Hotel Operations - As of December 31, 2021, Huazhu operated a total of 7,830 hotels and 753,216 hotel rooms[1][11] - The company opened 1,507 manachised and franchised hotels in 2021, while closing 451[11] - The company operates 7,830 hotels with 753,216 rooms in 17 countries as of December 31, 2021, with 14% of rooms under lease and ownership model and 86% under manachise and franchise models[82][83] - The company had 2,571 unopened hotels in the pipeline as of December 31, 2021[106] - The total number of unopened hotels in the pipeline as of December 31, 2021, was 1,206, indicating ongoing market expansion[119] Financial Performance - Revenue for Q4 2021 was RMB3.4 billion (US$526 million), a 9.1% year-over-year increase, while full year revenue was RMB12.8 billion (US$2.0 billion), a 25.4% year-over-year increase[3][24] - Revenue for the full year of 2021 was RMB12.8 billion (US$2.0 billion), representing an increase of 25.4% from 2020[25] - Net loss attributable to Huazhu for Q4 2021 was RMB459 million (US$72 million), compared to a net income of RMB703 million in Q4 2020[4] - Net loss attributable to Huazhu Group Limited for the full year of 2021 was RMB465 million (US$73 million)[52] - Total revenue for the year ended December 31, 2021, was RMB 12,787 million, representing a 25.5% increase from RMB 10,196 million in 2020[89] Adjusted EBITDA and Operating Costs - Adjusted EBITDA (non-GAAP) for Q4 2021 was RMB278 million (US$43 million), compared to RMB375 million in Q4 2020; for the full year 2021, it was RMB1.6 billion (US$247 million) compared to negative RMB244 million in 2020[8] - EBITDA (non-GAAP) for the full year of 2021 was RMB1.4 billion (US$215 million), compared with a negative RMB631 million in 2020[57] - Hotel operating costs for the full year of 2021 were RMB11.3 billion (US$1.8 billion), compared to RMB9.7 billion in 2020[34] - Operating costs for the year ended December 31, 2021, totaled RMB 13,613 million, an increase from RMB 11,925 million in 2020, reflecting a rise of 14.1%[90] Revenue Breakdown - Revenue from Legacy-Huazhu segment for the full year of 2021 was RMB11.2 billion, representing a 29.8% year-over-year increase[25] - Revenue from leased and owned hotels for the full year of 2021 was RMB8.1 billion (US$1.3 billion), representing an increase of 17.5% from 2020[27] - Revenue from manachised and franchised hotels for the full year of 2021 was RMB4.4 billion (US$690 million), representing an increase of 40.2% from 2020[29] - Legacy-DH segment revenue for Q4 2021 was RMB574 million, a 129.6% year-over-year increase[24] Cash Flow and Assets - Operating cash inflow for Q4 2021 was RMB867 million (US$136 million) and for the full year 2021 was RMB1.3 billion (US$210 million), representing a 120.4% increase from 2020[58][59] - As of December 31, 2021, total cash and cash equivalents were RMB5.1 billion (US$803 million) with total debt balance of RMB9.8 billion (US$1.5 billion)[61] - Total current assets as of December 31, 2021, were RMB 9,553 million, a decrease from RMB 12,882 million as of December 31, 2020[86] - The company’s total assets as of December 31, 2021, were RMB 63,269 million, a decrease from RMB 65,155 million as of December 31, 2020[87] Future Outlook - For Q1 2022, Huazhu expects revenue growth of 11%-15% compared to Q1 2021, or 1%-5% excluding Legacy-DH[9] - Huazhu expects to open around 1,500 hotels and close 500-550 hotels in 2022, with revenue growth forecasted at 11%-15% for Q1 2022 and 15%-20% for the full year compared to 2021[67] - The guidance for future performance is uncertain due to the ongoing impact of the Omicron variant and China's "zero-COVID" policy[65] Market Conditions - The company maintains a long-term optimistic view on the Chinese lodging industry despite near-term uncertainties due to COVID-19[22] - RevPAR recovery in Q4 2021 was 90%, 76%, and 90% of October, November, and December 2019 levels, respectively, with January and February 2022 showing 75% and 83% recovery[62] Shareholder Information - The company may repurchase its securities, including American depositary shares and convertible notes, subject to market conditions[68] - The company’s share-based compensation expenses for the quarter were 15 million RMB, down from 31 million RMB in the previous quarter[97]

Huazhu Group Limited (NASDAQ:HTHT) Q3 2021 Earnings Conference Call November 24, 2021 8:00 PM ET Company Representatives JI Qi - Founder, Chairman Jin Hui - Chief Executive Officer Liu Xinxin - President Chen Hui - Chief Financial Officer Ye Fei - Deputy Chief Financial Officer Jason Chen - General Manager Conference Call Participants Billy Ng - Bank of America Simon Cheung - Goldman Sachs Operator Hello everyone! Thank you for standing by. Welcome to the Huazhu Group’s Q3 Earnings Conference Call. At this ...

Huazhu Group Limited (NASDAQ:HTHT) Q2 2021 Earnings Conference Call August 24, 2021 9:00 PM ET Company Participants Qi Ji - Founder and Chief Executive Officer Hui Jin - President Chen Hui - Chief Financial Officer Fei Ye - Deputy Chief Financial Officer Conference Call Participants Tian Hou - T.H. Capital, LLC Praveen Choudhary - Morgan Stanley Yulin Zhong - Haitong International Securities Group Limited Simon Cheung - Goldman Sachs Group, Inc. Operator Good day, and thank you for standing by. Welcome to t ...

Financial Data and Key Metrics Changes - In Q1 2021, total hotel turnover grew by 66% year-on-year to RMB 8.2 billion, primarily due to network expansion and a low base from the previous year [25] - Adjusted net loss narrowed to RMB 451 million from RMB 1.1 billion a year ago, while legacy Huazhu recorded an adjusted net loss of RMB 150 million compared to RMB 981 million loss in Q1 2020 [31] - Legacy Huazhu's blended RevPAR for Q1 is RMB 138, recovering to 77% of 2019 levels, with ADR recovering to 95% of 2019 levels at RMB 209 [25][26] Business Line Data and Key Metrics Changes - Hotel rooms expanded by 15% in Q1 2021 to 662,000 compared to 575,000 in Q1 2020, with legacy Huazhu hotels expanding by 18% year-on-year [24] - Revenue from manachised and franchised hotels grew by 93% to RMB 897 million, driven by legacy Huazhu's growth [27] - Leased and owned revenue decreased by 8% year-on-year to RMB 1.4 billion, mainly due to a decrease in leased hotels in Europe [27] Market Data and Key Metrics Changes - RevPAR in lower-tier cities exceeded 2019 levels, with Tier 3 cities showing strong recovery [13] - As of March 2021, 38% of hotels in operation were located in Tier 3 and below cities, with 54% of pipelines from lower-tier cities [14] - Corporate customers contributed 9.7% of total room nights sold, with room nights from corporate customers reaching over 3.5 million [22] Company Strategy and Development Direction - The company emphasizes a quality hotel expansion strategy, focusing on improving standards for both existing and new hotels [10] - The acquisition of CitiGo Hotel aims to enhance the lifestyle brand portfolio and target younger generations [15] - The company plans to revise down its non-standardized hotel brand openings for the full year, focusing on quality over quantity [36] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of China's economy and business travel as vaccination rates increase [7] - The company remains cautiously optimistic about recovery trends despite ongoing COVID-19 resurgence in some areas [40] - For Q2 2021, total revenue is expected to grow by 87% to 89% compared to Q2 2020, with a 27% to 29% growth compared to the same period in 2019 [35] Other Important Information - The company maintained a cash balance of RMB 5.7 billion and unutilized bank facilities of RMB 6.5 billion, allowing for further debt repayment and unforeseen circumstances [31] - The average occupancy of the legacy DH business was 19% in Q1, with expectations for gradual recovery as travel restrictions ease [32] Q&A Session Summary Question: Current trend in May and RevPAR growth excluding holidays - Management confirmed that RevPAR in May showed satisfactory growth, achieving positive growth even when excluding holiday periods [40] Question: Confidence in achieving 10,000 hotels target by end of 2022 - Management remains confident in achieving the target, with new signings improving compared to last year [42] Question: Corporate customer contribution outlook - Corporate customers currently contribute about 10% of total room nights, with optimism for future growth through technology and direct sales [52] Question: Acquisition plans and market consolidation post-COVID - Management is open to M&A opportunities but has no confirmed targets yet, focusing on quality hotel strategy and market share growth [55]

Hotel Operations and Development - As of December 31, 2020, the total number of operating hotels reached 6,789, representing a compound annual growth rate (CAGR) of 26.7% from 4,230 hotels as of December 31, 2018[3]. - The company has a total of 652,162 hotel rooms across its operating hotels as of December 31, 2020[3]. - The company is developing 2,449 new hotels, including 44 leased and owned hotels and 2,405 management franchise hotels[3]. - From December 31, 2018, to December 31, 2020, the company net added 2,559 hotels, with 97.9% being management franchise and franchised hotels[5]. - The hotel network expanded to 6,789 hotels across 32 provinces and municipalities in Greater China and 15 other countries as of December 31, 2020[9]. - The number of managed franchise hotels increased significantly from 1,376 in 2014 to 5,746 in 2020[8]. - As of December 31, 2020, the company operated 6,667 hotels in China, with approximately 99% of Legacy Huazhu hotels having resumed operations after COVID-19 disruptions[13]. - The company had 753 leased hotels and 7 owned hotels, accounting for about 11.1% of its operating hotels as of December 31, 2020[14]. - The company managed 5,746 franchised hotels and 290 licensed hotels, representing approximately 84.6% and 4.3% of its operating hotels, respectively[16]. - The company operates over 20 distinct hotel brands, catering to various market segments, including economy, midscale, and upscale[3]. Financial Performance - In 2020, the company reported a net income of RMB 10,196 million (approximately USD 1,563 million), a decrease from RMB 11,212 million in 2019, primarily due to the impact of COVID-19[6]. - The adjusted EBITDA for 2020 was negative RMB 244 million (approximately USD 35 million), compared to RMB 3,349 million in 2019[6]. - The company reported a net loss of RMB 2,204 million in 2020, compared to a net profit of RMB 1,761 million in 2019[103]. - Net revenue for 2020 was RMB 10,196 million, a decrease of 9.0% compared to RMB 11,212 million in 2019[103]. - Operating costs and expenses increased to RMB 11,925 million in 2020, up 29.0% from RMB 9,236 million in 2019[103]. - The company’s basic earnings per share (EPS) for 2020 was a loss of RMB 7.49, compared to a profit of RMB 6.22 in 2019[103]. - The company’s net profit attributable to the parent company for 2020 was a loss of RMB 2,192 million, compared to a profit of RMB 1,769 million in 2019[138]. - The company generated net cash from operating activities of RMB 609 million in 2020, a decrease from RMB 3,293 million in 2019[105]. - The company incurred interest expenses of RMB 533 million in 2020, up from RMB 315 million in 2019[138]. Impact of COVID-19 - The company has engaged in discussions with property owners to negotiate rent reductions and defer rent payments to mitigate the impact of COVID-19[14]. - The company implemented various preventive measures, including contactless services, to protect employees and customers amid the pandemic[59]. - The effective control of COVID-19 in China has led to a gradual recovery in domestic travel demand, particularly in previously affected cities[59]. - The company provided temporary franchise fee reductions and assisted franchisees in obtaining low-interest bank loans to meet short-term operational funding needs[59]. - During the peak period in February 2020, over 2,000 hotels were temporarily closed due to COVID-19, with 369 hotels still closed as of March 31, 2020, out of a total of 5,838 hotels in China[59]. Digital Transformation and Technology - The company has established a comprehensive modular application system to enhance customer experience and operational efficiency[5]. - The company has implemented a digital transformation plan to optimize operational efficiency and cost structure across its hotels[5]. - The company has developed an advanced proprietary technology infrastructure and digital transformation plan, utilizing big data, AI, and IoT to enhance operational efficiency[47]. - The company monitors hotel performance in real-time through a cloud-based property management system, allowing for quick adjustments to sales strategies[45]. - The "Easy" series digital systems streamline hotel operations, significantly reducing the turnaround time between check-out and check-in[50]. Loyalty Program and Customer Engagement - The loyalty program, Huazhu Club, has over 169 million members as of December 31, 2020, contributing to approximately 74% of room nights sold in 2020[4]. - The integrated CRM system maintains data on Huzhu Club members, including booking history and consumption patterns, enhancing customer loyalty through targeted promotions[48]. - The company collaborates with leading financial institutions and airlines for joint promotions to recruit new loyalty program members[53]. Environmental and Sustainability Initiatives - The company is committed to reducing its environmental footprint through energy-saving initiatives, including the use of LED lights and eco-friendly systems in most hotels[58]. - An online energy consumption management system has been established to track energy usage accurately, helping to monitor consumption levels and detect anomalies[58]. - The company encourages guests staying more than one night to reuse towels and linens to promote sustainability[58]. Legal and Regulatory Compliance - The company must obtain a public health permit before opening hotels, with penalties for non-compliance including fines ranging from RMB 50,000 to RMB 100,000[63]. - The company is required to comply with consumer protection laws, ensuring the safety of goods and services and obtaining consumer consent for data collection[68]. - The company is subject to strict regulations regarding foreign investment and mergers, requiring security reviews for transactions that may affect national security[87]. Future Outlook and Strategic Goals - The company aims to expand its market share in the growing global accommodation industry[6]. - The company is actively seeking new business opportunities, such as providing hotel services to support government pandemic control efforts[60]. - The company is exploring potential acquisitions to enhance its service offerings, with a budget of up to RMB 500 million allocated for this purpose[73]. - The company has set a goal to reduce operational costs by 15% through efficiency improvements and technology upgrades[71].