GreenTree Hospitality Group Ltd. , a leading hospitality management group in China, today announced its unaudited financial results for the second quarter ended June 30, 2020.
The Company's operations and performance, while still impacted by COVID-19, showed a steady recovery in the second quarter.
Total revenues decreased 21.4% to RMB216.0 million (US$30.6 million) for the second quarter and decreased 26.8% to RMB373.4 million (US$52.8 million) for the first half of 2020.
Net income decreased 26.3% to RMB93.7 million (US$13.3 million) for the second quarter and decreased 69.5% to RMB79.6 million (US$11.3 million) for the first half of 2020.
Adjusted EBITDA (non-GAAP) decreased 47.2% to RMB91.4 million (US$12.9 million) for the second quarter and decreased 54.7% to RMB138.9 million (US$19.7 million) for the first half of 2020.
Core net income (non-GAAP) decreased 40.2% to RMB74.6 million (US$10.6 million) for the second quarter and decreased 56.8% to RMB93.7 million (US$13.3 million) for the first half of 2020.
Operational Highlights
As of June 30, 2020, the Company had 35 leased-and-operated ("L&O") hotels and 4,031 franchised-and-managed ("F&M") hotels in operation in 343 cities across China, compared to 30 L&O hotels and 2,925 F&M hotels in operation in 300 cities as of June 30, 2019. The geographic coverage increased by 14.3% year over year.
A total of 4,066 hotels with 296,307 hotel rooms were in operation as of June 30, 2020, compared to 3,998 hotels and 292,716 hotel rooms as of March 31, 2020.
During the quarter, the Company opened 111 hotels, a decrease of 23 comparing to 134 hotels in the second quarter of 2019.
The Company closed 43 hotels, 5 due to brand upgrades, and 20 due to their non-compliance with the Company's brand and operating standards. The remaining 18 were closed for property related issues. The Company added a net opening of 68 hotels to its portfolio.
As of June 30, 2020, the Company had a pipeline of 1,087 hotels contracted for or under development, among which 54 hotels were in the luxury hotel segment, 215 in the mid-to-up-scale segment, 439 in the mid-scale segment, and 379 in the economy segment.
The average daily room rate, or ADR, for all hotels in operation, was RMB142, a decrease of 17.4% year-over-year.
The occupancy rate, or OCC for all hotels in operation was 63.4%, compared with 81.1% in the second quarter of 2019.
The revenue per available room, or RevPAR, which is calculated by multiplying our hotels' ADR by its occupancy rate, was RMB90, representing a 35.4% year-over-year decrease.
As of June 30, 2020, the Company's loyalty program had more than 49 million individual members and over 1,560,000 corporate members, compared to approximately 46 million and over 1,520,000 corporate members as of March 31, 2020. The Company had approximately 93.7% of room nights sold directly.
"I am proud of the Q2 results we achieved, especially considering the difficult environment that we operated under as a result of COVID-19. Through it all, our business remained resilient and highly adaptable. We continued to serve and protect our guests, our sales recovered, and we returned to profitability," said Mr. Alex Xu, Chairman and Chief Executive Officer of GreenTree.
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