China Lodging Group, a leading and fast-growing multi-brand hotel group in China, announced its unaudited financial results for the first quarter ended March 31, 2018.
* A total of 3,817 hotels or 384,959 hotel rooms in operation as of March 31, 2018.
* Net revenues increased 29.6% year-over-year from RMB 1,614.1 million to RMB 2,091.2 million (USD 333.4 million) for the first quarter of 2018，exceeding the higher end of our Q1 Guidance.
* Net income attributable to China Lodging Group was RMB 128.5 million (USD 20.5 million) for the first quarter of 2018, compared with RMB 152.6 million for the first quarter of 2017.
* To strengthen our partnership with AccorHotels, China Lodging had made a strategic investment of about 4.5% in AccorHotels and suggested a representation on the board of AccorHotels accordingly.
First Quarter of 2018 Operational Highlights
During the first quarter of 2018, China Lodging Group opened 127 hotels, including 7 leased (“leased-and-operated”) hotels and 120 manachised (“franchised-and-managed”) hotels and franchised hotels.
The Company closed a total of 56 hotels, including 5 leased hotels and 51 manachised and franchised hotels, during the first quarter of 2018.
As of March 31, 2018, the Company had 673 leased hotels, 2,943 manachised hotels, and 201 franchised hotels in operation in 382 cities. The number of hotel rooms in operation totaled 384,959, an increase of 14.6% from a year ago.
The ADR, which is defined as the average daily rate for all hotels in operation, was RMB 207 in the first quarter of 2018, compared with RMB 182 in the first quarter of 2017 and RMB 211 in the previous quarter.
The occupancy rate for all hotels in operation was 83.7% in the first quarter of 2018, compared with 83.9% in the first quarter of 2017 and 86.0% in the previous quarter. The occupancy rate almost remained flat year-over-year.
For all hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB 165 for the first quarter of 2018, representing a 6.5% increase from RMB 155 for the first quarter of 2017, with a 6.1% increase in ADR and a 0.3-percentage-point increase in occupancy rate.
As of March 31, 2018, the Company’s loyalty program had approximately 108 million members, who contributed approximately 76% of room nights sold during the first quarter of 2018 and approximately 87% of room nights were sold through the Company’s own direct channels.
First Quarter of 2018 Financial Results
Net revenues for the first quarter of 2018 were RMB 2,091.2 million (USD 333.4 million), representing a 29.6% year-over-year increase and a 6.0% sequential decrease. The year-over-year increase was primarily due to our hotel network expansion, improved blended RevPAR and the acquisition of Crystal Orange Hotels. The sequential decrease was due to seasonality.
Net revenues from leased and owned hotels for the first quarter of 2018 were RMB 1,576.0 million (USD 251.2 million), representing a 28.5% year-over-year increase and a 8.2% sequential decrease.
Net revenues from manachised and franchised hotels for the first quarter of 2018 were RMB 508.8 million (USD 81.1 million), representing a 34.2% year-over-year increase and a 2.6% sequential increase. Net revenues from manachised and franchised hotels accounted for 24.3% of the Company’s net revenues in the first quarter of 2018, up from 23.5% a year ago.
Other revenues represent revenues generated from other than hotel businesses, which mainly include revenues from Huazhu mall and the provision of IT products and services to hotels, totaling RMB 6.5 million (USD 1.0 million) in the first quarter of 2018.
Guidance
Thanks to the better-than-expected growth in RevPAR outlook, the Company revised upwards the full year net revenues growth estimate from 16%-19% to 18%-22%. In the second quarter of 2018, the Company expects net revenues to grow 24%-26% year-over-year.
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