Shanghai-headquartered hotel giant H World Group Limited announced its unaudited financial results in the second quarter and the first half ended June 30, 2023.
Revenue increased 63.5% year-over-year to RMB5.5 billion (US$762 million) in the second quarter of 2023. Revenue from the Legacy-Huazhu segment in the second quarter of 2023 increased 76.6% year-over-year.
Net income attributable to H World Group Limited was RMB1.0 billion (US$138 million) in the second quarter of 2023, compared with a net loss attributable to H World Group Limited of RMB350 million in the second quarter of 2022.
Hotel turnover increased 72.0% year-over-year to RMB20.3 billion in the second quarter of 2023. Excluding Steigenberger Hotels GmbH and its subsidiaries (“DH”, or “Legacy-DH”), hotel turnover increased 78.1% year-over-year in the second quarter of 2023.
A total of 8,750 hotels or 844,417 hotel rooms in operation as of June 30, 2023.
Legacy-Huazhu Only – Second Quarter of 2023 Operational Highlights
As of June 30, 2023, Legacy-Huazhu had 8,622 hotels and 818,245 hotel rooms in operation
The ADR was RMB305 in the second quarter of 2023, compared with RMB236 in the second quarter of 2019.
The occupancy rate for all the Legacy-Huazhu hotels in operation was 81.8% in the second quarter of 2023, compared with 86.9% in the second quarter of 2019.
Blended RevPAR was RMB250 in the second quarter of 2023, compared with RMB206 in the second quarter of 2019.
Legacy-DH Only – Second Quarter of 2023 Operational Highlights
As of June 30, 2023, Legacy-DH had 128 hotels and 26,172 hotel rooms in operation.
The ADR was EUR117 in the second quarter of 2023, compared with EUR110 in the second quarter of 2022.
The occupancy rate for all Legacy-DH hotels in operation was 67.1% in the second quarter of 2023, compared with 59.8% in the second quarter of 2022.
Blended RevPAR was EUR78 in the second quarter of 2023, compared with EUR66 in the second quarter of 2022.
Jin Hui, CEO of H World commented: “We are pleased to deliver another quarter of strong results, as the growth of travel demand further strengthened in the second quarter. For our Legacy-Huazhu business, RevPAR in Q2 2023 recovered to 121% of the Q2 2019 level. Breaking down into monthly numbers, our RevPAR in April, May and June 2023 recovered to 127%, 115% and 123% of the 2019 levels of the corresponding months, respectively. The strong recovery continues to be largely driven by ADR growth in the second quarter, which reflected a combination of product mix change and product upgrades, as well as market penetration and synergy via our regional offices. Continued increases in our franchisees’ confidence level led us to enjoy a historical high signing of over 1,000 new hotels during the quarter.”
“Regarding our business outside China, our Legacy-DH business recovery improved sequentially as RevPAR recovered to 111% of the 2019 level and EBITDA turned positive in the second quarter.”
For the third quarter of 2023, H World expects its revenue growth to be in the range of 43%- 47% compared to the third quarter of 2022, or in the range of 49%-53% excluding DH.
H World raised its guidance for the full year of 2023, expecting revenue growth to be in the range of 48%-52% compared to the full year of 2022, and up from its previous guidance of 42%- 46%.
