Leading multi-brand hotel group China Lodging Group, Limited (Huazhu Hotels) announced its unaudited financial results for the third quarter ended September 30, 2015.
(RMB in thousands) | Q3 2014 | Q2 2015 | Q3 2015 |
Revenues: |
|
|
|
Leased hotels | 1,256,926 | 1,269,125 | 1,374,492 |
Manachised and franchised hotels | 214,577 | 273,259 | 318,864 |
Total revenues | 1,471,503 | 1,542,384 | 1,693,356 |
Less: business tax and related surcharges | (84,002) | (84,625) | (93,176) |
Net revenues | 1,387,501 | 1,457,759 | 1,600,180 |
Total revenues for the third quarter of 2015 were RMB1,693.4 million (US$266.4 million), representing a 15.1% y-o-y increase and a 9.8% sequential increase. The y-o-y increase was primarily due to its hotel network expansion.
Operational Highlights of Third Quarter 2015
China Lodging added a net of 204 hotels in the third quarter, opening of 226 hotels and closing 22 hotels, It had 619 leased hotels, 1,899 manachised hotels, and 70 franchised hotels in operation in 342 cities as of September 30, 2015. It had a total of 264,076 hotel rooms in operation, an increase of 34% from a year ago.
It had 16 leased hotels and 680 manachised and franchised hotels contracted or under construction while ADR was RMB188 in Q3 2015, compared with RMB187 in Q3 2014. The y-o-y increase was mainly attributable to a more favorable brand mix with more midscale hotels, partially offset by the city distribution shifting toward lower-tier cities.Total occupancy rates was 89.2% in Q3 2015, compared with 92.5% in Q3 2014. The y-o-y decrease was mainly due to the soft Chinese macro economy and a dilutive impact from newly-opened hotels in lower-tier cities. RevPAR was RMB167 in Q3 2015, compared with RMB173 in Q3 2014.
China Lodging's loyalty program had about 43.8 million members as of September 30, who contributed more than 80% of room nights sold during the third quarter. More than 90% of room nights were sold through China Lodging's own channels in Q3.
Share Repurchase
China Lodging had purchased approximately 0.77 million ADS in aggregate with a total consideration of US$17.5 million as of September 30, 2015
Business Outlook and Guidance
"We are delighted to maintain our strong pipeline amid a fast pace of openings this year. Thanks to the growing popularity of our brand portfolio, the four younger brands have hit 100-hotel milestone, including JI Hotel, Starway Hotel, Elan Hotel and Hi Inn. In spite of a slow macro economy, we focus on guest experience and yield management, which will result in higher brand loyalty among customers and franchisees." China Lodging’s founder and executive chairman Qi Ji said.
Mr. Ji added, "Our increasing unit growth and solid operational performance should continue to fuel improving margin, growing cash flow and steady returns to shareholders in the long term."
China Lodging expects its net revenues to grow by 15.5%-18% in the fourth quarter of 2015 and be within the range of 16.1%-16.8% for the full year of 2015.
Management Appointment
China Lodging Group announced the appointment of Teo Nee Chuan as Deputy Chief Financial Officer, effective November 2, 2015. In this role, Mr. Teo is responsible for legal, merger and acquisitions, investment and financing. He reports to China Lodging Hui Chen, Chief Financial Officer
Mr. Teo has more than 20 years of experience in corporate finance in multinational corporations. Prior to joining China Lodging Group, he was CFO of Rnomac International Group, the largest Volvo construction equipment distributor in China. He also served as CFO and Director of Operation in DDB Greater China Group and Financial Controller in Focus Media Group. Before that, Mr. Teo worked at Ernst & Young as Associate Director of Transaction Advisory Services in Kuala Lumpur, Toronto and Shanghai.
Mr. Teo received his Bachelor of Science in Accounting and Financial Analysis from Warwick University, the United Kingdom. He is a CCA in the United Kingdom and a CPA in the United States and Hong Kong.
