H World Group announces 2022 annual results
Revenue climbed a 8.4% YoY growth in 2022 driven by strong rebound in international business
SINGAPORE and SHANGHAI, March 28, 2023 /PRNewswire/ -- H World Group(NASDAQ: HTHT and HKEX: 1179)(the Group) announced its annual results for the year ended 31 December 2022. For the year 2022, the Group achieved revenue of RMB13.9 billion, representing an increase of 8.4% compared to 2021.
According to the Group, the reopening of China announced in mid-November put the domestic economy back on its feet and led to increased demand for business travel, resulting in an accelerated recovery of its business in the country. In the fourth quarter of 2022, the Group recorded revenue of RMB3.7 billion, representing a year-on-year increase of 10.7%.
He Jihong, the Group's Chief Financial Officer, said, "Despite the challenges posed by the Covid-19 pandemic in China, the Group was able to achieve Adjusted EBITDA of RMB 610 million, Adjusted EBITDA before non-cash impairment and forex loss was RMB 1.74 billion. This accomplishment can be attributed to the strong recovery of our international business, as well as rigorous cost reduction efforts across the Group implemented both at the hotel level and within our headquarters. "
Strong recovery of international business
Since the opening of Europe in mid-February, H World Group's European business has recovered strongly. In 2022, the Average Daily Rate (ADR) and full-year blended revenue per available room (RevPAR) of Deutsche Hospitality (DH) were up 22.9% and 96.2% year-on-year respectively. Meanwhile, the blended revenue per available room (RevPAR) in the fourth quarter rebounded to 110% of 2019's performance level, driven by the performance of Steigenberger hotels in Qatar and Egypt.
Revenue from the Legacy-DH segment for the year 2022 was RMB3.2 billion, representing an increase of 108.5% year-on-year. Adjusted EBITDA of RMB134 million before impairment and unrealized losses was achieved, showing a positive turnaround on operational level thanks to successful cost management and efficiency improvements.
Going forward, DH will continue to pursue its membership growth strategy(i.e. loyalty program H Rewards) and increase the share of direct sales channels, while further improving management efficiency and reducing operating costs through digitalization.
Continue to penetrate lower-tier markets while accelerating development of midscale and upscale hotels
As of 31 December 2022, H World Group owned a network of 8,543 operating hotels and 809,478 rooms worldwide, including DH's 132 hotels.
Over the past year, the Group continued its expansion plan and efficiently opened 1,244 new hotels. As of 31 December 2022, the Group had 2,580 hotels under development, including 2,544 hotels of Legacy-Huazhu business and 36 hotels of Legacy-DH business.
H World Group adheres to its sustainable quality growth strategy, while continuing to cultivate the Chinese market and penetrate into lower-tier cities. According to the Group, the percentage of hotels operating in third-tier cities and below was 38%, while the percentage of hotels under development was 57%. The Group had already achieved coverage in 1,126 cities.
In addition, the Group continued to develop midscale and upper-midscale brands. At the end of the report period, the Group had 523 upper-midscale hotels in operation and 287 hotels under development.
Looking ahead to 2023, the Group expects to open 1,400 new hotels and expects revenue growth of between 42% to 46%.
Jin Hui, the Group's Chief Executive Officer, said, "While we recognize that 2022 presented many obstacles, we remain optimistic about the future of the hotel industry. We do believe that Spring is in the air and that the worst is behind us. The Group strives for our sustainable quality growth strategy. As such, H World Group is excited to embark on a new journey."
About H World Group
Originated in China, H World Group Limited is a key player in the global hotel industry. At the end of 2022, H World Group operated 8,543 hotels in 17 countries, covering 31 hotel and apartment brands from budget to luxury markets. It had 809,478 rooms in operation, providing consumers with a diverse range of accommodation experiences. 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. H World applies a consistent standard and platform across all of its hotels. As of December 31, 2022, H World operates 13 percent of its hotel rooms under lease and ownership model, and 87 percent under manachise and franchise models.
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SOURCE H World Group
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