Huazhu expects its net income in the next quarter to grow by 87% to 89% year-on-year.

Editor’s note: This article is from the WeChat public account “Global Travel News” (ID: Traveldaily).

On the evening of May 25th, Beijing time, China Lodging announced its financial results for the first quarter of 2021: In the first quarter, net income was 2.3 billion yuan, a year-on-year increase of 15.6%; DH (Deutsche Hotels) was excluded, and net income was year-on-year An increase of 68.8%.

As of March 31, 2021, China Lodging has 6,881 hotels and 662,512 rooms in operation worldwide, including 120 hotels in DH.

In the first quarter of 2021, excluding DH, Huazhu opened 209 hotels, including 2 leased (or leased) hotels and 207 managed franchise (or franchise management) hotels and franchised hotels. A total of 117 hotels were closed, including 19 leased hotels and 98 managed franchise and franchise hotels.

During the first quarter of 2021, DH will open one leased hotel and close one managed franchise and franchise hotel.

As of March 31, 2021, China Lodging has a total of 2,649 hotels to open, including 41 hotels from DH.

Ji Qi, the founder, executive chairman and CEO of Huazhu, said: “The resurgence of the epidemic and the guidance of’Chinese New Year in situ’ put pressure on the recovery of our average rental room revenue in January and February. But we are very pleased to see that since late March, the average rentable room revenue has recovered rapidly at a stronger rate. Our April average rentable room revenue has returned to the same level as before the 2019 epidemic. Labor in China The average rental room revenue during the holiday season increased by more than 25% compared to the same period in 2019.”

“We believe that strong demand for business and leisure travel will continue to drive future recovery. Although our European business is still under pressure due to COVID-19, we see that the German government is conditionally gradually relaxing travel restrictions. We It is expected that as vaccination continues, our European business will gradually recover during the summer.”

01 Overall performance

As of March 31, 2021, Huazhu has a total of 6,881 hotels in operation (or 662,512 hotel rooms in operation).

In the first quarter, hotel turnover increased by 66.3% year-on-year to RMB 8.2 billion. Excluding DH, hotel turnover in the first quarter increased by 113.4% year-on-year.

In the first quarter, net income increased by 15.6% year-on-year to RMB 2.3 billion, better than the previously announced revenue guidance of 8% to 10%. Excluding DH, net income in the first quarter increased by 68.8% year-on-year, better than the previously announced revenue guidance of 61% to 63%.

In the first quarter, the net loss attributable to Huazhu Group Co., Ltd. was 248 million yuan, compared with the loss of 2.1 billion yuan in the first quarter of 2020 and the net profit attributable to Huazhu Group Co., Ltd. in the previous quarter RMB 703 million. Excluding DH, the net profit attributable to Huazhu Group Co., Ltd. in the first quarter of 2021 was RMB 53 million.

Excluding equity incentive expenses and unrealized gains (losses) arising from changes in the fair value of equity securities, the adjusted net loss (non-GAAP) attributable to Huazhu Group Co., Ltd. in the first quarter of 2021 is RMB 451 million, compared with RMB 1.1 billion in the first quarter of 2020. Excluding DH, the adjusted net loss (non-GAAP) attributable to Huazhu Group Co., Ltd. in the first quarter of 2021 was RMB 150 million.

In the first quarter, EBITDA (non-GAAP) was 70 million yuan, compared to a negative 1.7 billion yuan in the first quarter of 2020. Excluding DH, EBITDA (non-GAAP) was RMB 410 million, compared with RMB 1.7 billion in the first quarter of 2020.

Excluding equity incentive expenses and unrealized gains (losses) arising from changes in the fair value of equity securities, the adjusted EBITDA (non-GAAP) for the first quarter of 2021 was RMB 133 million. Excluding DH, adjusted EBITDA (non-GAAP) was RMB 207 million.

02 Huazhu’s Q1 performance without DH hotels

As of March 31, 2021, China Lodging has 6,761 hotels in operation, including 664 leased and self-owned hotels and 6,097 managed franchise hotels and franchise hotels.

Huazhu has 638,619 hotel rooms in operation, including 89,901 hotel rooms under the lease and ownership model and 548,718 hotel rooms under the management franchise and franchise model.

Huazhu has 2608 hotels to open, including 19 leased and owned hotels and 2,589 managed franchise and franchise hotels.

The following is the average leasable room revenue, daily average room rate and occupancy rate of Huazhu’s leased and owned hotels, as well as managed franchised and franchised hotels (excluding government requisitioned hotels) in the first quarter of 2021:

The average daily house price is RMB 209, compared to RMB 189 in the first quarter of 2020, RMB 231 in the previous quarter, and RMB 221 in the first quarter of 2019.

The occupancy rate of all operating hotels is 66.2%, compared to 46.7% in the first quarter of 2020, 80.6% in the previous quarter and 80.6% in the first quarter of 2019.

The mixed average rentable room revenue was 138 yuan, compared to 88 yuan in the first quarter of 2020, 186 yuan in the previous quarter, and 178 yuan in the first quarter of 2019.

For hotels that have been in operation for at least 18 months, the same-store average rentable room revenue in the first quarter of 2021 was RMB 138, an increase of 50.2% from RMB 92 in the first quarter of 2020, and the average daily room rate increased by 7.6 % And the occupancy rate increased by 19.2%; in the first quarter of 2021 compared with the first quarter of 2019 (before COVID-19), the average rentable room revenue decreased by 29.9% from RMB 187 in the first quarter of 2019, and the average daily The house price dropped by 12.6% and the occupancy rate dropped by 16.6 percentage points.

03 DH Hotel’s Q1 performance

As of March 31, 2021, DH has 120 hotels in operation, including 73 leased and owned hotels and 47 managed franchise hotels and franchised hotels.

DH has 23,893 hotel rooms in operation, including 13,527 hotel rooms under the lease and ownership model, and 10,366 hotel rooms under the management franchise and franchise model.

DH has 41 hotels to open, including 27 leased and owned hotels and 14 managed franchise and franchise hotels.

The following is the average rentable room revenue, average daily room rate and occupancy rate of DH leased and managed franchise and franchised hotels (excluding temporarily closed hotels) in the first quarter of 2021:

The average daily house price is 69 Euros, compared to 89 Euros in the first quarter of 2020 and 76 Euros in the previous quarter.

The occupancy rate of all operating hotels is 18.8%, compared to 51.7% in the first quarter of 2020 and 22.5% in the previous quarter.

The mixed average rentable room revenue was 13 euros, compared to 46 euros in the first quarter of 2020 and 17 euros in the previous quarter.

04 Acquisition of CitiGO

In May 2021, Huazhu completed the acquisition of CitiGO, with a total enterprise value consideration of RMB 750 million. CitiGO was established in China in 2017. As of May 1, 2021, there are 28 hotels in operation. The acquisition of CitiGO, known for its boutique design and unique accommodation experience, is expected to further enrich China Lodging’s leisure and lifestyle brand portfolio.

05 Performance Outlook

The recurrence of the epidemic in January and February 2021 delayed China Lodging’s hotel opening plan in the first quarter. China Lodging will reduce its total opening target in 2021 from 1,800 to 2,000 hotels to 1,600 to 1,800 hotels.

In addition, due to the extension of the German blockade period, if DH is included, Huazhu will lower its annual revenue growth guidance to 44% to 48% compared to 2020, or 31% to 35% compared to 2019 (previously The guidance is an increase of 50% to 54% compared to 2020, or an increase of 36% to 40% compared to 2019).

If DH is not included, Huazhu’s full-year revenue guidance remains unchanged, which is an increase of 50% to 54% compared to 2020, or an increase of 15% to 19% compared to 2019.

In the second quarter of 2021, China Lodging expects its net income to grow by 87% to 89%, or 90% to 92% (if DH is not included) compared to the second quarter of 2020. In order to provide more meaningful guidance to exclude the impact of the epidemic, China Lodging expects that its net income will increase by 27% to 29%, or 20% to 22% (if DH is not included) compared to its pre-epidemic results in the second quarter of 2019.