Huazhu Group Ltd
NASDAQ:HTHT
Huazhu Group Ltd
Huazhu Group Ltd., founded in 2005 by visionary entrepreneur Qi Ji, has blossomed into a formidable force within the hospitality industry, standing as one of China’s largest hotel operators. Initially inspired by the rising demand for budget-friendly accommodations among China's middle class, Huazhu carved its niche by offering a wide array of hotel brands, each tailored to distinct customer segments. From the economic Hanting Hotel to the more upscale Joya Hotel brand, the company effectively taps into a range of consumer preferences, ensuring that travelers from all walks of life find fitting comfort under its umbrella. By 2023, Huazhu had not only cemented its dominance in China with thousands of properties under its management but expanded its footprint internationally through strategic acquisitions and partnerships, notably with its acquisition of Deutsche Hospitality, a move that opened doors to the European market.
In terms of operations, Huazhu employs an asset-light model that focuses on franchise and lease-and-operate arrangements, allowing it to accelerate growth without heavy capital outlays typical of hotel ownership. This efficiency is reflected in its revenue streams that primarily flow from room bookings, complemented by membership programs that bolster customer loyalty and frequent engagement. The group's model is further supported by digital innovations, leveraging robust IT infrastructure to streamline operations, enhance customer experience, and collect data insights. By continuously refining its offerings and tapping into technological advancements, Huazhu not only secures its income through high occupancy rates and consistent pricing strategies but also positions itself as a dynamic leader ready to capitalize on shifting travel trends in the post-pandemic landscape.
Revenue Growth: Q2 revenue grew 4.5% year-over-year to RMB 6.4 billion, near the top end of guidance.
Asset-Light Success: Manachised and franchised (M&F) revenue surged 22.8% year-over-year to RMB 2.9 billion, making up 64% of total gross operating profit.
Membership Expansion: H Rewards membership base reached nearly 290 million, up 17.5% year-over-year, with member bookings exceeding 60 million room nights.
Margin Improvement: Adjusted EBITDA rose 11.3% to RMB 2.3 billion, benefitting from cost optimization and a shift to asset-light operations.
RevPAR Weakness: RevPAR is expected to see a slight year-over-year decline in Q3 and full-year, reflecting supply increases and weak consumer demand, but revenue guidance remains intact.
Dividend & Buyback: Declared USD 250 million interim dividend (74% of H1 net profit) and completed about USD 62 million in share buybacks.
Guidance: Q3 group revenue expected to grow 2% to 6% year-over-year; M&F revenue expected up 20% to 24%.
You don't have any saved screeners yet
