 2022, basic and diluted losses per share were RMB0.59 (US$0.08). Adjusted basic and diluted losses per share (non-GAAP) were RMB0.44 (US$0.06). Basic and diluted losses per ADS were RMB5.85 (US$0.85). Adjusted basic and diluted losses per ADS (non-GAAP) were RMB4.42 (US$0.64).
EBITDA (non-GAAP) in the fourth quarter of 2022 was RMB529 million (US$76 million), compared with RMB46 million in the fourth quarter of 2021 and RMB149 million in the previous quarter. EBITDA from the Legacy-Huazhu segment in the fourth quarter of 2022 was RMB528 million, compared with a negative RMB23 million in the fourth quarter of 2021 and RMB55 million in the previous quarter. Adjusted EBITDA (non-GAAP), which excluded share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities, in the fourth quarter of 2022 was RMB398 million (US$57 million), compared with RMB278 million in the fourth quarter of 2021 and RMB491 million in the previous quarter. The adjusted EBITDA from the Legacy-Huazhu segment (non-GAAP) in the fourth quarter of 2022 was RMB397 million, compared with RMB209 million in the fourth quarter of 2021 and RMB397 million in the previous quarter.
EBITDA (non-GAAP) for the full year of 2022 was RMB164 million (US$23 million), compared with RMB1.4 billion in 2021. EBITDA from Legacy-Huazhu segment for the full year of 2022 was RMB282 million, compared with RMB1.8 billion in 2021. Excluding share-based compensation expenses and unrealized gains (losses) from fair value changes of equity securities, adjusted EBITDA (non-GAAP) for the full year of 2022 was RMB610 million (US$88 million). The adjusted EBITDA (non-GAAP) from the Legacy-Huazhu segment for the full year of 2022 was RMB728 million, compared with RMB2.0 billion in 2021.
Cash flow. Operating cash inflow in the fourth quarter of 2022 was RMB1.0 billion (US$151 million). Investing cash inflow in the fourth quarter of 2022 was RMB149 million (US$22 million). Financing cash outflow in the fourth quarter of 2022 was RMB1.4 billion (US$203 million).
Operating cash inflow for the full year of 2022 was RMB1.6 billion (US$227 million), representing an increase of 16.5% from 2021. Investing cash outflow for the full year of 2022 was RMB522 million (US$76 million), compared to RMB1.4 billion in 2021. Financing cash outflow for the full year of 2022 was RMB1.4 billion (US$201 million), compared to RMB1.8 billion in 2021.
Cash and cash equivalents and Restricted cash. As of December 31, 2022, the Company had a total balance of cash and cash equivalents of RMB3.6 billion (US$520 million) and restricted cash of RMB1.5 billion (US$218 million). In January 2023, we successfully completed a public offering of approximately US$300 million ADSs. In March 2023, we liquidated all of the Company’s holdings of Accor’s share for net proceeds to the Company of approximately EUR300 million.
Debt financing. As of December 31, 2022, the Company had a total debt and net debt balance of RMB9.9 billion (US$1.4 billion) and RMB4.8 billion, respectively, and the unutilized credit facility available to the Company was RMB2.1 billion.
COVID update
For our Legacy-Huazhu business, our RevPAR in the fourth quarter of 2022 recovered to approximately 83% of the 2019 level. The recovery was accelerated after the Chinese government announced the reopening policy in mid-November. Breaking RevPAR down by month, our October, November and December 2022 RevPAR recovered to 74%, 87% and 91% of their respective 2019 levels.
Legacy-DH experienced a seasonal slowdown of RevPAR recovery in the fourth quarter of 2022. Blended RevPAR recovered to 110% of the 2019 levels in the fourth quarter of 2022, primarily driven by the recovery of Steigenberger hotels in Qatar and Egypt. Excluding the positive effects of the FIFA World Cup and the COP27 UN Climate Conference, RevPAR recovered to 100% of the 2019 level. RevPAR recovery continued to be driven primarily by ADR increases, while occupancy levels still remained below the 2019 level. The gradual alleviation of energy-related risks reduced the price of energy in Europe. However, inflation continues to increase our operating costs. We will do our best to tackle the challenges brought by the rising costs through further ADR increases as well as an ongoing focus on cost reduction, process optimization and stringent cash management.
Guidance
H World expects to open around 1,400 hotels and close 600-650 hotels in 2023.
In the first quarter of 2023, H World expects its revenue growth to be in the range of 61%-65% as compared to the first quarter of 2022, or in the range of 53%-57% excluding DH.
For the full year of 2023, H World expects its revenue growth to be in the range of 42%-46% as compared to the full year of 2022, or to range from 46% to 50% excluding DH.
The above forecast reflects the Company’s current and preliminary view, which is subject to change.
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 Group Limited | |||||||||
| Unaudited Condensed Consolidated Balance Sheets | |||||||||
| December 31, 2021 | December 31, 2022 | ||||||||
| RMB | RMB | US$3 | |||||||
| (in millions) | |||||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | 5,116 | 3,583 | 520 | ||||||
| Restricted cash | 25 | 1,503 | 218 | ||||||
| Short-term investments | 2,589 | 1,788 | 259 | ||||||
| Accounts receivable, net | 521 | 1,113 | 161 | ||||||
| Loan receivables, net | 218 | 134 | 19 | ||||||
| Amounts due from related parties, current | 149 | 178 | 26 | ||||||
| Inventories | 88 | 70 | 10 | ||||||
| Other current assets, net | 847 | 809 | 117 | ||||||
| Total current assets | 9,553 | 9,178 | 1,330 | ||||||
| Property and equipment, net | 7,056 | 6,784 | 984 | ||||||
| Intangible assets, net | 5,385 | 5,278 | 765 | ||||||
| Operating lease right-of-use assets | 29,942 | 28,970 | 4,200 | ||||||
| Finance lease right-of-use assets | 2,235 | 2,047 | 297 | ||||||
| Land use rights, net | 206 | 199 | 29 | ||||||
| Long-term investments | 1,965 | 1,945 | 282 | ||||||
| Goodwill | 5,132 | 5,195 | 753 | ||||||
| Amounts due from related parties, non-current | 1 | 6 | 1 | ||||||
| Loan receivables, net | 98 | 124 | 18 | ||||||
| Other assets, net | 834 | 688 | 101 | ||||||
| Deferred tax assets | 862 | 1,093 | 158 | ||||||
| Total assets | 63,269 | 61,507 | 8,918 | ||||||
| LIABILITIES AND EQUITY | |||||||||
| Current liabilities: | |||||||||
| Short-term debt | 6,232 | 3,288 | 477 | ||||||
| Accounts payable | 968 | 1,171 | 170 | ||||||
| Amounts due to related parties | 197 | 71 | 10 | ||||||
| Salary and welfare payables | 591 | 657 | 95 | ||||||
| Deferred revenue | 1,366 | 1,308 | 190 | ||||||
| Operating lease liabilities, current | 3,628 | 3,773 | 547 | ||||||
| Finance lease liabilities, current | 41 | 41 | 6 | ||||||
| Accrued expenses and other current liabilities | 1,838 | 2,337 | 339 | ||||||
| Income tax payable | 418 | 500 | 72 | ||||||
| Total current liabilities | 15,279 | 13,146 | 1,906 | ||||||
| Long-term debt | 3,565 | 6,635 | 962 | ||||||
| Operating lease liabilities, non-current | 28,012 | 27,637 | 4,007 | ||||||
| Finance lease liabilities, non-current | 2,684 | 2,513 | 364 | ||||||
| Deferred revenue | 785 | 828 | 120 | ||||||
| Other long-term liabilities | 903 | 977 | 142 | ||||||
| Deferred tax liabilities | 853 | 858 | 124 | ||||||
| Retirement benefit obligations | 144 | 110 | 16 | ||||||
| Total liabilities | 52,225 | 52,704 | 7,641 | ||||||
| Equity: | |||||||||
| Ordinary shares | 0 | 0 | 0 | ||||||
| Treasury shares | (107 | ) | (441 | ) | (64 | ) | |||
| Additional paid-in capital | 9,964 | 10,138 | 1,470 | ||||||
| Retained earnings | 1,037 | (1,200 | ) | (174 | ) | ||||
| Accumulated other comprehensive income | 41 | 232 | 34 | ||||||
| Total H World Group Limited shareholders' equity | 10,935 | 8,729 | 1,266 | ||||||
| Noncontrolling interest | 109 | 74 | 11 | ||||||
| Total equity | 11,044 | 8,803 | 1,277 | ||||||
| Total liabilities and equity | 63,269 | 61,507 | 8,918 | ||||||
| H World Group Limited | ||||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Comprehensive Income | ||||||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||
| December 31, 2021 | September 30, 2022 | December 31, 2022 | December 31, 2021 | December 31, 2022 | ||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
| (in millions, except shares, per share and per ADS data) | ||||||||||||||||||||
| Revenue: | ||||||||||||||||||||
| Leased and owned hotels | 2,093 | 2,695 | 2,450 | 355 | 8,118 | 9,148 | 1,326 | |||||||||||||
| Manachised and franchised hotels | 1,103 | 1,313 | 1,158 | 168 | 4,404 | 4,405 | 639 | |||||||||||||
| Others | 152 | 85 | 98 | 14 | 263 | 309 | 45 | |||||||||||||
| Total revenue | 3,348 | 4,093 | 3,706 | 537 | 12,785 | 13,862 | 2,010 | |||||||||||||
| Operating costs and expenses: | ||||||||||||||||||||
| Hotel operating costs: | ||||||||||||||||||||
| Rents | (998 | ) | (935 | ) | (956 | ) | (139 | ) | (3,900 | ) | (3,927 | ) | (569 | ) | ||||||
| Utilities | (122 | ) | (163 | ) | (162 | ) | (23 | ) | (506 | ) | (603 | ) | (87 | ) | ||||||
| Personnel costs | (841 | ) | (964 | ) | (981 | ) | (142 | ) | (3,022 | ) | (3,683 | ) | (534 | ) | ||||||
| Depreciation and amortization | (365 | ) | (351 | ) | (351 | ) | (51 | ) | (1,413 | ) | (1,414 | ) | (205 | ) | ||||||
| Consumables, food and beverage | (281 | ) | (286 | ) | (289 | ) | (42 | ) | (969 | ) | (1,026 | ) | (149 | ) | ||||||
| Others | (587 | ) | (346 | ) | (691 | ) | (99 | ) | (1,472 | ) | (1,607 | ) | (233 | ) | ||||||
| Total hotel operating costs | (3,194 | ) | (3,045 | ) | (3,430 | ) | (496 | ) | (11,282 | ) | (12,260 | ) | (1,777 | ) | ||||||
| Other operating costs | (19 | ) | (13 | ) | (22 | ) | (3 | ) | (58 | ) | (62 | ) | (9 | ) | ||||||
| Selling and marketing expenses | (183 | ) | (181 | ) | (169 | ) | (25 | ) | (641 | ) | (613 | ) | (89 | ) | ||||||
| General and administrative expenses | (438 | ) | (405 | ) | (440 | ) | (64 | ) | (1,545 | ) | (1,675 | ) | (243 | ) | ||||||
| Pre-opening expenses | (30 | ) | (25 | ) | (14 | ) | (2 | ) | (81 | ) | (95 | ) | (14 | ) | ||||||
| Total operating costs and expenses | (3,864 | ) | (3,669 | ) | (4,075 | ) | (590 | ) | (13,607 | ) | (14,705 | ) | (2,132 | ) | ||||||
| Other operating income (expense), net | 555 | 76 | 276 | 40 | 986 | 549 | 79 | |||||||||||||
| Income (losses) from operations | 39 | 500 | (93 | ) | (13 | ) | 164 | (294 | ) | (43 | ) | |||||||||
| Interest income | 23 | 23 | 27 | 4 | 89 | 87 | 13 | |||||||||||||
| Interest expense | (92 | ) | (93 | ) | (117 | ) | (17 | ) | (405 | ) | (409 | ) | (59 | ) | ||||||
| Other (expense) income, net | (47 | ) | (14 | ) | (65 | ) | (9 | ) | 157 | 10 | 1 | |||||||||
| Unrealized gains (losses) from fair value changes of equity securities | (217 | ) | (313 | ) | 140 | 20 | (96 | ) | (359 | ) | (52 | ) | ||||||||
| Foreign exchange (loss) gain | (112 | ) | (359 | ) | 181 | 26 | (317 | ) | (641 | ) | (93 | ) | ||||||||
| Income (loss) before income taxes | (406 | ) | (256 | ) | 73 | 11 | (408 | ) | (1,606 | ) | (233 | ) | ||||||||
| Income tax benefit (expense) | (16 | ) | (434 | ) | (203 | ) | (30 | ) | (12 | ) | (207 | ) | (30 | ) | ||||||
| Income (loss) from equity method investments | (42 | ) | (20 | ) | 3 | 0 | (60 | ) | (36 | ) | (5 | ) | ||||||||
| Net income (loss) | (464 | ) | (710 | ) | (127 | ) | (19 | ) | (480 | ) | (1,849 | ) | (268 | ) | ||||||
| Net (income) loss attributable to noncontrolling interest | 5 | (7 | ) | 3 | 0 | 15 | 28 | 4 | ||||||||||||
| Net income (loss) attributable to H World Group Limited | (459 | ) | (717 | ) | (124 | ) | (19 | ) | (465 | ) | (1,821 | ) | (264 | ) | ||||||
| Gain arising from defined benefit plan, net of tax | 13 | - | 22 | 3 | 13 | 22 | 3 | |||||||||||||
| Unrealized gains (losses) from fair value changes of debt securities, net of tax | - | - | 57 | 8 | - | 57 | 8 | |||||||||||||
| Foreign currency translation adjustments, net of tax | 7 | 7 | 82 | 12 | (99 | ) | 112 | 16 | ||||||||||||
| Comprehensive income (loss) | (444 | ) | (703 | ) | 34 | 4 | (566 | ) | (1,658 | ) | (241 | ) | ||||||||
| Comprehensive (income) loss attributable to noncontrolling interest | 5 | (7 | ) | 3 | 0 | 15 | 28 | 4 | ||||||||||||
| Comprehensive income (loss) attributable to H World Group Limited | (439 | ) | (710 | ) | 37 | 4 | (551 | ) | (1,630 | ) | (237 | ) | ||||||||
| Earnings (losses) per share(1): | ||||||||||||||||||||
| Basic | (0.15 | ) | (0.23 | ) | (0.04 | ) | (0.01 | ) | (0.15 | ) | (0.59 | ) | (0.08 | ) | ||||||
| Diluted | (0.15 | ) | (0.23 | ) | (0.04 | ) | (0.01 | ) | (0.15 | ) | (0.59 | ) | (0.08 | ) | ||||||
| Earnings (losses) per ADS: | ||||||||||||||||||||
| Basic | (1.47 | ) | (2.31 | ) | (0.40 | ) | (0.06 | ) | (1.49 | ) | (5.85 | ) | (0.85 | ) | ||||||
| Diluted | (1.47 | ) | (2.31 | ) | (0.40 | ) | (0.06 | ) | (1.49 | ) | (5.85 | ) | (0.85 | ) | ||||||
| Weighted average number of shares used in computation: | ||||||||||||||||||||
| Basic | 3,117,745,440 | 3,107,798,883 | 3,109,528,097 | 3,109,528,097 | 3,114,124,244 | 3,111,196,757 | 3,111,196,757 | |||||||||||||
| Diluted | 3,117,745,440 | 3,107,798,883 | 3,109,528,097 | 3,109,528,097 | 3,114,124,244 | 3,111,196,757 | 3,111,196,757 | |||||||||||||
| H World Group Limited | ||||||||||||||||||||
| Unaudited Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||
| December 31, 2021 | September 30, 2022 | December 31, 2022 | December 31,2021 | December 31, 2022 | ||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
| (in millions) | ||||||||||||||||||||
| Operating activities: | ||||||||||||||||||||
| Net income (loss) | (464 | ) | (710 | ) | (127 | ) | (19 | ) | (480 | ) | (1,849 | ) | (268 | ) | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||||||
| Share-based compensation | 15 | 29 | 9 | 1 | 109 | 87 | 13 | |||||||||||||
| Depreciation and amortization, and other | 436 | 370 | 369 | 54 | 1,563 | 1,513 | 219 | |||||||||||||
| Impairment loss | 320 | 10 | 390 | 57 | 380 | 491 | 71 | |||||||||||||
| Loss (income) from equity method investments, net of dividends | 38 | 22 | (3 | ) | (0 | ) | 60 | 85 | 12 | |||||||||||
| Investment (income) loss | 245 | 550 | (362 | ) | (53 | ) | 67 | 662 | 96 | |||||||||||
| Changes in operating assets and liabilities | 458 | 182 | 1,008 | 146 | (92 | ) | 166 | 24 | ||||||||||||
| Other | (181 | ) | (1 | ) | (242 | ) | (35 | ) | (265 | ) | 409 | 60 | ||||||||
| Net cash provided by operating activities | 867 | 452 | 1,042 | 151 | 1,342 | 1,564 | 227 | |||||||||||||
| Investing activities: | ||||||||||||||||||||
| Capital expenditures | (469 | ) | (256 | ) | (229 | ) | (33 | ) | (1,675 | ) | (1,053 | ) | (153 | ) | ||||||
| Acquisitions, net of cash received | - | 0 | 2 | 0 | (742 | ) | (57 | ) | (8 | ) | ||||||||||
| Purchase of investments | (49 | ) | (300 | ) | (23 | ) | (3 | ) | (521 | ) | (401 | ) | (58 | ) | ||||||
| Proceeds from maturity/sale of investments | 64 | 6 | 370 | 54 | 1,494 | 937 | 136 | |||||||||||||
| Loan advances | (96 | ) | (29 | ) | (30 | ) | (4 | ) | (181 | ) | (182 | ) | (26 | ) | ||||||
| Loan collections | 38 | 52 | 52 | 7 | 187 | 224 | 32 | |||||||||||||
| Other | 9 | 2 | 7 | 1 | 36 | 10 | 1 | |||||||||||||
| Net cash provided by (used in) investing activities | (503 | ) | (525 | ) | 149 | 22 | (1,402 | ) | (522 | ) | (76 | ) | ||||||||
| Financing activities: | ||||||||||||||||||||
| Payment of share repurchase | - | - | - | - | (0 | ) | (334 | ) | (48 | ) | ||||||||||
| Proceeds from debt | 167 | 3,721 | 2,288 | 332 | 2,383 | 7,101 | 1,030 | |||||||||||||
| Repayment of debt | (768 | ) | (3,336 | ) | (3,670 | ) | (532 | ) | (4,171 | ) | (7,781 | ) | (1,128 | ) | ||||||
| Dividend paid | - | - | - | - | - | (416 | ) | (60 | ) | |||||||||||
| Other | 3 | 76 | (19 | ) | (3 | ) | (13 | ) | 36 | 5 | ||||||||||
| Net cash provided by (used in) financing activities | (598 | ) | 461 | (1,401 | ) | (203 | ) | (1,801 | ) | (1,394 | ) | (201 | ) | |||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | (36 | ) | 149 | 79 | 11 | (88 | ) | 297 | 43 | |||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | (270 | ) | 537 | (131 | ) | (19 | ) | (1,949 | ) | (55 | ) | (7 | ) | |||||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 5,411 | 4,680 | 5,217 | 757 | 7,090 | 5,141 | 745 | |||||||||||||
| Cash, cash equivalents and restricted cash at the end of the period | 5,141 | 5,217 | 5,086 | 738 | 5,141 | 5,086 | 738 | |||||||||||||
| H World Group Limited | ||||||||||||||||||||
| Unaudited Reconciliation of GAAP and Non-GAAP Results | ||||||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||
| December 31, 2021 | September 30, 2022 | December 31, 2022 | December 31, 2021 | December 31, 2022 | ||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
| (in millions, except shares, per share and per ADS data) | ||||||||||||||||||||
| Net income (loss) attributable to H World Group Limited (GAAP) | (459 | ) | (717 | ) | (124 | ) | (19 | ) | (465 | ) | (1,821 | ) | (264 | ) | ||||||
| Share-based compensation expenses | 15 | 29 | 9 | 1 | 109 | 87 | 13 | |||||||||||||
| Unrealized (gains) losses from fair value changes of equity securities | 217 | 313 | (140 | ) | (20 | ) | 96 | 359 | 52 | |||||||||||
| Adjusted net income (loss) attributable to H World Group Limited (non-GAAP) | (227 | ) | (375 | ) | (255 | ) | (38 | ) | (260 | ) | (1,375 | ) | (199 | ) | ||||||
| Adjusted earnings (losses) per share (non-GAAP)(2) | ||||||||||||||||||||
| Basic | (0.07 | ) | (0.12 | ) | (0.08 | ) | (0.01 | ) | (0.08 | ) | (0.44 | ) | (0.06 | ) | ||||||
| Diluted | (0.07 | ) | (0.12 | ) | (0.08 | ) | (0.01 | ) | (0.08 | ) | (0.44 | ) | (0.06 | ) | ||||||
| Adjusted earnings (losses) per ADS (non-GAAP) | ||||||||||||||||||||
| Basic | (0.73 | ) | (1.21 | ) | (0.82 | ) | (0.12 | ) | (0.83 | ) | (4.42 | ) | (0.64 | ) | ||||||
| Diluted | (0.73 | ) | (1.21 | ) | (0.82 | ) | (0.12 | ) | (0.83 | ) | (4.42 | ) | (0.64 | ) | ||||||
| Weighted average number of shares used in computation | ||||||||||||||||||||
| Basic | 3,117,745,440 | 3,107,798,883 | 3,109,528,097 | 3,109,528,097 | 3,114,124,244 | 3,111,196,757 | 3,111,196,757 | |||||||||||||
| Diluted | 3,117,745,440 | 3,107,798,883 | 3,109,528,097 | 3,109,528,097 | 3,114,124,244 | 3,111,196,757 | 3,111,196,757 | |||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||||||
| December 31, 2021 | September 30,2022 | December 31, 2022 | December 31, 2021 | December 31, 2022 | ||||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | US$ | ||||||||||||||
| (in millions, except per share and per ADS data) | ||||||||||||||||||||
| Net income (loss) attributable to H World Group Limited (GAAP) | (459 | ) | (717 | ) | (124 | ) | (19 | ) | (465 | ) | (1,821 | ) | (264 | ) | ||||||
| Interest income | (23 | ) | (23 | ) | (27 | ) | (4 | ) | (89 | ) | (87 | ) | (13 | ) | ||||||
| Interest expense | 92 | 93 | 117 | 17 | 405 | 409 | 59 | |||||||||||||
| Income tax expense | 16 | 434 | 203 | 30 | 12 | 207 | 30 | |||||||||||||
| Depreciation and amortization | 420 | 362 | 360 | 52 | 1,503 | 1,456 | 211 | |||||||||||||
| EBITDA (non-GAAP) | 46 | 149 | 529 | 76 | 1,366 | 164 | 23 | |||||||||||||
| Share-based compensation | 15 | 29 | 9 | 1 | 109 | 87 | 13 | |||||||||||||
| Unrealized (gains) losses from fair value changes of equity securities | 217 | 313 | (140 | ) | (20 | ) | 96 | 359 | 52 | |||||||||||
| Adjusted EBITDA (non-GAAP) | 278 | 491 | 398 | 57 | 1,571 | 610 | 88 | |||||||||||||
| H World Group Limited | |||||||||||||||||||||||||||||
| Segment Financial Summary(1) | |||||||||||||||||||||||||||||
| Quarter Ended December 31, 2021 | Quarter Ended September 30, 2022 | Quarter Ended December 31, 2022 | |||||||||||||||||||||||||||
| Legacy- Huazhu | Legacy- DH | Total | Legacy- Huazhu | Legacy- DH | Total | Legacy- Huazhu | Legacy- DH | Total | |||||||||||||||||||||
| RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | RMB | US$ | ||||||||||||||||||||
| (in millions) | (in millions) | (in millions) | |||||||||||||||||||||||||||
| Leased and owned hotels | 1,565 | 528 | 2,093 | 1,793 | 902 | 2,695 | 1,537 | 913 | 2,450 | 355 | |||||||||||||||||||
| Manachised and franchised hotels | 1,073 | 30 | 1,103 | 1,291 | 22 | 1,313 | 1,130 | 28 | 1,158 | 168 | |||||||||||||||||||
| Others | 138 | 14 | 152 | 77 | 8 | 85 | 90 | 8 | 98 | 14 | |||||||||||||||||||
| Revenue | 2,776 | 572 | 3,348 | 3,161 | 932 | 4,093 | 2,757 | 949 | 3,706 | 537 | |||||||||||||||||||
| Hotel operating costs | (2,331 | ) | (863 | ) | (3,194 | ) | (2,301 | ) | (744 | ) | (3,045 | ) | (2,446 | ) | (984 | ) | (3,430 | ) | (496 | ) | |||||||||
| Selling and marketing expenses | (129 | ) | (54 | ) | (183 | ) | (105 | ) | (76 | ) | (181 | ) | (88 | ) | (81 | ) | (169 | ) | (25 | ) | |||||||||
| General and administrative expenses | (308 | ) | (130 | ) | (438 | ) | (330 | ) | (75 | ) | (405 | ) | (320 | ) | (120 | ) | (440 | ) | (64 | ) | |||||||||
| Pre-opening expenses | (30 | ) | (0 | ) | (30 | ) | (25 | ) | - | (25 | ) | (14 | ) | (0 | ) | (14 | ) | (2 | ) | ||||||||||
| Income (losses) from operations | 60 | (21 | ) | 39 | 449 | 51 | 500 | (3 | ) | (90 | ) | (93 | ) | (13 | ) | ||||||||||||||
| Net income (loss) attributable to H World Group Limited | (419 | ) | (40 | ) | (459 | ) | (731 | ) | 14 | (717 | ) | (84 | ) | (40 | ) | (124 | ) | (19 | ) | ||||||||||
| Interest income | (23 | ) | (0 | ) | (23 | ) | (23 | ) | (0 | ) | (23 | ) | (27 | ) | (0 | ) | (27 | ) | (4 | ) | |||||||||
| Interest expense | 64 | 28 | 92 | 60 | 33 | 93 | 84 | 33 | 117 | 17 | |||||||||||||||||||
| Income tax expense | 37 | (21 | ) | 16 | 446 | (12 | ) | 434 | 260 | (57 | ) | 203 | 30 | ||||||||||||||||
| Depreciation and amortization | 318 | 102 | 420 | 303 | 59 | 362 | 295 | 65 | 360 | 52 | |||||||||||||||||||
| EBITDA (non-GAAP) | (23 | ) | 69 | 46 | 55 | 94 | 149 | 528 | 1 | 529 | 76 | ||||||||||||||||||
| Share-based Compensation | 15 | - | 15 | 29 | - | 29 | 9 | - | 9 | 1 | |||||||||||||||||||
| Unrealized (gains) losses from fair value changes of equity securities | 217 | - | 217 | 313 | - | 313 | (140 | ) | - | (140 | ) | (20 | ) | ||||||||||||||||
| Adjusted EBITDA (non-GAAP) | 209 | 69 | 278 | 397 | 94 | 491 | 397 | 1 | 398 | 57 | |||||||||||||||||||
| (1) The Company presents segment information after elimination of intercompany transactions. | |||||||||||||||||||||||||||||
| H World Group Limited | ||||||||||||||||||||
| Segment Financial Summary(2) | ||||||||||||||||||||
| Year Ended December 31, 2022 | Year Ended December 31, 2021 | |||||||||||||||||||
| Legacy Huazhu | Legacy DH | Total | Legacy Huazhu | Legacy DH | Total | |||||||||||||||
| RMB | RMB | RMB | US$ | RMB | RMB | RMB | ||||||||||||||
| (in millions) | (in millions) | |||||||||||||||||||
| Leased and owned hotels | 6,062 | 3,086 | 9,148 | 1,326 | 6,674 | 1,444 | 8,118 | |||||||||||||
| Manachised and franchised hotels | 4,324 | 81 | 4,405 | 639 | 4,342 | 62 | 4,404 | |||||||||||||
| Others | 269 | 40 | 309 | 45 | 231 | 32 | 263 | |||||||||||||
| Revenue | 10,655 | 3,207 | 13,862 | 2,010 | 11,247 | 1,538 | 12,785 | |||||||||||||
| Hotel operating costs | (9,170 | ) | (3,090 | ) | (12,260 | ) | (1,777 | ) | (8,806 | ) | (2,476 | ) | (11,282 | ) | ||||||
| Selling and marketing expenses | (336 | ) | (277 | ) | (613 | ) | (89 | ) | (460 | ) | (181 | ) | (641 | ) | ||||||
| General and administrative expenses | (1,262 | ) | (413 | ) | (1,675 | ) | (243 | ) | (1,164 | ) | (381 | ) | (1,545 | ) | ||||||
| Pre-opening expenses | (95 | ) | (0 | ) | (95 | ) | (14 | ) | (81 | ) | (0 | ) | (81 | ) | ||||||
| Income (losses) from operations | 51 | (345 | ) | (294 | ) | (43 | ) | 891 | (727 | ) | 164 | |||||||||
| Net income (losses) attributable to H World Group Limited | (1,420 | ) | (401 | ) | (1,821 | ) | (264 | ) | 153 | (618 | ) | (465 | ) | |||||||
| Interest income | (86 | ) | (1 | ) | (87 | ) | (13 | ) | (88 | ) | (1 | ) | (89 | ) | ||||||
| Interest expense | 278 | 131 | 409 | 59 | 291 | 114 | 405 | |||||||||||||
| Income tax expense | 298 | (91 | ) | 207 | 30 | 249 | (237 | ) | 12 | |||||||||||
| Depreciation and amortization | 1,212 | 244 | 1,456 | 211 | 1,222 | 281 | 1,503 | |||||||||||||
| EBITDA (non-GAAP) | 282 | (118 | ) | 164 | 23 | 1,827 | (461 | ) | 1,366 | |||||||||||
| Share-based Compensation | 87 | - | 87 | 13 | 109 | - | 109 | |||||||||||||
| Unrealized (gains) losses from fair value changes of equity securities | 359 | - | 359 | 52 | 96 | - | 96 | |||||||||||||
| Adjusted EBITDA (non-GAAP) | 728 | (118 | ) | 610 | 88 | 2,032 | (461 | ) | 1,571 | |||||||||||
| (2) The Company presents segment information after elimination of intercompany transactions. | ||||||||||||||||||||
Operating Results: Legacy-Huazhu
| 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 | 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 | 4,930 | 1,053 |
| Leased and owned hotels | 353 | 1 |
| Manachised and franchised hotels | 4,577 | 1,052 |
| Midscale and upscale hotels | 3,481 | 1,491 |
| Leased and owned hotels | 270 | 13 |
| Manachised and franchised hotels | 3,211 | 1,478 |
| Total | 8,411 | 2,544 |
| 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% | -4.3 p.p. | ||||
| Manachised and franchised hotels | 68.4% | 76.4% | 66.6% | -1.8 p.p. | ||||
| Blended | 68.2% | 76.0% | 66.2% | -2.0 p.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% | -21.6 p.p. | |||
| Manachised and franchised hotels | 81.6% | 66.6% | -15.0 p.p. | |||
| Blended | 82.2% | 66.2% | -16.0 p.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 approximately 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% | -6.7 p.p. | |||
| Manachised and franchised hotels | 72.4% | 67.1% | -5.4 p.p. | |||
| Blended | 72.2% | 66.7% | -5.5 p.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% | -23.0 p.p. | |||
| Manachised and franchised hotels | 83.8% | 67.1% | -16.7 p.p. | |||
| Blended | 84.4% | 66.7% | -17.7 p.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 approximately 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 | yoychange | For the quarter | yoychange | For the quarter | yoychange | |||||||||
| ended December 31, | ended December 31, | ended December 31, | |||||||||||||
| 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 | yoychange | For the quarter | yoychange | For the quarter | yoychange | |||||||||
| ended December 31, | ended December 31, | ended December 31, | |||||||||||||
| 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 | yoychange | For the year | yoychange | For the year | yoychange | |||||||||
| ended December 31, | ended December 31, | ended December 31, | |||||||||||||
| 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 | yoychange | For the year | yoychange | For the year | yoychange | |||||||||
| ended December 31, | ended December 31, | ended December 31, | |||||||||||||
| 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
| 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 | 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 for major repairs. | ||||||||
| 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).
__________________________
1 Hotel turnover refers to total transaction value of room and non-room revenue from H World 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$1.00=RMB6.8972 on December 30, 2022 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.
3 The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB6.8972 on December 30, 2022 as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.