Caixin News Agency, August 21st (Reporter Xu Cihao) As the tourism market continues to recover, related listed companies are also experiencing revenue growth. Huazhu Hotels Group has released its second quarter financial report and semi annual report as of June 30, 2024.
According to the financial report, in the second quarter of this year, Huazhu Group's total revenue was about 6.1 billion yuan, a year-on-year increase of 11.2%; The net profit attributable to the parent company is approximately 1.1 billion yuan, a year-on-year increase of 10%; The revenue was approximately 23.4 billion yuan, a year-on-year increase of 15.5%. In the first half of the year, Huazhu Group's total revenue was about 11.4 billion yuan, a year-on-year increase of 14.1%. Among them, the revenue from Huazhu China branch was about 9.1 billion yuan, a year-on-year increase of 14.3%; The revenue from Huazhu International Branch is about 2.4 billion yuan, a year-on-year increase of 13.7%. The net profit attributable to the parent company was approximately 1.7 billion yuan, a year-on-year decrease of 15%.
It is worth mentioning that Huazhu Group successfully opened 10000 stores within this quarter. The Chinese market contains enormous opportunities and growth potential, and Huazhu will have a positive outlook on the Chinese market with its advantages in brand, products, and investment, "said Jin Hui, CEO of Huazhu Group, in a earnings analyst call this morning. This year, Huazhu will focus on service transformation to cope with homogeneous competition in the industry.
As of press time, Huazhu Group's US stock market closed at $27.67, down 4.65%, with a current market value of $8.683 billion; Huazhu Group's Hong Kong stock closed at HKD 22.1, down 2%, with a market value of HKD 69.342 billion.
Daily average room rate and occupancy rate increase
The hotel revenue of Huazhu Group refers to the total transaction value of room and non room revenue (i.e. leasing, managing franchise and franchised hotels) from its affiliated hotels.
According to the financial report, Huazhu Group achieved a hotel revenue of 23.4 billion yuan in the second quarter of this year, a year-on-year increase of 15.5%. Among them, the hotel revenue of Huazhu China Branch and Huazhu International Branch increased by 16.2% and 7.8% respectively year-on-year.
The New Consumer Daily noted that the increase in hotel revenue of Huazhu Group is mainly due to the rise in daily average room rates and occupancy rates.
The average daily room price of Huazhu China branch in the second quarter of this year was 290 yuan, compared to 305 yuan in the same period last year and 280 yuan in the previous quarter; The occupancy rate was 82.6%, compared to 81.8% in the same period last year and 77.2% in the previous quarter. Overall, all Huazhu hotels that have been in operation for at least 18 months had an average same hotel room rental income of 248 yuan in the second quarter of this year, a decrease of 3.6% from the same period last year's 257 yuan. However, the average daily room rate in the same hotel decreased by 4.1%, but the same hotel occupancy rate increased by 0.4 percentage points.
Although the overall performance of the entire industry is not as good as last year, Huazhu has already performed better than most companies in the industry, "said Peng Han, chief analyst of Global Travel News, analyzing to reporters. Overall, the second quarter is generally not as good as the first quarter, because the first quarter also has a Spring Festival, which is the peak of industry performance.
It is worth mentioning that according to statistics, the average operating revenue of the hotel industry nationwide is expected to decline by about 10% year-on-year in July and August this year.
Macro consumption is sluggish and high-end consumption demand is weakening. Considering that the third quarter of last year was the first peak consumption season after the epidemic, which brought a high base, and some regions have added more supply this year, it is expected that the hotel industry will gradually return to a healthier and more sustainable development trend in the third quarter, "said Jin Hui, CEO of Huazhu Group, on the phone of the financial report performance analyst this morning.
As of the end of the second quarter, Huazhu Group had 10286 operating hotels worldwide, with 1.0019 million hotel rooms and 3294 hotels awaiting opening. Among them, Huazhu China has 10150 operating hotels and 567 newly opened hotels in the second quarter.
In terms of strategic layout, Huazhu continues to penetrate into low tier cities where accommodation needs have not been fully met, outputting high-quality supply and filling the gap in the local chain hotel industry market. Nowadays, hotels under Huazhu's brands such as Hanting, Quanji, Orange, Xingcheng, Haiyou, and Ibis have gathered along the 318 National Highway. In many lower tier cities, Huazhu has also opened its first brand store.
The hotel industry in China has matured and there is an oversupply, but high-quality services are still scarce, "Jin Hui said on the phone of the financial report performance analyst. Huazhu is implementing a comprehensive market expansion plan, actively expanding not only in the sinking market, but also in the mid to high end market, especially in the expansion of the brand throughout the season.
Huazhu International promotes light asset transformation
From the performance of the first half of the year, Huazhu International's revenue was 2.353 billion yuan, a year-on-year increase of 13.7%. In terms of operating profit, Huazhu International's operating revenue in the first half of this year was 55 million yuan, which is slightly lower than the loss of 123 million yuan in the same period last year.
It is worth mentioning that, thanks to the impact of the European Championship, Huazhu International's operating indicators in the second quarter showed a significant improvement, with three key operating indicators, average rentable room revenue (RevPAR), average daily room rate (ADR), and occupancy rate (OCC), all achieving a month on month increase.
According to the financial report, the average daily room rate of Huazhu International in the second quarter of this year was 120 euros, slightly up from 117 euros in the same period last year and 104 euros in the previous quarter; The occupancy rate was 68.3%, an increase from 67.1% in the same period last year and 55.8% in the previous quarter.
According to the financial report, as of June 30, 2024, Huazhu International had a total of 136 operating hotels, including 87 rental hotels and 49 managed franchise and franchised hotels, with a total of 27552 operating hotel rooms, including 16789 hotel rooms under the rental model and 10763 hotel rooms under the managed franchise and franchised model.
In addition, Huazhu International has 28 hotels waiting to open, including 13 rental hotels and 15 managed franchise and franchised hotels.
In its latest overseas expansion plan, Huazhu Group has recently signed five new projects. Among them, Huazhu International recently signed an agreement with Tantakitt Co., Ltd. from Thailand to jointly open Thailand's first Shangri La Hotel in Surangam, Bangkok; At the same time, an agreement was also signed for the construction of the Bayum Lake Resort Hotel on the shores of Lake Karen in Egypt.
Regarding the future strategy of Huazhu International in terms of investor relations, Jinhui stated during the analyst conference call that Huazhu International has a large number of leased properties and is undergoing a transformation towards a light asset strategy; Simultaneously achieving sustained and stable cash flow and profits through cost control and efficiency improvement.
Based on Huazhu International's products and offerings, we hope to expand our stores in the Middle East and Asia Pacific, "said Jinhui.