Huazhu Group (HTHT. Nasdaq, 1179. HK) held a conference call on November 27th to announce its third quarter 2024 performance. In the third quarter, Huazhu Group's revenue increased to 6.4 billion yuan (RMB), a year-on-year increase of 2.4%; The hotel's revenue increased to 26 billion yuan, a year-on-year growth of 10.7%. The net profit attributable to the parent company was approximately 1.3 billion yuan, unchanged year-on-year.
In the third quarter, Huazhu Group had 10845 operating hotels. Among them, in the third quarter, Huazhu had 774 newly opened hotels in the Chinese market, and the cumulative number of newly opened hotels in the first three quarters of this year was 1910. As of the end of the reporting period, Huazhu China had 10707 operating hotels and 2899 hotels awaiting opening.
Huazhu China's OCC (occupancy rate) for the first three quarters of this year were 77.2%, 82.6%, and 84.9%, respectively.
The First Financial Journalist learned that after experiencing a bottoming out rebound in OCC and a general increase in ADR (Average Daily Rate) in 2023, the Chinese hotel industry has entered a "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.
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.
The decline in ADR from a high level has triggered an industry wide revenue adjustment, with a net profit attributable to shareholders of First Travel Hotels (600258. SH) of RMB 366 million in the third quarter, a year-on-year decrease of 9.54%. During the reporting period, the short-term debt pressure of First Travel Hotels increased, with a current ratio of 0.67 and accounts receivable exceeding RMB 300 million. Jinjiang Hotel (600754. SH) achieved a revenue of 3.898 billion yuan in the third quarter, a year-on-year decrease of 7.1%; The net profit attributable to shareholders of the listed company was 258 million yuan, a year-on-year decrease of 43.08%.
According to the third quarter report of Huazhu Group, although the ADR of Huazhu China was under pressure due to industry trends and to some extent affected the performance of RevPAR, the OCC of Huazhu China remained at 84.9% during the same period.
Huazhu Group's revenue in the third quarter rose by 10.7% against the trend to 26 billion yuan. Although the company's costs increased in the third quarter due to continuous expansion of its hotel network and one-time overseas restructuring, its net profit remained at 1.3 billion yuan, the same as the same period last year.
In terms of product structure, Huazhu continues to focus on economy and mid-range hotels. At the end of the third quarter, Huazhu China's economy and mid-range brands accounted for 91%, 80%, and 90% of operating hotels, upcoming hotels, and newly opened stores, respectively.
Overseas, at the end of the third quarter, Huazhu International's ADR was 117 euros, a year-on-year increase of 2.5%; OCC was 69.8%, an increase of 0.8 percentage points year-on-year; RevPAR was 82 euros, an increase of 3.7% year-on-year,
The Chinese national hotel market remains the largest and most promising market, as well as the foundation and cornerstone of Huazhu's business, "said Jin Hui, CEO of Huazhu Group, at the performance conference." In the future, we will continue to sort out our existing inventory, eliminate low-quality storefronts, and ensure further improvement in the overall quality of hotel products and services
According to data from Yingdie Consulting, as of the end of 2023, the hotel chain rate in China was 41%, an increase of 15 percentage points from 26% in 2019. However, compared to overseas markets, there is still significant room for improvement in the current hotel chain rate in China, which also means that the local market still has great potential for development.