Q2 Turnover Increased 72.0% YOY
Legacy-Huazhu Signed over 1,000 New Hotels
HONG KONG, Aug. 25, 2023 /PRNewswire/ -- H World Group Limited ("H World" or "the Group", NASDAQ: HTHT and HKEX: 1179) announced its unaudited financial results in the second quarter and the first half ended June 30, 2023.
Revenue for the first half of 2023 was RMB10.0 billion (US$1.4 billion), representing an increase of 65.1% compared to the first half of 2022. Revenue from Legacy-Huazhu was RMB7.9 billion, which represented a 67.7% year-over-year increase. Revenue from Steigenberger Hotels GmbH and its subsidiaries ("DH", or "Legacy-DH") was RMB2.1 billion, representing a 55.9% year-over-year increase.
H World's Hotel turnover increased significantly by 72.0% year-over-year to RMB20.3 billion in the second quarter of 2023. Excluding DH, hotel turnover raised to 78.1% year-over-year in the second quarter of 2023. Revenue increased 63.5% year-over-year to RMB5.5 billion (US$762 million). Revenue from the Legacy-Huazhu was RMB4.3 billion, representing a 76.6% year-over-year increase, which was a result of the strong recovery in demand for travel, as well as due to the continued product upgrades and operational optimization via the Group's regional headquarters. Revenue growth for both the Group and Legacy-Huazhu exceeded the revenue guidance previously announced. Revenue from the DH segment was RMB1.2 billion, representing a 28.4% year-over-year increase and a 33.5% sequential increase. The year-over-year increase was largely due to the continued recovery of the Group's business, and the sequential increase was mainly due to seasonality. Net income attributable to H World was RMB1.0 billion (US$138 million), compared with net losses attributable to H World of RMB350 million in the second quarter of 2022. EBITDA (non-GAAP) was RMB1.7 billion (US$234 million), compared with a negative RMB213 million in the second quarter of 2022 and RMB1.6 billion in the previous quarter.
As of June 30, 2023, H World's worldwide hotel network in operation totaled 8,750 hotels and 844,417 rooms, including 128 hotels from DH. Legacy-Huazhu had 8,622 hotels in operation and 818,245 hotel rooms in operation. In the second quarter of 2023, Legacy-Huazhu celebrated a historical high signing of over 1,000 new hotels. The ADR was RMB305, compared with RMB218 in the second quarter of 2022, RMB277 in the previous quarter, and RMB236 in the second quarter of 2019. The OCC for all the Legacy-Huazhu hotels in operation was 81.8%, representing a 17.2p.p. year-over-year increase. Blended RevPAR was RMB250, which has recovered to 121% of the Q2 2019 level. When broken down into monthly numbers, the Group's RevPAR in April, May and June 2023 recovered to 127%, 115% and 123% of the 2019 levels of the corresponding months respectively. The ADR of DH increased to EUR117, and the OCC for all DH hotels in operation increased by 7.3 p.p. to 67.1% year-over-year, with blended RevPAR being EUR78.
Jin Hui, CEO of H World commented: "The strong recovery continues to be largely driven by ADR growth in the second quarter, which reflected a combination of product mix change and product upgrades, as well as market penetration and synergy via our regional offices. Continued increases in our franchisees' confidence level led us to enjoy a historical high of new hotels signed during the quarter. Regarding our overseas business, our DH business recovery improved sequentially, and EBITDA turned positive in the second quarter."
As a leading player in the hotel industry in China and one of the fastest-growing hotel groups in the world, H World has achieved its RevPAR growth momentum by consistently upgrading its brands and services, helping the Group to recover from uncertainty and maintain its rapid growth. By focusing on economy and midscale as the core products, serving the mass market, and implementing a strategy to further develop the upper-midscale segment, the Group has successfully achieved its vision of high-quality brand development. Meanwhile, the Group also focused on digital development to empower growth, to accomplish a higher quality, more efficient, and stable operational model and enhance consumer stickiness. Meanwhile, H World was ranked 6th in the "Top 200 Global Hotel Groups 2022" list published by HOTELS Magazine in the United States, which reflects the rapid development and increasing comprehensive competitiveness of the Group. In the future, the Group will continue to adhere to its sustainable and high-quality development path and sharpen its performance to bring long-term stable returns to shareholders.
About H World Group Limited:
Originated in China, H World Group Limited is a key player in the global hotel industry. H World's brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, H World also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.
H World's business includes leased and owned, manachised and franchised models. Under the lease and ownership model, H World directly operates hotels typically located on leased or owned properties. Under the manachise model, H World manages manachised hotels through the on-site hotel managers that H World appoints, and H World collects fees from franchisees. Under the franchise model, H World provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. H World applies a consistent standard and platform across all of its hotels.
For more information, please visit H World's website: https://ir.hworld.com.
