H World Announces Q4 and Full Year of 2023 Operating Results
Full Year RevPAR in China Recovered to 122% of the 2019 Level
SINGAPORE and SHANGHAI, March 20, 2024 /PRNewswire/ -- H World Group Limited ("H World" or "the Group", NASDAQ: HTHT and HKEX: 1179) announced its unaudited financial results for the fourth quarter ("Q4 2023") and full year ended December 31, 2023.
Strong Recovery Momentum in Legacy-Huazhu: RevPAR of 2023 Recovers to 122% of 2019 Levels
Supported by the sustained recovery in both leisure and business travel demand, RevPAR in Q4 2023 recovered to 120% of the 2019 level for Legacy-Huazhu business (refers to H World's business in China). Breaking down into each month, the RevPAR in October, November and December 2023 recovered to 120%, 117% and 123% of the 2019 levels, respectively. Among them, the ADR was RMB284 in the fourth quarter of 2023, compared with RMB240 in the fourth quarter of 2022, RMB324 in the previous quarter, and RMB232 in the fourth quarter of 2019. The OCC for all the Legacy-Huazhu hotels in operation was 80.5%, with a year-on-year growth increased by 14.3 percentage points. For H World International (formerly known as DH), the ADR was EUR115, and the OCC for all H World International hotels in operation was 63.8%. Blended RevPAR was EUR73, recovered to 111% of the 2019 level.
Legacy-Huazhu's RevPAR in 2023 indicate a robust resurgence. Commencing from February 2023, each monthly RevPAR consistently surpasses the 115% relative to the recovery of the 2019 level. For the full year of 2023, Legacy-Huazhu's RevPAR reached 122% of the 2019 level. While the RevPAR growth in 2023 was primarily driven by ADR, H World also experienced continuous recovery in the occupancy rate.
Year-on-Year Revenue Surges Over 50%, Continues to Exceed Guidance
Relying on a sophisticated and efficient regional framework to rapidly expand the hotel network, gradually reaching resilient low-tier cities, H World consistently maintains a leading position in the limited-service market through high-quality products. In the fourth quarter of 2023, revenue was RMB5.6 billion (US$786 million), representing a 50.7% year-over-year increase. Revenue from the Legacy-Huazhu was RMB4.4 billion, representing a 59.0% year-over-year increase. Revenue from H World International in the fourth quarter of 2023 was RMB1.2 billion, representing a 26.6% year-over-year increase and a 2.2% sequential increase. The revenue growth for both the Group and Legacy-Huazhu exceeded the revenue guidance previously announced. Hotel turnover increased 55.0% year-over-year to RMB20.4 billion. Excluding H World International, hotel turnover increased 60.6% year-over-year in the fourth quarter of 2023. Net income attributable to H World Group Limited was RMB743 million (US$105 million), compared with a net loss attributable to H World Group Limited of RMB124 million in the fourth quarter of 2022. EBITDA (non-GAAP) in the fourth quarter of 2023 was RMB1.4 billion (US$191 million), compared with RMB529 million in the fourth quarter of 2022.
For the full year of 2023, the Group's Revenue increased 57.9% year-over-year to RMB21.9 billion (US$3.1 billion). Net income attributable to H World Group Limited was RMB4.1 billion (US$575 million), compared with a net loss attributable to H World Group Limited of RMB1.8 billion for the full year of 2022. EBITDA was RMB6.8 billion (US$961 million), compared with RMB164 million for the full year of 2022.
In November 2023, the Group declared approximately US$300 million cash dividend, which included US$200 million of regular dividend and US$100 million special dividend. The Group also repurchased about US$120 million shares from the market in 2023. As H World becomes more asset-light and cash-rich, they will continue to reward their shareholders through dividends and buybacks.
Focusing on Economy and Midscale Brands, the Number of Hotel Openings Reaches a Historic High
As of December 31, 2023, H World's worldwide hotel network in operation totaled 9,394 hotels and 912,444 rooms, including 131 hotels from H World International. The number of new openings by H World in China continues to accelerate. During the fourth quarter of 2023, Legacy-Huazhu opened 460 hotels. In 2023, for Legacy-Huazhu business, the number of hotels in new openings is 1,641, with an additional 3,061 hotels in the pipeline, marking a significant surge. H World seizes diverse accommodation needs through a multi-brand strategy, developing upper-midscale segment, continuously offering cost-effective and high-quality products to further meet the extensive demands of the essential market. As of the fourth quarter of 2023, the number of upper-midscale hotels in operation reached 645, with a 24% year-on-year increase and a 7% sequential increase. Simultaneously, the number of hotels in pipeline reached 386, with a 34% year-on-year increase and a 8% sequential increase. The number of hotels in operation and pipeline reaching 1,031, realizing the 1,000 hotels target set by H World in 2021. The Group will further accelerate high-quality network expansion by setting the gross hotel opening target of around 1,800 hotels in 2024.
As a leader in the Chinese chain hotel industry and one of the fastest-growing hotel groups globally, H World focuses on the core economy and midscale brands, actively expanding its hotel network. Leveraging organizational restructurings and the establishment of regional subsidiaries, H World effectively addressed underdeveloped areas, bolstering regional development and operational prowess, yielding staged operating outcomes. Looking ahead, Legacy-Huazhu will persist in its streamlined growth strategy, prioritizing service excellence by expanding premium establishments and deepening market penetration in lower-tier cities and underserved regions, particularly in limited-service hotels. This involves advancing brand quality through customer-centric sustainable quality growth and digitization-driven organizational upgrades. Concurrently, H World International will refine its strategic orientation towards asset-light transformation, cost reduction and efficiency improvement, and strengthening direct sales via H Reward global loyalty program. Additionally, it will explore growth opportunity in the Asia Pacific (APAC) and Middle East. The Group will continue to adhere to its sustainable and high-quality development path and sharpen its performance.
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.
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