H World Group;

H World Group Limited (NASDAQ: HTHT and HKEX: 1179) today announced preliminary results for hotel operations in the first quarter ended March 31, 2023.

Business update

For our Legacy-Huazhu business, our RevPAR in Q1 2023 recovered to 118% of the 2019 level. Breaking down into monthly numbers, our RevPAR in January, February and March 2023 recovered to 96%, 140% and 120% of the 2019 levels, respectively. The strong recovery was primarily due to the pent-up demand in Q1 2023, and largely driven by ADR growth. During the quarter, a large part of our hotel closures were carried over from last year due to the impact of COVID-19. In line with our ‘Sustainable High Quality Growth’ strategy, we also conducted a round of thorough review of our existing pipeline and eliminated lower-quality pipeline hotels. This resulted in a quarter-over-quarter decline in the number of unopened hotels in pipeline. Our new hotel signings gained momentum quickly, reaching over 670 new hotels during the quarter, in tandem with the market recovery.

Steigenberger Hotels GmbH and its subsidiaries (“DH”, or “Legacy-DH”) continued with promising business recovery. Q1 2023 Blended RevPAR recovered to 94% of the 2019 levels mainly driven by ADR recovery.

Operating Results: Legacy-Huazhu(1)

Number of hotels Number of rooms
Opened

in Q1 2023

  Closed (2)

in Q1 2023

Net added

in Q1 2023

As of

March 31, 2023

As of

March 31, 2023

 
Leased and owned hotels 2   (5 ) (3 ) 620   88,416
Manachised and franchised hotels 260   (204 ) 56   7,844   705,511
Total 262   (209 ) 53   8,464   793,927
(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 Q1 2023, we temporarily closed 7 hotels for brand upgrade and business model change purposes.

As of March 31, 2023
Number of hotels   Unopened hotels in pipeline  
Economy hotels 4,880   903  
Leased and owned hotels 348   1  
Manachised and franchised hotels 4,532   902  
Midscale and upscale hotels 3,584   1,401  
Leased and owned hotels 272   12  
Manachised and franchised hotels 3,312   1,389  
Total 8,464   2,304  
For the quarter ended
March 31, December 31, March 31, yoy
2022  2022  2023   change
Average daily room rate (in RMB)
Leased and owned hotels 263   279   337   28.4 %
Manachised and franchised hotels 218   236   269   23.4 %
Blended 224   240   277   23.9 %
Occupancy Rate (as a percentage)
Leased and owned hotels 56.7 % 63.1 % 76.3 % +19.6 p.p.
Manachised and franchised hotels 59.6 % 66.6 % 75.5 % +16.0 p.p.
Blended 59.2 % 66.2 % 75.6 % +16.4 p.p.
RevPAR (in RMB)
Leased and owned hotels 149   176   257   72.9 %
Manachised and franchised hotels 130   157   203   56.4 %
Blended 132   159   210   58.3 %
For the quarter ended
March 31, March 31, yoy
2019   2023   change
Average daily room rate (in RMB)
Leased and owned hotels 258   337   30.8 %
Manachised and franchised hotels 211   269   27.4 %
Blended 221   277   25.4 %
Occupancy Rate (as a percentage)
Leased and owned hotels 83.6 % 76.3 % -7.3p.p.
Manachised and franchised hotels 79.8 % 75.5 % -4.3p.p.
Blended 80.6 % 75.6 % -5.0p.p.
RevPAR (in RMB)
Leased and owned hotels 216   257   19.4 %
Manachised and franchised hotels 169   203   20.5 %
Blended 178   210   17.6 %
Same-hotel operational data by class                
Mature hotels in operation for more than 18 months
  Number of hotels Same-hotel RevPAR Same-hotel ADR Same-hotel Occupancy
  As of

March 31,

For the quarter yoy For the quarter yoy For the quarter yoy
  ended

March 31,

change

ended

March 31,

change

ended

March 31,

change

  2022 2023 2022 2023   2022 2023   2022   2023   (p.p.)
Economy hotels 3,427 3,427 111 160 44.6 % 171 208 21.3 % 64.7 % 77.1 % +12.4
Leased and owned hotels 332 332 116 190 63.2 % 188 241 28.5 % 62.0 % 78.7 % +16.7
Manachised and franchised hotels 3,095 3,095 110 155 41.4 % 168 202 19.8 % 65.2 % 76.9 % +11.7
Midscale and upscale hotels 2,433 2,433 167 263 57.1 % 292 344 18.0 % 57.3 % 76.3 % +19.0
Leased and owned hotels 250 250 187 319 71.1 % 355 426 20.2 % 52.7 % 75.0 % +22.3
Manachised and franchised hotels 2,183 2,183 164 253 54.4 % 282 330 17.3 % 58.1 % 76.5 % +18.4
Total 5,860 5,860 138 210 51.8 % 227 274 20.8 % 61.1 % 76.7 % +15.7

Operating Results: Legacy-DH(3)

Number of hotels Number of

rooms

Unopened hotels

in pipeline

Opened

in Q1 2023

  Closed

in Q1 2023

Net added

in Q1 2023

As of

March 31,

2023(4)

As of

March 31,2023

As of

March 31,2023

 
Leased hotels 1   (2 ) (1 ) 80   15,497   25
Manachised and franchised hotels 1   (4 ) (3 ) 48   10,675   10
Total 2   (6 ) (4 ) 128   26,172   35
(3)   Legacy-DH refers to DH.

(4)   As of March 31, 2023, a total of 2 hotels were temporarily closed. 1 hotel was closed due to flood damage, and 1 hotel was closed due to repair work.

  For the quarter ended
  March 31, December 31, March 31, yoy
2022   2022   2023   change
Average daily room rate (in EUR)        
Leased hotels 90   114   108   19.9 %
Manachised and franchised hotels 85   134   97   13.9 %
Blended 88   122   104   17.7 %
Occupancy rate (as a percentage)
Leased hotels 34.1 % 60.0 % 53.0 % +18.9 p.p.
Manachised and franchised hotels 44.0 % 58.3 % 54.1 % +10.2 p.p.
Blended 38.0 % 59.3 % 53.5 % +15.5 p.p.
RevPAR (in EUR)
Leased hotels 31   68   57   86.2 %
Manachised and franchised hotels 38   78   53   40.1 %
Blended 33   72   55   65.8 %

Hotel Portfolio by Brand

As of March 31, 2023
Hotels   Rooms   Unopened hotels
in operation in pipeline
Economy hotels 4,896   387,694   916
HanTing Hotel 3,285   291,489   596
Hi Inn 445   23,193   129
Ni Hao Hotel 184   13,553   153
Elan Hotel 747   35,255   1
Ibis Hotel 219   22,308   24
Zleep Hotels 16   1,896   13
Midscale hotels 2,956   322,093   1,103
Ibis Styles Hotel 87   9,114   34
Starway Hotel 563   47,691   206
JI Hotel 1,758   206,410   639
Orange Hotel 548   58,878   224
Upper midscale hotels 590   84,317   250
CitiGO Hotel 34   5,337   5
Crystal Orange Hotel 164   21,239   60
Manxin Hotel 114   10,903   57
Madison Hotel 56   7,369   41
Mercure Hotel 139   22,532   47
Novotel Hotel 19   4,734   12
IntercityHotel(5) 56   10,742   23
MAXX (6) 8   1,461   5
Upscale hotels 126   20,494   59
Jaz in the City 3   587   1
Joya Hotel 8   1,368   -
Blossom House 53   2,470   46
Grand Mercure Hotel 8   1,674   4
Steigenberger Hotels & Resorts(7) 54   14,395   8
Luxury hotels 15   2,318   5
Steigenberger Icon(8) 9   1,847   1
Song Hotels 6   471   4
Others 9   3,183   6
Other hotels(9) 9   3,183   6
Total 8,592   820,099   2,339
(5)   As of March 31, 2023, 5 operational hotels and 10 pipeline hotels of IntercityHotel were in China.   
(6)   As of March 31, 2023, 3 operational hotels and 5 pipeline hotels of MAXX were in China.   
(7)   As of March 31, 2023, 11 operational hotels and 3 pipeline hotels of Steigenberger Hotels & Resorts were in China.   
(8)   As of March 31, 2023, 3 operational hotels of Steigenberger Icon were in China.   
(9)   Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).