H World Announces Q4 and Full Year of 2023 Operating Results
- RevPAR in Q4 2023 for Legacy-Huazhu business recovered to 120% of the 2019 level, with ADR increasing to RMB284.
- Legacy-Huazhu's RevPAR in 2023 reached 122% of the 2019 level, driven by ADR growth and continuous recovery in occupancy rate.
- Revenue in Q4 2023 was RMB5.6 billion, a 50.7% increase year-over-year, with Legacy-Huazhu revenue increasing by 59.0%.
- Net income attributable to H World Group was RMB743 million in Q4 2023, compared to a net loss of RMB124 million in Q4 2022.
- For the full year of 2023, the Group's revenue increased by 57.9% year-over-year to RMB21.9 billion, with net income of RMB4.1 billion.
- None.
The reported recovery in Revenue per Available Room (RevPAR) for H World Group Limited is a significant indicator of the post-pandemic resurgence in the hospitality sector, particularly in China. The increase to 122% of 2019 levels suggests a strong rebound in consumer confidence and travel activity, likely spurred by easing travel restrictions and pent-up demand. This rebound is a testament to the company's strategic positioning and could signal a broader recovery trend within the industry.
It's noteworthy that the Average Daily Rate (ADR) and Occupancy (OCC) rates have contributed to this growth, implying a balanced recovery driven by both price and volume. The robust year-on-year revenue surge of over 50% and the outperformance of the company's revenue guidance are indicative of operational efficiency and market demand alignment. The strategic expansion into resilient low-tier cities may have played a role in capturing new market segments and diversifying revenue streams.
The financial performance of H World Group Limited, as evidenced by the significant increase in net income and EBITDA, reflects strong operational leverage and cost management. The transition from a net loss in 2022 to substantial profitability in 2023 is a clear indicator of effective turnaround strategies and possibly improved margins. This performance also provides a healthy financial position for the company, as demonstrated by the declared cash dividend, which includes a substantial special dividend, signaling confidence in the company's cash flow and financial stability.
Investors might view the repurchase of shares as a positive signal regarding the company's valuation and management's belief in the intrinsic value of the company. However, it is essential to monitor how these capital allocation decisions impact the company's long-term growth prospects and whether they align with shareholder interests.
The reported figures for H World Group Limited underscore the resilience of the hospitality sector, particularly in the limited-service market where the company maintains a leading position. The emphasis on high-quality products and the sophisticated regional framework for expansion are likely contributing factors to the company's strong performance. The growth in both ADR and OCC signifies a competitive edge in pricing power and customer retention.
As the company expands its hotel network, it is important to maintain service standards and operational efficiency to sustain growth. The focus on low-tier cities is an interesting strategy that could mitigate risks associated with over-reliance on top-tier markets and tap into the growing domestic travel market in China. This strategy could provide a blueprint for other hospitality companies looking to diversify and strengthen their market presence.
Full Year RevPAR in China Recovered to 122% of the 2019 Level
Strong Recovery Momentum in Legacy-Huazhu: RevPAR of 2023 Recovers to
Supported by the sustained recovery in both leisure and business travel demand, RevPAR in Q4 2023 recovered to
Legacy-Huazhu's RevPAR in 2023 indicate a robust resurgence. Commencing from February 2023, each monthly RevPAR consistently surpasses the
Year-on-Year Revenue Surges Over
Relying on a sophisticated and efficient regional framework to rapidly expand the hotel network, gradually reaching resilient low-tier cities, H World consistently maintains a leading position in the limited-service market through high-quality products. In the fourth quarter of 2023, revenue was
For the full year of 2023, the Group's Revenue increased
In November 2023, the Group declared approximately
Focusing on Economy and Midscale Brands, the Number of Hotel Openings Reaches a Historic High
As of December 31, 2023, H World's worldwide hotel network in operation totaled 9,394 hotels and 912,444 rooms, including 131 hotels from H World International. The number of new openings by H World in
As a leader in the Chinese chain hotel industry and one of the fastest-growing hotel groups globally, H World focuses on the core economy and midscale brands, actively expanding its hotel network. Leveraging organizational restructurings and the establishment of regional subsidiaries, H World effectively addressed underdeveloped areas, bolstering regional development and operational prowess, yielding staged operating outcomes. Looking ahead, Legacy-Huazhu will persist in its streamlined growth strategy, prioritizing service excellence by expanding premium establishments and deepening market penetration in lower-tier cities and underserved regions, particularly in limited-service hotels. This involves advancing brand quality through customer-centric sustainable quality growth and digitization-driven organizational upgrades. Concurrently, H World International will refine its strategic orientation towards asset-light transformation, cost reduction and efficiency improvement, and strengthening direct sales via H Reward global loyalty program. Additionally, it will explore growth opportunity in the
About H World Group Limited:
Originated in
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. Under the manachise model, H World manages manachised hotels through the on-site hotel managers that H World appoints, and H World collects fees from franchisees. Under the franchise model, H World provides training, reservations and support services to the franchised hotels, and collects fees from franchisees but does not appoint on-site hotel managers. H World applies a consistent standard and platform across all of its hotels.
For more information, please visit H World's website: https://ir.hworld.com.
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SOURCE H World
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