For the Legacy-Huazhu business, RevPAR in Q4 2022 recovered to 83% of the 2019 level. The recovery was accelerated after Chinese Government announced the reopening policy in mid-November.

H World Group;

H World Group Limited (NASDAQ: HTHT and HKEX: 1179) today announced preliminary results for hotel operations in the fourth quarter (“Q4 2022”) and the full year ended December 31, 2022.

COVID-19 update

For the Legacy-Huazhu business, RevPAR in Q4 2022 recovered to 83% of the 2019 level. The recovery was accelerated after Chinese Government announced the reopening policy in mid-November. Breaking down into each month, our RevPAR in October, November and December 2022 recovered to 74%, 87% and 91% of the 2019 levels, respectively. The trend continued during the Spring Festival holiday with RevPAR recovered to roughly 95% of 2019 seven days’ holiday period.

Steigenberger Hotels GmbH and its subsidiaries (“DH”, or “Legacy-DH”) have experienced a seasonal slowdown of RevPAR recovery in Q4 2022. Blended RevPAR recovered to 110% of 2019 levels in Q4, driven by the Steigenberger hotels in Qatar and Egypt. Excluding the effects of the FIFA World Cup and the COP27 UN Climate Conference, the RevPAR recovered to 100% of 2019 levels. RevPAR recovery continues to be driven by ADR increases while occupancy levels still remain behind the levels achieved in 2019. The ongoing reduction of energy-related risks eases energy prices in Europe. However, inflation is continuing to impact operating costs. We will bridge the rising cost through further rate increases as well as an ongoing focus on cost reduction, process optimization and stringent cash management.

Operating Results: Legacy-Huazhu(1)

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 (3)

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 4930   1053
Leased and owned hotels 353   1
Manachised and franchised hotels 4577   1052
Midscale and upscale hotels 3481   1491
Leased and owned hotels 270   13
Manachised and franchised hotels 3211   1478
Total 8411   2544
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 % -4.3p.p.
Manachised and franchised hotels 68.4 % 76.4 % 66.6 % -1.8p.p.
Blended 68.2 % 76.0 % 66.2 % -2.0p.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 % -21.6p.p.
Manachised and franchised hotels 81.6 % 66.6 % -15.0p.p.
Blended 82.2 % 66.2 % -16.0p.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 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 % -6.7p.p.  
Manachised and franchised hotels 72.4 % 67.1 % -5.4p.p.  
Blended 72.2 % 66.7 % -5.5p.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 % -23.0p.p.
Manachised and franchised hotels 83.8 % 67.1 % -16.7p.p.
Blended 84.4 % 66.7 % -17.7p.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 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 yoy For the quarter yoy For the quarter yoy
  ended

December 31,

change ended

December 31,

change ended

December 31,

change
  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 yoy For the quarter yoy For the quarter yoy
  ended

December 31,

change ended

December 31,

change ended

December 31,

change
  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   yoy For the year   yoy For the year   yoy
  ended

December 31,

change ended

December 31,

change ended

December 31,

change
  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   yoy For the year yoy For the year yoy
  ended

December 31,

change ended

December 31,

change ended

December 31,

change
  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(6)

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(7)

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 due to repairment.

  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).

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’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. As of December 31, 2022, H World operates 13 percent of its hotel rooms under lease and ownership model, and 87 percent under manachise and franchise models.