H World Group Limited Reports Third Quarter of 2024 Unaudited Financial Results
-- A total of 10,845 hotels or 1,062,546 hotel rooms in operation as of
September 30, 2024.
-- Hotel turnover1 increased 10.7% year-over-year to RMB26.0 billion in the
third quarter of 2024. Excluding Steigenberger Hotels GmbH and its
subsidiaries (which are collectively referred to as Deutsche Hospitality,
"DH", or "Legacy-DH"), hotel turnover from the Legacy-Huazhu ("Huazhu")
segment increased 11.0% year-over-year in the third quarter of 2024; and
hotel turnover from the Legacy-DH segment increased 7.8% year-over-year
in the third quarter of 2024.
-- Revenue increased 2.4% year-over-year to RMB6.4 billion (US$918 million)2
in the third quarter of 2024, within the previously announced 2% to 5%
revenue increase guidance as compared to the third quarter of 2023.
Revenue from the Legacy-Huazhu segment in the third quarter of 2024
increased 1.0% year-over-year, in line with the previously announced 1%
to 4% guidance; and revenue from the Legacy-DH segment in the third
quarter of 2024 increased 8.9% year-over-year.
-- Net income attributable to H World Group Limited was RMB1.3 billion
(US$181 million) in the third quarter of 2024, compared with RMB1.3
billion in the third quarter of 2023 and RMB1.1 billion in the previous
quarter. Net income attributable to H World Group Limited from the
Legacy-Huazhu segment was RMB1.4 billion in the third quarter of 2024,
compared with RMB1.4 billion in the third quarter of 2023 and RMB1.0
billion in the previous quarter. Net loss attributable to H World Group
Limited from the Legacy-DH segment was RMB83 million, which included
RMB81 million of one-off restructuring costs, in the third quarter of
2024, compared with a net loss of RMB37 million in the third quarter of
2023 and a net income of RMB34 million in the previous quarter.
-- EBITDA (non-GAAP) in the third quarter of 2024 was RMB2.0 billion (US$286
million), compared with RMB2.1 billion in the third quarter of 2023 and
RMB1.9 billion in the previous quarter.
-- Adjusted EBITDA (non-GAAP), which excluded share-based compensation
expenses, gain (loss) from fair value changes of equity securities, net
foreign exchange gain (loss), and gain (loss) on disposal of investments
from EBITDA (non-GAAP), was RMB2.1 billion (US$300 million) in the third
quarter of 2024, compared with RMB2.3 billion in the third quarter of
2023 and RMB2.0 billion in the previous quarter.
-- Adjusted EBITDA by segment is our segment measure. Adjusted EBITDA from
the Legacy-Huazhu segment was RMB2.1 billion in the third quarter of
2024, compared with RMB2.3 billion in the third quarter of 2023 and
RMB1.9 billion in the previous quarter. Adjusted EBITDA from the
Legacy-DH segment was RMB21 million in the third quarter of 2024,
compared with RMB73 million in the third quarter of 2023 and RMB131
million in the previous quarter.
-- For the fourth quarter of 2024, H World expects its revenue growth to be
in the range of 1%-5% compared to the fourth quarter of 2023, and also in
the range of 1%-5% excluding DH.
SINGAPORE and SHANGHAI, Nov. 26, 2024 (GLOBE NEWSWIRE) -- H World Group Limited (NASDAQ: HTHT and HKEX: 1179) ("H World", the "Company", "we" or "our"), a key player in the global hotel industry, today announced its unaudited financial results for the third quarter ended September 30, 2024.
As of September 30, 2024, H World's worldwide hotel network in operation totaled 10,845 hotels and 1,062,546 rooms, including 138 hotels and 27,687 rooms from DH. During the third quarter of 2024, our Legacy-Huazhu business opened 774 hotels, including 3 leased and owned hotels, and 771 manachised and franchised hotels, and closed a total of 217 hotels, including 25 leased and owned hotels and 192 manachised and franchised hotels. As of September 30, 2024, H World had a total of 2,925 unopened hotels in the pipeline, including 2,899 hotels from the Legacy-Huazhu business and 26 hotels from the Legacy-DH business.
Legacy-Huazhu -- Third Quarter of 2024 Operational Highlights
As of September 30, 2024, Legacy-Huazhu had 10,707 hotels in operation, including 570 leased and owned hotels, and 10,137 manachised and franchised hotels. In addition, as of the same date, Legacy-Huazhu had 1,034,859 hotel rooms in operation, including 83,861 rooms under the lease and ownership model, and 950,998 rooms under the manachise and franchise models. Legacy-Huazhu also had 2,899 unopened hotels in its pipeline, including 6 leased and owned hotels, and 2,893 manachised and franchised hotels. The following discusses Legacy-Huazhu's revenue per available room ("RevPAR"), average daily room rate ("ADR") and occupancy rate for leased and owned Huazhu hotels, as well as manachised and franchised Huazhu hotels for the periods indicated.
-- The ADR was RMB301 in the third quarter of 2024, compared with RMB324 in
the third quarter of 2023 and RMB296 in the previous quarter.
-- The occupancy rate for all the Legacy-Huazhu hotels in operation was
84.9% in the third quarter of 2024, compared with 85.9% in the third
quarter of 2023 and 82.6% in the previous quarter.
-- Blended RevPAR was RMB256 in the third quarter of 2024, compared with
RMB278 in the third quarter of 2023 and RMB244 in the previous quarter.
-- For all the Legacy-Huazhu hotels which had been in operation for at least
18 months, the same-hotel RevPAR was RMB258 in the third quarter of 2024,
representing a 10.3% decline from RMB288 in the third quarter of 2023,
with an 8.4% decrease in same-hotel ADR and a 1.8 percentage-point
decrease in same-hotel occupancy rate.
Legacy-DH -- Third Quarter of 2024 Operational Highlights
As of September 30, 2024, Legacy-DH had 138 hotels in operation, including 77 leased hotels, and 61 manachised and franchised hotels. In addition, as of the same date, Legacy-DH had 27,687 hotel rooms in operation, including 15,700 rooms under the lease model, and 11,987 rooms under the manachise and franchise models. Legacy-DH also had 26 unopened hotels in the pipeline, including 12 leased hotels and 14 manachised and franchised hotels. The following discusses Legacy-DH's RevPAR, ADR and occupancy rate for leased as well as manachised and franchised DH hotels (excluding hotels temporarily closed) for the periods indicated.
-- The ADR was EUR117 in the third quarter of 2024, compared with EUR114 in
the third quarter of 2023 and EUR120 in the previous quarter.
-- The occupancy rate for all Legacy-DH hotels in operation was 69.8% in the
third quarter of 2024, compared with 69.0% in the third quarter of 2023
and 68.3% in the previous quarter.
-- Blended RevPAR was EUR82 in the third quarter of 2024, compared with
EUR79 in the third quarter of 2023 and EUR82 in the previous quarter.
Jin Hui, CEO of H World commented: "After reaching the milestone of 10,000 hotels in the second quarter, we continued our fast-paced, high-quality network growth and opened 774 new hotels in China in the third quarter of 2024. This quarter, Legacy-Huazhu's blended RevPAR declined by 8% year-over-year primarily due to a high ADR base in the same period last year and unfavorable weather. Our occupancy rate remained solid at 85% despite our ongoing rapid hotel network expansion. Going forward, we will continue to emphasize the importance of sustainable high-quality growth. We aim to expand our presence across all regions and continue penetrating into lower-tier cities in China, thereby reaching more of China's hotel market with our high-quality hotel products with excellent services."
"Regarding our business outside China, our Legacy-DH business recorded a 3.7% year-over-year blended RevPAR increase in the third quarter of 2024. We continued focusing on cost reduction in our European business, while at the same time seeking growth opportunities in the Asia-Pacific (APAC) and in the Middle East areas."
Third Quarter of 2024 Unaudited Financial Results
(RMB in millions) Q3 2023 Q2 2024 Q3 2024 --------------------------------- Revenue: Leased and owned hotels 3,878 3,681 3,690 Manachised and franchised hotels 2,268 2,334 2,602 Others 142 133 150 Total revenue 6,288 6,148 6,442
Revenue in the third quarter of 2024 was RMB6.4 billion (US$918 million), representing a 2.4% year-over-year increase and a 4.8% quarter-over-quarter increase. Revenue from the Legacy-Huazhu segment in the third quarter of 2024 was RMB5.2 billion, representing a 1.0% year-over-year increase and a 6.9% quarter-over-quarter increase. Our year-over-year revenue growth rate was negatively affected by our selected closures of several underperforming leased and owned hotels, as well as the decline in RevPAR. Revenue from the Legacy-DH segment in the third quarter of 2024 was RMB1.3 billion, representing an 8.9% year-over-year increase and a 3.0% quarter-over-quarter decrease. The year-over-year increase was attributable to both business recovery and our network expansion.
Revenue from leased and owned hotels in the third quarter of 2024 was RMB3.7 billion (US$526 million), representing a 4.8% year-over-year decrease and a 0.2% quarter-over-quarter increase. Revenue from leased and owned hotels from the Legacy-Huazhu segment in the third quarter of 2024 was RMB2.5 billion, representing a 10.4% year-over-year decrease, due mainly to our selected closures of several underperforming leased and owned hotels in operation. Revenue from leased hotels from the Legacy-DH segment in the third quarter of 2024 was RMB1.2 billion, representing an 8.8% year-over-year increase.
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