On November 27th, Huazhu Group held a conference call for the release of its third quarter 2024 performance. During the performance conference call, Jin Hui, CEO of Huazhu Group, stated that the Chinese national hotel market remains the largest and most promising market, and is the foundation and cornerstone of Huazhu's business.
Huazhu Group's revenue change curve (source: Oriental Wealth)
According to the financial report, in the third quarter of 2024, Huazhu Group achieved a revenue of 6.4 billion yuan, a year-on-year increase of 2.4%; The hotel's revenue was 26 billion yuan, a year-on-year increase of 10.7%. From the revenue data, Huazhu's performance in the third quarter seems to be good. However, it should be pointed out that after experiencing a bottoming out rebound in OCC (hotel room occupancy rate) and a general increase in ADR (average daily room rate) in 2023, the Chinese hotel industry has entered an expected "correction period" this year. Especially in the recently passed third quarter, the core indicators of the hotel industry have all declined due to the impact of high base numbers.
At the same time, after entering 2024, the operating data of China's hotel industry gradually returns to normalcy. Among them, the decline in ADR data with high base is more significant. Huazhu China's business performance is not completely immune to fluctuations, but the overall situation is still better than the industry average. In the third quarter, Huazhu China's ADR was 301 yuan, compared to 324 yuan in the same period last year. Under the influence of ADR, Huazhu China's RevPAR (average rentable room revenue) was 256 yuan, compared to 278 yuan in the same period last year. However, with the good reputation accumulated by promoting quality improvement over the years and steadily advancing the development of the hotel network, Huazhu China's OCC remains very stable, maintaining a level of 84.9% in the third quarter.
According to hotel data service provider STR, the ADR indicators of hotels in mainland China have shown a year-on-year decline for three consecutive quarters since 2024, while OCC and RevPAR (average rentable room revenue) have also entered a downward trend.
According to financial report data, Huazhu China had 774 newly opened hotels in the third quarter, with a total of 1910 newly opened hotels in the first three quarters of this year. As of the end of the reporting period, Huazhu China had 10707 operating hotels with 1034859 guest rooms; At the same time, Huazhu China still has 2899 hotels waiting to open.
Jinhui stated that after reaching the milestone of 10000 hotels in the second quarter, it will continue to expand its high-quality network and open 774 new hotels in China in the third quarter of 2024. Looking ahead, we will continue to emphasize the importance of sustainable high-quality growth. Our goal is to expand our business in various regions of China and continue to penetrate lower tier cities in China, covering more of the Chinese hotel market with our high-quality hotel products and excellent services, "said Jin Hui.
On the basis of consolidating the basic market, Huazhu China has also orderly promoted its multi brand strategy with an enterprising spirit, seizing the development opportunities in the mid to high end hotel market. At the end of the third quarter, Huazhu China had over 800 mid to high end hotels in operation, a year-on-year increase of 33%; The number of hotels waiting to open was 487, a year-on-year increase of 36%; Among them, the total number of intercity hotels in China, including those in operation and those yet to open, has reached 125. Jinhui stated during the performance conference call that in the future, Huazhu will continue to launch high-quality and cost-effective limited service products, expand its coverage of the Chinese market, and further consolidate our leading position in the limited service field.
The growth path of Huazhu Group is very clear: in China, Huazhu China focuses on serving the mass market with economy and mid-range hotels as its core, accelerating coverage of lower tier cities, and attracting a wider range of consumer groups through quality improvement; On the international stage, Huazhu International continues to export high-quality products and services to the world with its excellent integration and execution capabilities. Huazhu, who walks on two legs, deserves attention for its performance throughout the year.
At the end of the third quarter, the average daily room rate of Huazhu International was 117 euros, a year-on-year increase of 2.5%; The occupancy rate was 69.8%, an increase of 0.8 percentage points year-on-year; The average revenue from rentable rooms was 82 euros, an increase of 3.7% year-on-year, achieving comprehensive growth.
As an important part of Huazhu Group's efforts to enhance its long-term competitiveness, Huazhu is actively exploring international development and seeking growth opportunities in the Asia Pacific region and the Middle East.