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China Lodging Group, Limited Announces Its Preliminary Results for Hotel Operation in the Third Quarter of 2016

SHANGHAI, China, Oct. 18, 2016 (GLOBE NEWSWIRE) -- China Lodging Group, Limited (NASDAQ:HTHT) (“China Lodging Group”, “Huazhu”, or the “Company”), a leading and fast-growing multi-brand hotel group in China, today announced its preliminary results for the hotel operation in the third quarter ended September 30, 2016.

Operating Metrics

For the quarter ended
September 30,June 30,September 30,
2015 2016 2016
Occupancy rate (as a percentage)
Leased and owned hotels 91% 87% 90%
Manachised hotels 89% 85% 89%
Franchised hotels 73% 71% 74%
Blended 89% 85% 89%
Average daily room rate (1) (in RMB)
Leased and owned hotels 207 210 217
Manachised hotels 179 175 186
Franchised hotels 187 181 194
Blended 188 184 194
RevPAR (1) (in RMB)
Leased and owned hotels 188 182 195
Manachised hotels 159 150 166
Franchised hotels 137 128 144
Blended 167 157 173
(1) Value-added tax ("VAT") has been implemented for hospitality industry to replace business tax in China, effective May 1, 2016. The Company's room rates quoted and received from customers are tax-inclusive (business tax or VAT) before and after the implementation of VAT. For comparison purposes, the ADR and RevPAR disclosed in this release are based on the tax-inclusive rates.


Like-for-like performance for leased and manachised hotels opened for at least 18 months during the current quarter
As of and for the quarter ended
September 30, yoy
2015 2016 change
Total 2,050 2,050
Leased hotels 588 588
Manachised and franchised hotels 1,462 1,462
Occupancy rate (as a percentage) 91% 91% 0.2%
Average daily room rate (in RMB) 188 189 0.4%
RevPAR (in RMB) 171 172 0.5%

Hotel Development

Number of hotels in operation Number of rooms in operation
Opened Closed (2) Net added As of Net added As of
in Q3 2016in Q3 2016in Q3 2016September 30, 2016 in Q3 2016September 30, 2016
Leased and owned hotels8 (10) (2)625 3577,158
Manachised and franchised hotels 163 (77) 86 2,573 7,939245,627
Total 171 (87) 84 3,198 7,974 322,785
(2) The hotel closure in Q3 2016 was higher than the previous quarters because:
a) In order to increase the product qualities, Huazhu removed 44 of the manachised and franchised hotels related to HanTing, Hi Inn, Elan and Starway from Huazhu’s network for incompliances with the brand and operating standards.
b) Huazhu removed 15 franchised and 1 manachised hotels under ibis and ibis Styles brands after completion of legal procedures for termination. The financial impact from such removal is not significant because these hotels have not been integrated into Huazhu's operating platform for operation and management fee purposes.
Other common reasons for hotel closure including contract expiration, rezoning and others.


Number of hotels in pipeline
as of September 30, 2016
Leased hotels 23
Manachised and franchised hotels 482
Total(3) 505
(3) Including 38 hotels under brands of ibis, ibis Styles and Mercure.

Business Update by Segment

Hotel breakdown by segment
Number of hotels in operation
Net added As of
in Q3 2016September 30, 2016
Economy hotels 45 2,771
HanTing Hotel 44 2,149
Leased hotels - 492
Manachised hotels 43 1,656
Franchised hotels 1 1
Hi Inn 15 373
Leased hotels (1) 36
Manachised hotels 8 293
Franchised hotels 8 44
Elan Hotel (1) 179
Manachised hotels (3) 146
Franchised hotels 2 33
ibis Hotel (13) 70
Leased hotels - 13
Manachised hotels 1 14
Franchised hotels (14) 43
Midscale and upscale hotels 39 427
JI Hotel 27 256
Leased hotels - 78
Manachised hotels 27 176
Franchised hotels - 2
Starway Hotel 5 141
Leased hotels (1) 2
Manachised hotels 10 94
Franchised hotels (4) 45
Joya Hotel - 5
Leased hotels - 2
Manachised hotels - 3
Manxin Hotels & Resorts 1 3
Leased hotels (1) -
Manachised hotels 2 3
ibis Styles Hotel 2 8
Manachised hotels 3 5
Franchised hotels (1) 3
Mercure Hotel 3 11
Leased hotels 1 2
Manachised hotels 2 8
Franchised hotels - 1
Novotel Hotel 1 2
Manachised hotels - 1
Franchised hotels 1 1
Grand Mercure - 1
Franchised hotels - 1
Total 84 3,198


Same-hotel operational data by segment
Number of hotels in operationSame-hotel RevPAR Same-hotel ADR Same-hotel Occupancy
As ofFor the quarter ended For the quarter ended For the quarter ended
September 30,September 30,yoy
change
September 30,yoy
change
September 30,yoy
change
201520162015201620152016 2015 2016
Economy hotels 1,868 1,868161160 -0.8%177175 -0.8% 91% 91% 0.0%
Leased hotels 518 518167165 -0.9%184183 -0.5% 91% 90% -0.3%
Manachised and franchised hotels 1,350 1,350159157 -0.8%173171 -0.9% 92% 92% 0.1%
Midscale and upscale hotels 182 182245263 7.5%284299 5.5% 86% 88% 1.6%
Leased hotels 70 70285311 8.9%317339 6.9% 90% 92% 1.6%
Manachised and franchised hotels 112 112207218 5.7%250259 3.7% 83% 84% 1.6%
Total 2,050 2,050171172 0.5%188189 0.4% 91% 91% 0.2%

About China Lodging Group, Limited

China Lodging Group, Limited is a leading hotel operator and franchisor in China under 12 brand names. As of September 30, 2016, the Company had 3,198 hotels or 322,785 rooms in operation in 365 cities. With a primary focus on economy and midscale hotel segments, China Lodging Group’s brands include Hi Inn, HanTing Hotel, Elan Hotel, JI Hotel, Starway Hotel, Joya Hotel, and Manxin Hotels & Resorts. The Company also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in Pan-China region.

The Company’s business includes leased, manachised and franchised models. Under the lease model, the Company directly operates hotels typically located on leased properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers it appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees but does not appoint on-site hotel managers. The Company applies a consistent standard and platform across all of its hotels. As of September 30, 2016, China Lodging Group operates 24 percent of its hotel rooms under lease model, 76 percent under manachise and franchise models.

For more information, please visit the Company’s website: http://ir.huazhu.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; the expected growth of the lodging market in China; and other factors and risks detailed in our filings with the Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project,” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.

The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

Contact Information Ida Yu Sr. Manager of Investor Relations Tel: 86 (21) 6195 9561 Email: ir@huazhu.com http://ir.huazhu.com

Source:China Lodging Group, Limited