A total of 10,286 hotels or 1,001,865 hotel rooms in operation as of June 30, 2024.
Hotel turnover1 increased 15.5% year-over-year to RMB23.4 billion in the second quarter of 2024. Excluding Steigenberger Hotels GmbH and its subsidiaries (“DH”, or “Legacy-DH”), hotel turnover from the Legacy-Huazhu segment increased 16.2% year-over-year in the second quarter of 2024; and hotel turnover from the Legacy-DH segment increased 7.8% year-over-year in the second quarter of 2024.
Revenue increased 11.2% year-over-year to RMB6.1 billion (US$846 million)2 in the second quarter of 2024, at the high end of the previously announced 7% to 11% revenue increase guidance as compared to the second quarter of 2023. Revenue from the Legacy-Huazhu segment in the second quarter of 2024 increased 11.1% year-over-year, also at the high end of the previously announced 7% to 11% guidance; and revenue from the Legacy-DH segment in the second quarter of 2024 increased 11.6% year-over-year.
Net income attributable to H World Group Limited was RMB1.1 billion (US$147 million) in the second quarter of 2024, compared with RMB1.0 billion in the second quarter of 2023 and RMB659 million in the previous quarter. Net income attributable to H World Group Limited from the Legacy-Huazhu segment was RMB1.0 billion in the second quarter of 2024, compared with RMB993 million in the second quarter of 2023 and RMB833 million in the previous quarter. Net income attributable to H World Group Limited from the Legacy-DH segment was RMB34 million in the second quarter of 2024, compared with RMB22 million in the second quarter of 2023 and a net loss of RMB174 million in the previous quarter.
EBITDA (non-GAAP) in the second quarter of 2024 was RMB1.9 billion (US$255 million), compared with RMB1.7 billion in the second quarter of 2023 and RMB1.3 billion in the previous quarter.
Adjusted EBITDA (non-GAAP), which excluded share-based compensation expenses, gain (loss) from fair value changes of equity securities, net foreign exchange gain (loss), and gain (loss) on disposal of investments from EBITDA (non-GAAP), was RMB2.0 billion (US$280 million) in the second quarter of 2024, compared with RMB1.8 billion in the second quarter of 2023 and RMB1.4 billion in the previous quarter.
Adjusted EBITDA by segment is our segment measure. Adjusted EBITDA from the Legacy-Huazhu segment was RMB1.9 billion in the second quarter of 2024, compared with RMB1.7 billion in the second quarter of 2023 and RMB1.5 billion in the previous quarter. Adjusted EBITDA from the Legacy-DH segment was RMB131 million in the second quarter of 2024, compared with RMB97 million in the second quarter of 2023 and a loss of RMB66 million in the previous quarter.
For the third quarter of 2024, H World expects its revenue growth to be in the range of 2%-5% compared to the third quarter of 2023, or in the range of 1%-4% excluding DH.
We revise up our hotel opening guidance for the full year of 2024, expecting to open over 2,200 hotels, up from our previous guidance of around 1,800 hotels.
SINGAPORE and SHANGHAI, Aug. 20, 2024 (GLOBE NEWSWIRE) — H World Group Limited (NASDAQ: HTHT and HKEX: 1179) (“H World”, the “Company”, “we” or “our”), a key player in the global hotel industry, today announced its unaudited financial results for the second quarter and the first half ended June 30, 2024.
As of June 30, 2024, H World’s worldwide hotel network in operation totaled 10,286 hotels and 1,001,865 rooms, including 136 hotels and 27,552 rooms from DH. During the second quarter of 2024, our Legacy-Huazhu business opened 567 hotels, including 4 leased and owned hotels, and 563 manachised and franchised hotels, and closed a total of 101 hotels, including 10 leased and owned hotels and 91 manachised and franchised hotels. As of June 30, 2024, H World had a total of 3,294 unopened hotels in the pipeline, including 3,266 hotels from the Legacy-Huazhu business and 28 hotels from the Legacy-DH business.
Legacy-Huazhu – Second Quarter of 2024 Operational Highlights
As of June 30, 2024, Legacy-Huazhu had 10,150 hotels in operation, including 592 leased and owned hotels, and 9,558 manachised and franchised hotels. In addition, as of the same date, Legacy-Huazhu had 974,313 hotel rooms in operation, including 84,814 rooms under the lease and ownership model, and 889,499 rooms under the manachise and franchise models. Legacy-Huazhu also had 3,266 unopened hotels in its pipeline, including 8 leased and owned hotels, and 3,258 manachised and franchised hotels. The following discusses Legacy-Huazhu’s revenue per available room (“RevPAR”), average daily room rate (“ADR”) and occupancy rate for its leased and owned hotels, as well as manachised and franchised hotels for the periods indicated.
The ADR was RMB296 in the second quarter of 2024, compared with RMB305 in the second quarter of 2023 and RMB280 in the previous quarter.
The occupancy rate for all the Legacy-Huazhu hotels in operation was 82.6% in the second quarter of 2024, compared with 81.8% in the second quarter of 2023 and 77.2% in the previous quarter.
Blended RevPAR was RMB244 in the second quarter of 2024, compared with RMB250 in the second quarter of 2023 and RMB216 in the previous quarter.
For all the Legacy-Huazhu hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB248 in the second quarter of 2024, representing a 3.6% decline from RMB257 in the second quarter of 2023, with a 4.1% decrease in same-hotel ADR partially offset by a 0.4 percentage-point increase in same-hotel occupancy rate.
Legacy-DH – Second Quarter of 2024 Operational Highlights
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As of June 30, 2024, Legacy-DH had 136 hotels in operation, including 87 leased hotels, and 49 manachised and franchised hotels. In addition, as of the same date, Legacy-DH had 27,552 hotel rooms in operation, including 16,789 rooms under the lease model, and 10,763 rooms under the manachise and franchise models. Legacy-DH also had 28 unopened hotels in the pipeline, including 13 leased hotels and 15 manachised and franchised hotels. The following discusses Legacy-DH’s RevPAR, ADR and occupancy rate for its leased as well as manachised and franchised hotels (excluding hotels temporarily closed) for the periods indicated.
The ADR was EUR120 in the second quarter of 2024, compared with EUR117 in the second quarter of 2023 and EUR104 in the previous quarter.
The occupancy rate for all Legacy-DH hotels in operation was 68.3% in the second quarter of 2024, compared with 67.1% in the second quarter of 2023 and 55.8% in the previous quarter.
Blended RevPAR was EUR82 in the second quarter of 2024, compared with EUR78 in the second quarter of 2023 and EUR58 in the previous quarter.
Jin Hui, CEO of H World commented: “We are pleased to announce that the Group and Legacy-Huazhu has achieved a remarkable 10,000-hotel milestone during the second quarter of 2024. This milestone also marked a new start for the Group. We believe the Chinese market still presents huge opportunities and growth potentials, and we are ready to scale new heights, moving from 10,000+ hotels in over 1,000 cities to 20,000+ hotels in over 2,000 cities. In the second quarter of 2024, we continued our fast high-quality network growth, opening 567 new hotels in China. While Legacy-Huazhu’s blended RevPAR declined by 2% year-over-year in the second quarter due mainly to a high ADR base in the same period last year, our occupancy rate increased by 0.7 percentage-point year-over-year despite our continued rapid rate of hotel network expansion. In spite of the near-term volatilities in macro and consumption, China’s overall travel demand remains robust. As for Legacy-Huazhu, we will continue focusing on product upgrades, service excellence, and membership programs to enhance our core competitive edges and drive a long-term sustainable RevPAR growth.”
“Regarding our business outside China, our Legacy-DH recorded a 4.5% year-over-year blended RevPAR increase in the second quarter of 2024. We are committed to extend our global footprint, seeking growth opportunities in the Asia-Pacific (APAC) and the Middle East.”
Second Quarter and Interim of 2024 Unaudited Financial Results
(RMB in millions)
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Q2 2023
Q1 2024
Q2 2024
H1 2023
H1 2024
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Revenue:
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Leased and owned hotels
3,592
3,099
3,681
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6,466
6,780
Manachised and franchised hotels
1,856
2,063
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2,334
3,410
4,397
Others
82
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116
133
134
249
Total revenue
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5,530
5,278
6,148
10,010
11,426
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Revenue in the second quarter of 2024 was RMB6.1 billion (US$846 million), representing an 11.2% year-over-year increase and a 16.5% quarter-over-quarter increase. Revenue from the Legacy-Huazhu segment in the second quarter of 2024 was RMB4.8 billion, representing an 11.1% year-over-year increase and a 13.7% quarter-over-quarter increase. The 11.1% year-over-year increase was mainly driven by continued hotel network expansion. Revenue from the Legacy-DH segment in the second quarter of 2024 was RMB1.3 billion, representing an 11.6% year-over-year increase and a 27.8% quarter-over-quarter increase. The year-over-year increase was attributable to both business recovery and network expansion, and the quarter-over-quarter increase was mainly due to seasonality.
Revenue in the first half of 2024 was RMB11.4 billion (US$1.6 billion), representing an increase of 14.1% from the first half of 2023. Revenue from Legacy-Huazhu in the first half of 2024 was RMB9.1 billion, representing a 14.3% year-over-year increase. Revenue from Legacy-DH in the first half of 2024 was RMB2.4 billion, representing a 13.7% year-over-year increase.
Revenue from leased and owned hotels in the second quarter of 2024 was RMB3.7 billion (US$507 million), representing a 2.5% year-over-year increase and a 18.8% quarter-over-quarter increase. Revenue from leased and owned hotels from the Legacy-Huazhu segment in the second quarter of 2024 was RMB2.4 billion, representing a 2.9% year-over-year decrease, due mainly to the net closure of leased and owned hotels in operation. Revenue from leased hotels from the Legacy-DH segment in the second quarter of 2024 was RMB1.3 billion, representing a 14.2% year-over-year increase.
In the first half of 2024, revenue from our leased and owned hotels was RMB6.8 billion (US$933 million), representing a 4.9% year-over-year increase. Revenue from our Legacy-Huazhu’s leased and owned hotels in the first half of 2024 was RMB4.5 billion, representing a 0.5% year-over-year increase. Revenue from our Legacy-DH’s leased hotels in the first half of 2024 was RMB2.3 billion, representing a 14.8% year-over-year increase.
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Revenue from manachised and franchised hotels in the second quarter of 2024 was RMB2.3 billion (US$321million), representing a 25.8% year-over-year increase and a 13.1% quarter-over-quarter increase. Revenue from manachised and franchised hotels from the Legacy-Huazhu segment in the second quarter of 2024 was RMB2.3 billion, representing a 26.0% year-over-year increase. Revenue from manachised and franchised hotels from the Legacy-DH segment in the second quarter of 2024 was RMB29 million, representing an 11.5% year-over-year increase.
In the first half of 2024, revenue from manachised and franchised hotels was RMB4.4 billion (US$605 million), representing a 28.9% year-over-year increase. These hotels accounted for 38.5% of revenue, compared to 34.1% of revenue in the first half of 2023. Revenue from our Legacy-Huazhu’s manachised and franchised hotels in the first half of 2024 was RMB4.3 billion, representing a 29.1% year-over-year increase. Revenue from our Legacy-DH’s manachised and franchised hotels in the first half of 2024 was RMB50 million, representing a 13.6% year-over-year increase.
Other revenue represents revenue generated from businesses other than our hotel operations, which mainly includes revenue from the provision of IT products and services and Huazhu Mall™ and other revenue from the Legacy-DH segment, totaling RMB133 million (US$18 million) in the second quarter of 2024, compared to RMB82 million in the second quarter of 2023 and RMB116 million in the previous quarter.
In the first half of 2024, other revenue was RMB249 million (US$34 million), compared to RMB134 million in the first half of 2023.
(RMB in millions)
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Q2 2023
Q1 2024
Q2 2024
H1 2023
H1 2024
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Operating costs and expenses:
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Hotel operating costs
(3,482
)
(3,565
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)
(3,731
)
(6,732
)
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(7,296
)
Other operating costs
(6
)
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(9
)
(6
)
(17
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)
(15
)
Selling and marketing expenses
(262
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)
(260
)
(317
)
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(457
)
(577
)
General and administrative expenses
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(477
)
(509
)
(602
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)
(902
)
(1,111
)
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Pre-opening expenses
(12
)
(8
)
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(19
)
(21
)
(27
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)
Total operating costs and expenses
(4,239
)
(4,351
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)
(4,675
)
(8,129
)
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(9,026
)
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Hotel operating costs in the second quarter of 2024 were RMB3.7 billion (US$512 million), compared to RMB3.5 billion in the second quarter of 2023 and RMB3.6 billion in the previous quarter. The year-over-year increase was mainly due to our hotel network expansion. Hotel operating costs from the Legacy-Huazhu segment in the second quarter of 2024 were RMB2.7 billion, which represented 56.7% of the quarter’s revenue, compared to RMB2.6 billion or 58.9% of revenue in the second quarter of 2023 and RMB2.6 billion or 61.6% in the previous quarter. Hotel operating costs from the Legacy-DH segment in the second quarter of 2024 were RMB995 million, which represented 75.4% of revenue, compared to RMB923 million or 78.0% of revenue in the second quarter of 2023, and RMB950 million or 92.0% in the previous quarter.
In the first half of 2024, hotel operating costs were RMB7.3 billion (US$1.0 billion), compared to RMB6.7 billion in the first half of 2023. Hotel operating costs from Legacy-Huazhu in the first half of 2024 were RMB5.4 billion, which represented 59.0% of revenue, compared to 62.2% in the first half of 2023. Hotel operating costs from Legacy-DH in the first half of 2024 were RMB1.9 billion, which represented 82.7% of revenue, compared to RMB1.8 billion or 86.5% in the first half of 2023.
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Selling and marketing expenses in the second quarter of 2024 were RMB317 million (US$44 million), compared to RMB262 million in the second quarter of 2023 and RMB260 million in the previous quarter. Selling and marketing expenses from the Legacy-Huazhu segment in the second quarter of 2024 were RMB193 million, which represented 4.0% of this quarter’s revenue, compared to RMB153 million or 3.5% of revenue in the second quarter of 2023, and RMB159 million or 3.7% for the previous quarter. The year-over-year expense increase was mainly due to continued business expansion. Selling and marketing expenses from the Legacy-DH segment in the second quarter of 2024 were RMB124 million, which represented 9.4% of revenue, compared to RMB109 million or 9.2% of revenue in the second quarter of 2023, and RMB101 million or 9.8% for the previous quarter.
In the first half of 2024, selling and marketing expenses were RMB577 million (US$79 million), compared to RMB457 million in the first half of 2023. Selling and marketing expenses from Legacy-Huazhu in the first half of 2024 were RMB352 million, which represented 3.9% of revenue, compared to RMB270 million or 3.4% of revenue in the first half of 2023. Selling and marketing expenses from Legacy-DH in the first half of 2024 were RMB225 million, which represented 9.6% of revenue, compared to RMB187 million or 9.0% of revenue in the first half of 2023.
General and administrative expenses in the second quarter of 2024 were RMB602 million (US$83 million), compared to RMB477 million in the second quarter of 2023 and RMB509 million in the previous quarter. General and administrative expenses from the Legacy-Huazhu segment in the second quarter of 2024 were RMB483 million, which represented 10.0% of this quarter’s revenue, compared to RMB352 million or 8.1% of revenue in the second quarter of 2023 and RMB395 million or 9.3% of revenue in the previous quarter. The year-over-year expense increase was mainly due to headcount normalization and a rise in share-based compensation to secure and reward core employees for our sustainable long-term business growth. General and administrative expenses from the Legacy-DH segment in the second quarter of 2024 were RMB119 million, which represented 9.0% of revenue, compared to RMB125 million or 10.6% of revenue in the second quarter of 2023 and RMB114 million or 11.0% in the previous quarter.
In the first half of 2024, general and administrative expenses were RMB1.1 billion (US$153 million), compared to RMB902 million in the first half of 2023. General and administrative expenses from Legacy-Huazhu in the first half of 2024 were RMB878 million, which represented 9.7% of revenue, compared to RMB664 million or 8.4% of revenue in the first half of 2023. General and administrative expenses from Legacy-DH in the first half of 2024 were RMB233 million, which represented 9.9% of revenue, compared to RMB238 million or 11.5% of revenue in the first half of 2023.
Pre-opening expenses in the second quarter of 2024 were primarily related to the Legacy-Huazhu segment and totaled RMB19 million (US$3 million), compared to RMB12 million in the second quarter of 2023 and RMB8 million in the previous quarter.
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Pre-opening expenses in the first half of 2024 were RMB27 million (US$4 million), compared to RMB21 million in the first half of 2023. Pre-opening expenses from Legacy-Huazhu were 0.3% of revenue in the first half of 2024, the same as the 0.3% of revenue in the first half of 2023.
Other operating income, net in the second quarter of 2024 was RMB99 million (US$13 million), compared to RMB94 million in the second quarter of 2023 and RMB76 million in the previous quarter.
Other operating income, net in the first half of 2024 was RMB175 million (US$24 million), compared to RMB168 million in the first half of 2023.
Income from operations in the second quarter of 2024 was RMB1.6 billion (US$216 million), compared to income from operations of RMB1.4 billion in the second quarter of 2023 and income from operations of RMB1.0 billion in the previous quarter. Income from operations from the Legacy-Huazhu segment in the second quarter of 2024 was RMB1.5 billion, compared to income from operations of RMB1.3 billion in the second quarter of 2023 and income from operations of RMB1.1 billion in the previous quarter. The Legacy-DH segment had income from operations of RMB73 million in the second quarter of 2024, compared to income from operations of RMB35 million in the second quarter of 2023 and a loss from operations of RMB128 million in the previous quarter.
Income from operations in the first half of 2024 was RMB2.6 billion (US$354 million), compared to income from operation of RMB2.0 billion in the first half of 2023. Income from operations from Legacy-Huazhu in the first half of 2024 was RMB2.6 billion, compared to income from operations of RMB2.2 billion in 2023. Loss from operations from Legacy-DH in the first half of 2024 was RMB55 million, compared to a loss of RMB123 million in the first half of 2023.
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Operating margin, defined as income from operations as a percentage of revenue, was 25.6% in the second quarter of 2024, compared with 25.0% in the second quarter of 2023 and 19.0% for the previous quarter. The margin improvement was mainly due to higher revenue contribution from Legacy-Huazhu’s manachised and franchised business as well as margin improvement from the Legacy-DH business. This was in line with our asset-light expansion strategy. Operating margin from the Legacy-Huazhu segment in the second quarter of 2024 was 31.0%, compared with 31.1% in the second quarter of 2023 and 26.6% in the previous quarter. Operating margin from the Legacy-DH segment in the second quarter of 2024 was 5.5%, compared with 3.0% in the second quarter of 2023 and a negative 12.4% in the previous quarter.
Operating margin in the first half of 2024 was 22.5%, compared with 20.5% in the first half of 2023. Operating margin from Legacy-Huazhu in the first half of 2024 was 29.0%, compared with 27.4% in the first half of 2023. Operating margin from Legacy-DH in the first half of 2024 was a negative 2.3%, compared with a negative 5.9% in the first half of 2023.
Other income, net in the second quarter of 2024 was RMB24 million (US$3 million), compared to RMB32 million in the second quarter of 2023 and RMB40 million in the previous quarter.
Other income, net in the first half of 2024 was RMB64 million (US$9 million), compared to RMB546 million in the first half of 2023, which was mainly due to gains from selling AccorHotels shares.
Gains (losses) from fair value changes of equity securities in the second quarter of 2024 were losses of RMB51 million (US$7 million), compared to losses of RMB19 million in the second quarter of 2023, and gains of RMB38 million in the previous quarter. Gains (losses) from fair value changes of equity securities mainly represent the unrealized gains (losses) from our investments in equity securities with readily determinable fair values.
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In the first half of 2024, losses from fair value changes of equity securities were RMB13 million (US$2 million), compared to losses of RMB6 million in the first half of 2023.
Income tax expense in the second quarter of 2024 was RMB423 million (US$58 million), compared to RMB308 million in the second quarter of 2023 and RMB279 million in the previous quarter.
In the first half of 2024, income tax expense was RMB702 million (US$97 million), compared to RMB502 million in the first half of 2023.
Net income attributable to H World Group Limited in the second quarter of 2024 was RMB1.1 billion (US$147 million), compared with RMB1.0 billion in the second quarter of 2023 and RMB659 million in the previous quarter. Net income attributable to H World Group Limited from the Legacy-Huazhu segment was RMB1.0 billion in the second quarter of 2024, compared with RMB993 million in the second quarter of 2023 and RMB833 million in the previous quarter. Net income attributable to H World Group Limited from the Legacy-DH segment was RMB34 million in the second quarter of 2024, compared with RMB22 million in the second quarter of 2023 and a net loss of RMB174 million in the previous quarter.
Net income attributable to H World Group Limited in the first half of 2024 was RMB1.7 billion (US$238 million), compared with RMB2.0 billion in the first half of 2023. Net income attributable to H World Group Limited from Legacy-Huazhu in the first half of 2024 was RMB1.9 billion, compared to RMB2.1 billion in the first half of 2023. Net loss attributable to H World Group Limited from Legacy-DH in the first half of 2024 was RMB140 million, compared to a net loss of RMB143 million in the first half of 2023.
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EBITDA (non-GAAP) in the second quarter of 2024 was RMB1.9 billion (US$255 million), compared with RMB1.7 billion in the second quarter of 2023 and RMB1.3 billion in the previous quarter.
EBITDA (non-GAAP) in the first half of 2024 was RMB3.2 billion (US$436 million), compared with RMB3.4 billion in the first half of 2023.
Adjusted EBITDA (non-GAAP), which excluded share-based compensation expenses, gain (loss) from fair value changes of equity securities, net foreign exchange gain (loss), and gain (loss) on disposal of investments from EBITDA (non-GAAP), was RMB2.0 billion (US$280 million) in the second quarter of 2024, compared with RMB1.8 billion in the second quarter of 2023 and RMB1.4 billion in the previous quarter. Adjusted EBITDA from the Legacy-Huazhu segment, which is a segment measure, was RMB1.9 billion in the second quarter of 2024, compared with RMB1.7 billion in the second quarter of 2023 and RMB1.5 billion in the previous quarter. Adjusted EBITDA from the Legacy-DH segment, which is a segment measure, was RMB131 million in the second quarter of 2024, compared with RMB97 million in the second quarter of 2023 and a loss of RMB66 million in the previous quarter.
Adjusted EBITDA (non-GAAP) in the first half of 2024 was RMB3.5 billion (US$476 million), compared with RMB2.8 billion in the first half of 2023. Adjusted EBITDA from Legacy-Huazhu, which is a segment measure, was RMB3.4 billion in the first half of 2024, compared with RMB2.8 billion in the first half of 2023. Adjusted EBITDA from Legacy-DH, which is a segment measure, was RMB65 million in the first half of 2024.
To better reflect the profitability of our core business, we have redefined the non-GAAP measure of adjusted EBITDA, and therefore the above adjusted EBITDA for the second quarter of 2023 and the first half of 2023 have been restated.
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Cash flow. Operating cash inflow in the second quarter of 2024 was RMB2.2 billion (US$307 million). Investing cash inflow in the second quarter of 2024 was RMB346 million (US$47 million). Financing cash outflow in the second quarter of 2024 was RMB1.1 billion (US$152 million).
Operating cash inflow in the first half of 2024 was RMB3.1 billion (US$430 million), compared to RMB4.1 billion in the first half of 2023. Investing cash inflow in the first half of 2024 was RMB694 million (US$95 million), compared to RMB849 million in the first half of 2023. Financing cash outflow in the first half of 2024 was RMB3.4 billion (US$463 million), compared to RMB2.4 billion in the first half of 2023.
Cash, cash equivalents and restricted cash. As of June 30, 2024, the Company had a total balance of cash and cash equivalents of RMB7.8 billion (US$1.1 billion) and restricted cash of RMB364 million (US$50 million).
Debt financing. As of June 30, 2024, the Company had a total debt and net cash balance of RMB5.5 billion (US$762 million) and RMB2.6 billion (US$361 million), respectively; the unutilized credit facility available to the Company was RMB3.1 billion.
Shareholder return plan On July 23 2024, the Company’s board of directors (the “Board”) has announced a three-year shareholder return plan with an aggregate amount of distribution that may be made to the Company’s shareholders of up to US$2 billion, effective from July 23, 2024. Under the shareholder return plan, the Board has the sole discretion to: (i) declare and distribute ordinary dividends semi-annually, the aggregate amount of which for each financial year shall be no less than 60% of the Company’s net income in such financial year, and (ii) declare and distribute, from time to time, special dividends and/or make repurchases of the American Depositary Shares of the Company (“ADS(s)”) pursuant to the share repurchase program, considering the financial position of the Company.
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Semi-annual dividend The Board has declared a cash dividend for the first half of 2024 in the aggregate amount of approximately US$200 million, of US$0.063 per ordinary share, or US$0.63 per ADS.
Share repurchase program On July 23 2024, the Board approved a five-year share repurchase program of ADSs with an aggregate amount of up to US$1 billion, effective from August 21, 2024. This share repurchase program replaces the Company’s share repurchase program previously approved and adopted on August 21, 2019 with an aggregate amount of up to US$750 million.
Guidance For the third quarter of 2024, H World expects its revenue growth to be in the range of 2%-5% compared to the third quarter of 2023, or in the range of 1%-4% excluding DH.
We revise up our hotel opening guidance for the full year of 2024, expecting to open over 2,200 hotels, and up from our previous guidance of around 1,800 hotels.
The above forecast reflects the Company’s current and preliminary view, which is subject to change.
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Conference Call H World’s management will host a conference call at 9 p.m. U.S. Eastern time on Tuesday, August 20, 2024 (9 a.m. Hong Kong time on Wednesday, August 21, 2024) following the announcement.
To join by phone, all participants must pre-register this conference call using the Participant Registration link of https://register.vevent.com/register/BI29b37e1152634b2aaaec173dd6f6fb8a. Upon registration, each participant will receive details for the conference call, which include dial-in numbers, conference call passcode and a unique access PIN.
A live webcast of the call can be accessed at https://edge.media-server.com/mmc/p/8no94rwr or the Company’s website at https://ir.hworld.com/news-and-events/events-calendar.
A replay of the conference call will be available for twelve months from the date of the conference at the Company’s website, https://ir.hworld.com/news-and-events/events-calendar.
Use of Non-GAAP Financial Measures To supplement the Company’s unaudited consolidated financial results presented in accordance with U.S. Generally-Accepted Accounting Principles (“GAAP”), the Company uses the following non-GAAP measures defined as non-GAAP financial measures by the U.S. Securities and Exchange Commission (“SEC”): adjusted net income (loss) attributable to H World Group Limited excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments; adjusted basic and diluted earnings (losses) per share/ADS excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments; EBITDA; adjusted EBITDA excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. For more information on these non-GAAP financial measures, please see the table captioned “Unaudited Reconciliations of GAAP and non-GAAP Results” set forth at the end of this release. The Company believes that these non-GAAP financial measures provide meaningful supplemental information regarding Company performance by excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments that may not be indicative of Company operating performance. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing Company performance and when planning and forecasting future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to the Company’s historical performance. The Company believes these non-GAAP financial measures are also useful to investors in allowing for greater transparency with respect to supplemental information used regularly by Company management in financial and operational decision-making. A limitation of using non-GAAP financial measures excluding share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments is that share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments have been and may continue to be significant and recurring in the Company’s business. Management compensates for these limitations by providing specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables have more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.
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The Company believes that EBITDA is a useful financial metric to assess the operating and financial performance before the impact of investing and financing transactions and income taxes, given the significant investments that the Company has made in leasehold improvements, depreciation and amortization expense that comprise a significant portion of the Company’s cost structure. In addition, the Company believes that EBITDA is widely used by other companies in the lodging industry and may be used by investors as a measure of financial performance. The Company believes that EBITDA information provides investors with a useful tool for comparability between periods because it excludes depreciation and amortization expense attributable to capital expenditures. The Company also uses adjusted EBITDA to assess operating results of its hotels in operation. The Company believes that the exclusion of share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments helps facilitate year-over-year comparisons of the results of operations as the share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments may not be indicative of Company operating performance.
Therefore, the Company believes adjusted EBITDA more closely reflects the financial performance capability of our hotels. The presentation of EBITDA and adjusted EBITDA should not be construed as an indication that the Company’s future results will be unaffected by other charges and gains considered to be outside the ordinary course of business.
The use of EBITDA and adjusted EBITDA has certain limitations. Depreciation and amortization expense for various long-term assets (including land use rights), income tax, interest expense and interest income have been and will be incurred and are not reflected in the presentation of EBITDA. Share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments have been and will be incurred and are not reflected in the presentation of adjusted EBITDA. Each of these items should also be considered in the overall evaluation of the results. The Company compensates for these limitations by providing the relevant disclosure of depreciation and amortization, interest income, interest expense, income tax expense, share-based compensation expenses, gain (loss) from fair value changes of equity securities, foreign exchange gain (loss), net and gain (loss) on disposal of investments all in the reconciliations to the U.S. GAAP financial measures and in the consolidated financial statements, all of which should be considered when evaluating the performance of the Company.
The terms EBITDA and adjusted EBITDA are not defined under U.S. GAAP, and neither EBITDA nor adjusted EBITDA is a measure of net income, operating income, operating performance or liquidity presented in accordance with U.S. GAAP. When assessing the operating and financial performance, investors should not consider these data in isolation or as a substitute for the Company’s net income, operating income or any other operating performance measure that is calculated in accordance with U.S. GAAP. In addition, the Company’s EBITDA or adjusted EBITDA may not be comparable to EBITDA or adjusted EBITDA or similarly titled measures utilized by other companies since such other companies may not calculate EBITDA or adjusted EBITDA in the same manner as the Company does.
Reconciliations of the Company’s non-GAAP financial measures, including EBITDA and adjusted EBITDA, to the consolidated statement of operations information are included at the end of this press release.
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About H World Group Limited Originated in China, H World Group Limited is a key player in the global hotel industry. As of June 30, 2024, H World operated 10,286 hotels with 1,001,865 rooms in operation in 18 countries. H World’s brands include Hi Inn, Elan Hotel, HanTing Hotel, JI Hotel, Starway Hotel, Orange Hotel, Crystal Orange Hotel, Manxin Hotel, Madison Hotel, Joya Hotel, Blossom House, Ni Hao Hotel, CitiGO Hotel, Steigenberger Hotels & Resorts, MAXX, Jaz in the City, IntercityHotel, Zleep Hotels, Steigenberger Icon and Song Hotels. In addition, H World also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in the pan-China region.
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. As of June 30, 2024, H World operated 10 percent of its hotel rooms under the lease and ownership model, and 90 percent under the manachise and franchise model.
For more information, please visit H World’s website: https://ir.hworld.com.
Safe Harbor Statement Under the U.S. Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; economic conditions; the regulatory environment; our ability to attract and retain customers and leverage our brands; trends and competition in the lodging industry; the expected growth of demand for lodging; and other factors and risks detailed in our filings with the U.S. Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as “may,” “should,” “will,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “forecast,” “project” or “continue,” the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.
H World undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.
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—Financial Tables and Operational Data—
H World Group Limited
Unaudited Condensed Consolidated Balance Sheets
December 31, 2023
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June 30, 2024
RMB
RMB
Advertisement
US$3
(in millions)
ASSETS
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Current assets:
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Cash and cash equivalents
6,946
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7,801
1,073
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Restricted cash
764
364
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50
Short-term investments
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2,189
1,112
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153
Accounts receivable, net
755
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840
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116
Loan receivables, net
184
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163
23
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Amounts due from related parties, current
210
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258
36
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Inventories
59
61
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8
Other current assets, net
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949
868
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119
Total current assets
12,056
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11,467
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1,578
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Property and equipment, net
6,097
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5,882
809
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Intangible assets, net
5,280
5,174
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712
Operating lease right-of-use assets
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25,658
25,814
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3,552
Finance lease right-of-use assets
2,171
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2,053
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283
Land use rights, net
181
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177
24
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Long-term investments
2,564
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2,499
344
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Goodwill
5,318
5,261
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724
Amounts due from related parties, non-current
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25
21
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3
Loan receivables, net
163
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158
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22
Other assets, net
663
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672
93
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Deferred tax assets
1,043
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1,035
142
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Assets held for sale
2,313
2,239
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308
Total assets
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63,532
62,452
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8,594
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LIABILITIES AND EQUITY
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Current liabilities:
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Short-term debt
4,049
315
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44
Accounts payable
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1,019
865
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119
Amounts due to related parties
77
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119
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16
Salary and welfare payables
1,067
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843
116
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Deferred revenue
1,637
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1,760
242
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Operating lease liabilities, current
3,609
3,531
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486
Finance lease liabilities, current
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45
45
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6
Accrued expenses and other current liabilities
3,261
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3,599
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495
Dividends payable
2,085
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–
–
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Income tax payable
562
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782
107
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Total current liabilities
17,411
11,859
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1,631
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Long-term debt
1,265
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5,220
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718
Operating lease liabilities, non-current
24,215
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24,334
3,348
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Finance lease liabilities, non-current
2,697
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2,587
356
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Deferred revenue
1,072
1,182
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163
Other long-term liabilities
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1,118
1,215
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167
Deferred tax liabilities
845
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818
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113
Retirement benefit obligations
124
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120
17
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Liabilities held for sale
2,536
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2,400
330
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Total liabilities
51,283
49,735
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6,843
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Equity:
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Ordinary shares
0
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0
0
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Treasury shares
(906
)
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(1,569
)
(216
)
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Additional paid-in capital
11,861
11,300
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1,555
Retained earnings
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794
2,520
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347
Accumulated other comprehensive income
386
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331
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46
Total H World Group Limited shareholders’ equity
12,135
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12,582
1,732
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Noncontrolling interest
114
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135
19
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Total equity
12,249
12,717
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1,751
Total liabilities and equity
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63,532
62,452
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8,594
H World Group Limited
Unaudited Condensed Consolidated Statements of Comprehensive Income
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Quarter Ended
Six Months Ended
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June 30, 2023
March 31, 2024
June 30, 2024
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June 30, 2023
June 30, 2024
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RMB
RMB
RMB
US$
RMB
Advertisement
RMB
US$
(in millions, except shares, per share and per ADS data)
Revenue:
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Leased and owned hotels
3,592
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3,099
3,681
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507
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6,466
6,780
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933
Manachised and franchised hotels
1,856
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2,063
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2,334
321
Advertisement
3,410
4,397
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605
Others
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82
116
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133
18
Advertisement
134
Advertisement
249
34
Advertisement
Total revenue
5,530
5,278
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6,148
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846
10,010
Advertisement
11,426
1,572
Advertisement
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Operating costs and expenses:
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Hotel operating costs:
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Rents
(1,088
)
(1,086
Advertisement
)
(1,091
)
Advertisement
(150
)
(2,139
)
Advertisement
(2,177
)
(300
Advertisement
)
Utilities
(137
)
Advertisement
(192
)
(149
)
Advertisement
(20
)
(341
Advertisement
)
(341
)
Advertisement
(47
)
Personnel costs
(1,131
)
Advertisement
(1,225
)
(1,337
Advertisement
)
(184
)
Advertisement
(2,167
)
(2,562
)
Advertisement
(353
)
Depreciation and amortization
(332
Advertisement
)
(319
)
Advertisement
(315
)
(43
)
Advertisement
(678
)
(634
Advertisement
)
(87
)
Consumables, food and beverage
Advertisement
(335
)
(293
)
Advertisement
(327
)
(45
Advertisement
)
(613
)
Advertisement
(620
)
(85
)
Advertisement
Others
(459
)
(450
Advertisement
)
(512
)
Advertisement
(70
)
(794
)
Advertisement
(962
)
(132
Advertisement
)
Total hotel operating costs
(3,482
)
Advertisement
(3,565
)
(3,731
)
Advertisement
(512
)
(6,732
Advertisement
)
(7,296
)
Advertisement
(1,004
)
Other operating costs
(6
)
Advertisement
(9
)
(6
Advertisement
)
(1
)
Advertisement
(17
)
(15
)
Advertisement
(2
)
Selling and marketing expenses
(262
Advertisement
)
(260
)
Advertisement
(317
)
(44
)
Advertisement
(457
)
(577
Advertisement
)
(79
)
General and administrative expenses
Advertisement
(477
)
(509
)
Advertisement
(602
)
(83
Advertisement
)
(902
)
Advertisement
(1,111
)
(153
)
Advertisement
Pre-opening expenses
(12
)
(8
Advertisement
)
(19
)
Advertisement
(3
)
(21
)
Advertisement
(27
)
(4
Advertisement
)
Total operating costs and expenses
(4,239
)
Advertisement
(4,351
)
(4,675
)
Advertisement
(643
)
(8,129
Advertisement
)
(9,026
)
Advertisement
(1,242
)
Other operating income (expense), net
94
Advertisement
76
99
Advertisement
13
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168
175
Advertisement
24
Income (loss) from operations
1,385
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1,003
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1,572
216
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2,049
2,575
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354
Interest income
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57
51
Advertisement
56
8
Advertisement
101
Advertisement
107
15
Advertisement
Interest expense
(94
)
(83
Advertisement
)
(84
)
Advertisement
(12
)
(224
)
Advertisement
(167
)
(23
Advertisement
)
Other income (expense), net
32
Advertisement
40
24
Advertisement
3
546
Advertisement
64
Advertisement
9
Gains (losses) from fair value changes of equity securities
(19
)
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38
(51
Advertisement
)
(7
)
Advertisement
(6
)
(13
)
Advertisement
(2
)
Foreign exchange gains (losses)
(5
Advertisement
)
(92
)
Advertisement
(24
)
(3
)
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99
(116
Advertisement
)
(15
)
Income (loss) before income taxes
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1,356
957
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1,493
205
Advertisement
2,565
Advertisement
2,450
338
Advertisement
Income tax (expense) benefit
(308
)
(279
Advertisement
)
(423
)
Advertisement
(58
)
(502
)
Advertisement
(702
)
(97
Advertisement
)
Income (Loss) from equity method investments
(12
)
Advertisement
(11
)
12
Advertisement
2
(27
Advertisement
)
1
Advertisement
0
Net income (loss)
1,036
Advertisement
667
1,082
Advertisement
149
Advertisement
2,036
1,749
Advertisement
241
Net (income) loss attributable to noncontrolling interest
(21
Advertisement
)
(8
)
Advertisement
(15
)
(2
)
Advertisement
(31
)
(23
Advertisement
)
(3
)
Net income (loss) attributable to H World Group Limited
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1,015
659
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1,067
147
Advertisement
2,005
Advertisement
1,726
238
Advertisement
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Gains(losses) from fair value changes of debt securities, net of tax
20
Advertisement
–
Advertisement
(25
)
(3
)
Advertisement
20
(25
Advertisement
)
(3
)
Foreign currency translation adjustments, net of tax
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183
(31
)
Advertisement
1
0
Advertisement
222
Advertisement
(30
)
(4
)
Advertisement
Comprehensive income (loss)
1,239
636
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1,058
Advertisement
146
2,278
Advertisement
1,694
234
Advertisement
Comprehensive (income) loss attributable to noncontrolling interest
(21
)
Advertisement
(8
)
(15
)
Advertisement
(2
)
(31
Advertisement
)
(23
)
Advertisement
(3
)
Comprehensive income (loss) attributable to H World Group Limited
1,218
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628
1,043
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144
Advertisement
2,247
1,671
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231
Advertisement
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Earnings (Losses) per share:
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Basic
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0.32
0.21
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0.34
0.05
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0.63
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0.55
0.08
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Diluted
0.31
0.21
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0.33
Advertisement
0.05
0.62
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0.54
0.07
Advertisement
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Earnings (Losses) per ADS:
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Basic
3.18
Advertisement
2.10
3.40
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0.47
Advertisement
6.30
5.50
Advertisement
0.76
Diluted
3.11
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2.08
Advertisement
3.32
0.46
Advertisement
6.16
5.41
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0.74
Advertisement
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Weighted average number of shares used in computation:
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Basic
3,187,331,990
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3,139,466,152
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3,137,722,145
3,137,722,145
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3,180,817,047
3,138,594,148
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3,138,594,148
Diluted
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3,354,717,904
3,172,770,493
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3,303,934,814
3,303,934,814
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3,349,256,828
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3,300,316,153
3,300,316,153
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H World Group Limited
Unaudited Condensed Consolidated Statements of Cash Flows
Quarter Ended
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Six Months Ended
June 30, 2023
March 31, 2024
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June 30, 2024
June 30, 2023
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June 30, 2024
RMB
RMB
RMB
Advertisement
US$
RMB
RMB
US$
Advertisement
(in millions)
Operating activities:
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Net income (loss)
Advertisement
1,036
667
Advertisement
1,082
149
Advertisement
2,036
Advertisement
1,749
241
Advertisement
Advertisement
Share-based compensation
34
Advertisement
58
Advertisement
112
15
Advertisement
61
170
Advertisement
23
Depreciation and amortization, and other
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359
345
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337
46
Advertisement
744
Advertisement
682
94
Advertisement
Impairment loss
80
–
Advertisement
36
Advertisement
5
80
Advertisement
36
5
Advertisement
Loss (Income) from equity method investments, net of dividends
68
Advertisement
11
30
Advertisement
4
83
Advertisement
41
Advertisement
6
Investment (income) loss and foreign exchange (gain) loss
(96
)
Advertisement
29
41
Advertisement
6
Advertisement
(640
)
70
Advertisement
10
Changes in operating assets and liabilities
712
Advertisement
(230
)
Advertisement
750
103
Advertisement
1,732
520
Advertisement
71
Other
Advertisement
45
6
Advertisement
(153
)
(21
Advertisement
)
(14
)
Advertisement
(147
)
(20
)
Advertisement
Net cash provided by (used in) operating activities
2,238
886
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2,235
Advertisement
307
4,082
Advertisement
3,121
430
Advertisement
Advertisement
Investing activities:
Advertisement
Advertisement
Capital expenditures
(171
)
Advertisement
(281
)
(203
Advertisement
)
(28
)
Advertisement
(393
)
(484
)
Advertisement
(67
)
Purchase of investments
(961
Advertisement
)
(254
)
Advertisement
(632
)
(87
)
Advertisement
(962
)
(886
Advertisement
)
(122
)
Proceeds from maturity/sale and return of investments
Advertisement
2
842
Advertisement
1,139
157
Advertisement
2,202
Advertisement
1,981
272
Advertisement
Loan advances
(41
)
(52
Advertisement
)
(12
)
Advertisement
(2
)
(75
)
Advertisement
(64
)
(9
Advertisement
)
Loan collections
38
Advertisement
38
53
Advertisement
7
72
Advertisement
91
Advertisement
13
Other
1
Advertisement
55
1
Advertisement
0
Advertisement
5
56
Advertisement
8
Net cash provided by (used in) investing activities
(1,132
Advertisement
)
348
Advertisement
346
47
Advertisement
849
694
Advertisement
95
Advertisement
Advertisement
Financing activities:
Advertisement
Advertisement
Net proceeds from issuance of ordinary shares
–
–
Advertisement
–
Advertisement
–
1,973
Advertisement
–
–
Advertisement
Payment of share repurchase
–
Advertisement
(544
)
(132
)
Advertisement
(18
)
–
Advertisement
(676
)
Advertisement
(93
)
Proceeds from debt
300
Advertisement
536
53
Advertisement
7
Advertisement
728
589
Advertisement
81
Repayment of debt
(4,103
Advertisement
)
(137
)
Advertisement
(292
)
(40
)
Advertisement
(4,992
)
(429
Advertisement
)
(59
)
Dividend paid
Advertisement
–
(2,091
)
Advertisement
–
–
Advertisement
–
Advertisement
(2,091
)
(288
)
Advertisement
Purchase of prepaid put option
–
–
Advertisement
(710
)
Advertisement
(98
)
–
Advertisement
(710
)
(98
Advertisement
)
Other
(21
)
Advertisement
(22
)
(24
)
Advertisement
(3
)
(71
Advertisement
)
(46
)
Advertisement
(6
)
Net cash provided by (used in) financing activities
(3,824
)
Advertisement
(2,258
)
(1,105
Advertisement
)
(152
)
Advertisement
(2,362
)
(3,363
)
Advertisement
(463
)
Advertisement
Advertisement
Effect of exchange rate changes on cash, cash equivalents and restricted cash
202
Advertisement
(17
)
10
Advertisement
2
181
Advertisement
(7
)
Advertisement
(1
)
Net increase (decrease) in cash, cash equivalents and restricted cash
(2,516
)
Advertisement
(1,041
)
1,486
Advertisement
204
Advertisement
2,750
445
Advertisement
61
Less: net increase (decrease) in cash and cash equivalents classified within assets held for sale
–
Advertisement
5
Advertisement
(15
)
(2
)
Advertisement
–
(10
Advertisement
)
(1
)
Cash, cash equivalents and restricted cash at the beginning of the period
Advertisement
10,352
7,710
Advertisement
6,664
917
Advertisement
5,086
Advertisement
7,710
1,061
Advertisement
Cash, cash equivalents and restricted cash at the end of the period
7,836
6,664
Advertisement
8,165
Advertisement
1,123
7,836
Advertisement
8,165
1,123
Advertisement
H World Group Limited
Unaudited Reconciliation of GAAP and Non-GAAP Results
Quarter Ended
Advertisement
Six Months Ended
June 30, 2023
Advertisement
March 31, 2024
June 30, 2024
June 30, 2023
Advertisement
June 30, 2024
RMB
RMB
Advertisement
RMB
US$
RMB
RMB
US$
Advertisement
(in millions, except shares, per share and per ADS data)
Net income (loss) attributable to H World Group Limited (GAAP)
1,015
Advertisement
659
1,067
Advertisement
147
Advertisement
2,005
1,726
Advertisement
238
Share-based compensation expenses
34
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58
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112
15
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61
170
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23
(Gain) loss from fair value changes of equity securities
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19
(38
)
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51
7
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6
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13
2
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Foreign exchange (gain) loss, net
5
92
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24
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3
(99
)
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116
15
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(Gain) loss on disposal of investments
–
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–
–
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–
(516
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)
–
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–
Adjusted net income (loss) attributable to H World Group Limited (non-GAAP)
1,073
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771
1,254
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172
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1,457
2,025
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278
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Adjusted earnings (losses) per share (non-GAAP)
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Basic
0.34
0.25
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0.40
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0.05
0.46
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0.65
0.09
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Diluted
0.33
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0.24
0.39
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0.05
0.45
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0.63
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0.09
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Adjusted earnings (losses) per ADS (non-GAAP)
Basic
3.37
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2.46
3.99
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0.55
4.58
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6.45
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0.89
Diluted
3.29
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2.43
3.88
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0.53
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4.51
6.31
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0.87
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Weighted average number of shares used in computation
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Basic
3,187,331,990
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3,139,466,152
3,137,722,145
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3,137,722,145
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3,180,817,047
3,138,594,148
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3,138,594,148
Diluted
3,354,717,904
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3,172,770,493
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3,303,934,814
3,303,934,814
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3,349,256,828
3,300,316,153
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3,300,316,153
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Quarter Ended
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Six Months Ended
June 30, 2023
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March 31, 2024
June 30, 2024
June 30, 2023
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June 30, 2024
RMB
RMB
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RMB
US$
RMB
RMB
US$
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(in millions, except per share and per ADS data)
Net income (loss) attributable to H World Group Limited (GAAP)
1,015
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659
1,067
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147
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2,005
1,726
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238
Interest income
(57
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)
(51
)
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(56
)
(8
)
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(101
)
(107
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)
(15
)
Interest expense
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94
83
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84
12
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224
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167
23
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Income tax expense
308
279
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423
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58
502
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702
97
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Depreciation and amortization
354
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339
335
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46
721
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674
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93
EBITDA (non-GAAP)
1,714
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1,309
1,853
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255
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3,351
3,162
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436
Share-based compensation
34
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58
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112
15
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61
170
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23
(Gain) loss from fair value changes of equity securities
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19
(38
)
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51
7
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6
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13
2
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Foreign exchange (gain) loss, net
5
92
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24
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3
(99
)
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116
15
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(Gain) loss on disposal of investments
–
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–
–
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–
(516
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)
–
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–
Adjusted EBITDA (non-GAAP)
1,772
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1,421
2,040
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280
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2,803
3,461
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476
H World Group Limited
Segment Financial Summary
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Quarter Ended June 30, 2023
Quarter Ended March 31, 2024
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Quarter Ended June 30, 2024
Legacy- Huazhu
Legacy- DH
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Legacy- Huazhu
Legacy- DH
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Legacy- Huazhu
Legacy- DH
RMB
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RMB
RMB
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RMB
RMB
RMB
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(in millions)
(in millions)
(in millions)
Leased and owned hotels
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2,466
1,126
2,112
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987
2,395
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1,286
Manachised and franchised hotels
1,830
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26
2,042
21
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2,305
29
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Others
51
31
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91
25
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128
5
Revenue
4,347
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1,183
4,245
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1,033
4,828
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1,320
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Depreciation and amortization
294
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60
280
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59
279
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56
Adjusted EBITDA
1,675
97
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1,487
(66
)
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1,909
131
H World Group Limited
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Segment Financial Summary
Six Months Ended June 30, 2023
Six Months Ended June 30, 2024
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Legacy- Huazhu
Legacy- DH
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Legacy- Huazhu
Legacy- DH
RMB
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RMB
RMB
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RMB
(in millions)
(in millions)
Leased and owned hotels
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4,486
1,980
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4,507
2,273
Manachised and franchised hotels
3,366
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44
4,347
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50
Others
89
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45
219
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30
Revenue
7,941
2,069
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9,073
2,353
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Depreciation and amortization
598
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123
559
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115
Adjusted EBITDA
2,803
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(0
)
3,396
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65
Operating Results: Legacy-Huazhu(1)
Number of hotels
Number of rooms
Opened in Q2 2024
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Closed (2) in Q2 2024
Net added in Q2 2024
As of June 30, 2024
As of June 30, 2024
Leased and owned hotels
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4
(10)
(6)
592
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84,814
Manachised and franchised hotels
563
(91)
472
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9,558
889,499
Total
567
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(101)
466
10,150
974,313
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(1) Legacy-Huazhu refers to H World and its subsidiaries, excluding DH. (2) The reasons for hotel closures mainly included non-compliance with our brand standards, operating losses, and property-related issues. In Q2 2024, we temporarily closed 12 hotels for brand upgrade or business model change purposes.
As of June 30, 2024
Number of hotels
Unopened hotels in pipeline
Economy hotels
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5,270
1,209
Leased and owned hotels
313
0
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Manachised and franchised hotels
4,957
1,209
Midscale, upper-midscale hotels and others
4,880
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2,057
Leased and owned hotels
279
8
Manachised and franchised hotels
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4,601
2,049
Total
10,150
3,266
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For the quarter ended
June 30,
March 31,
June 30,
yoy
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2023
2024
2024
change
Average daily room rate (in RMB)
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Leased and owned hotels
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384
346
375
-2.2%
Manachised and franchised hotels
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295
272
288
-2.3%
Blended
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305
280
296
-2.9%
Occupancy rate (as a percentage)
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Leased and owned hotels
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83.6%
81.0%
85.6%
+2.0 p.p.
Manachised and franchised hotels
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81.6%
76.8%
82.3%
+0.6 p.p.
Blended
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81.8%
77.2%
82.6%
+0.7 p.p.
RevPAR (in RMB)
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Leased and owned hotels
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321
280
321
0.1%
Manachised and franchised hotels
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241
209
237
-1.6%
Blended
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250
216
244
-2.0%
Same-hotel operational data by class
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Mature hotels in operation for more than 18 months
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Number of hotels
Same-hotel RevPAR
Same-hotel ADR
Same-hotel Occupancy
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As of June 30,
For the quarter
yoy
For the quarter
yoy
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For the quarter
yoy
ended June 30,
change
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ended June 30,
change
ended June 30,
change
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2023
2024
2023
2024
Advertisement
2023
2024
2023
Advertisement
2024
(p.p.)
Economy hotels
3,751
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3,751
198
190
-4.2
%
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235
225
-4.1
%
84.4
Advertisement
%
84.3
%
-0.1
Leased and owned hotels
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299
299
241
235
-2.6
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%
281
268
-4.6
%
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85.8
%
87.5
%
+1.7
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Manachised and franchised hotels
3,452
3,452
193
184
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-4.5
%
229
219
-4.1
Advertisement
%
84.3
%
83.9
%
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-0.3
Midscale, upper-midscale hotels and others
3,169
3,169
308
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299
-3.2
%
377
361
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-4.2
%
81.7
%
82.6
Advertisement
%
+0.9
Leased and owned hotels
260
260
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397
390
-1.9
%
481
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461
-4.3
%
82.5
%
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84.6
%
+2.1
Manachised and franchised hotels
2,909
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2,909
296
286
-3.3
%
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363
348
-4.2
%
81.6
Advertisement
%
82.4
%
+0.7
Total
Advertisement
6,920
6,920
257
248
-3.6
Advertisement
%
310
297
-4.1
%
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83.0
%
83.4
%
+0.4
Advertisement
Operating Results: Legacy-DH(3)
Number of hotels
Number of rooms
Unopened hotels in pipeline
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Opened in Q2 2024
Closed in Q2 2024
Net added in Q2 2024
As of June 30, 2024(4)
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As of June 30, 2024
As of June 30, 2024
Leased hotels
4
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(1)
3
87
16,789
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13
Manachised and franchised hotels
1
(1)
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–
49
10,763
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15
Total
5
(2)
3
Advertisement
136
27,552
28
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(3) Legacy-DH refers to DH. (4) As of June 30, 2024, a total of 2 hotels were temporarily closed due to repair work.
For the quarter ended
June 30,
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March 31,
June 30,
yoy
2023
2024
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2024
change
Average daily room rate (in EUR)
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Leased hotels
119
110
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124
4.0%
Manachised and franchised hotels
112
95
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112
0.1%
Blended
117
104
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120
2.7%
Occupancy rate (as a percentage)
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Leased hotels
69.4%
55.4%
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71.2%
+1.9 p.p.
Manachised and franchised hotels
63.8%
56.4%
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63.8%
+0.0 p.p.
Blended
67.1%
55.8%
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68.3%
+1.2 p.p.
RevPAR (in EUR)
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Leased hotels
83
61
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88
6.8%
Manachised and franchised hotels
71
54
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72
0.1%
Blended
78
58
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82
4.5%
Hotel Portfolio by Brand
As of June 30, 2024
Hotels
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Rooms
Unopened hotels
in operation
in pipeline
Economy hotels
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5,288
433,604
1,220
HanTing Hotel
3,883
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341,015
816
Hi Inn
512
26,183
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234
Ni Hao Hotel
348
25,935
148
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Elan Hotel
299
15,734
–
Ibis Hotel
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228
22,582
11
Zleep Hotels
18
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2,155
11
Midscale hotels
4,028
430,320
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1,465
Ibis Styles Hotel
108
10,679
19
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Starway Hotel
712
58,791
168
JI Hotel
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2,472
282,926
954
Orange Hotel
736
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77,924
324
Upper midscale hotels
801
110,897
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515
Crystal Orange Hotel
206
26,181
147
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CitiGO Hotel
35
5,248
7
Manxin Hotel
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147
13,441
87
Madison Hotel
110
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13,658
87
Mercure Hotel
182
29,082
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65
Novotel Hotel
30
6,740
16
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IntercityHotel(5)
81
14,802
101
MAXX(6)
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10
1,745
5
Upscale hotels
143
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21,337
86
Jaz in the City
3
587
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1
Joya Hotel
7
1,237
–
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Blossom House
69
3,031
71
Grand Mercure Hotel
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9
1,796
2
Steigenberger Hotels & Resorts(7)
55
Advertisement
14,686
12
Luxury hotels
15
2,234
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3
Steigenberger Icon(8)
8
1,721
2
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Song Hotels
7
513
1
Others
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11
3,473
5
Other hotels(9)
11
Advertisement
3,473
5
Total
10,286
1,001,865
Advertisement
3,294
(5) As of June 30, 2024, 23 operational hotels and 96 pipeline hotels of IntercityHotel were in China. (6) As of June 30, 2024, 5 operational hotels and 4 pipeline hotels of MAXX were in China. (7) As of June 30, 2024, 12 operational hotels and 5 pipeline hotels of Steigenberger Hotels & Resorts were in China. (8) As of June 30, 2024, 3 operational hotels and 1 pipeline hotel of Steigenberger Icon were in China. (9) Other hotels include other partner hotels and other hotel brands in Yongle Huazhu Hotel & Resort Group (excluding Steigenberger Hotels & Resorts and Blossom House).
_________________________________
1 Hotel turnover refers to total transaction value of room and non-room revenue from H World hotels (i.e., leased and operated, manachised and franchised hotels). 2 The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB7.2672 on June 28, 2024, as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm. 3 The conversion of Renminbi (“RMB”) into United States dollars (“US$”) is based on the exchange rate of US$1.00=RMB7.2672 on June 28, 2024, as set forth in H.10 statistical release of the U.S. Federal Reserve Board and available at http://www.federalreserve.gov/releases/h10/hist/dat00_ch.htm.
When you’re running a business of whatever size, it’s critical to know your numbers – but when you’re running the finances for 22 schools, it’s even more imperative to get your maths right.
Established in 2016, Sapientia Education Trust (SET) is responsible for more than 8,500 pupils and 1,300 staff across Norfolk and Suffolk. However, until 2022, the administration of its finances was still being done the old school way – manually – with piles of paper-based files and spreadsheets.
Steven Dewing, SET’s chief financial officer, says: “When I joined in September 2021, the team were struggling. The trust was recovering after Covid, and getting invoices paid on time and reports delivered on time was a challenge.”
The system being used by the trust was adopted back when it encompassed just five schools. By the time Dewing joined, the number of schools had risen to 15 – each with its own database and no sharing of data. “There were lots of silos.”
Dewing recalls how his deputy needed a whole day each month simply to reconcile it all, with numbers pulled out and manually put on to consolidated spreadsheets. Only then could data be manipulated into the right formats needed.
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“That was not uncommon for finance departments,” he says, “but it is very prone to error. Also, invoices were being manually signed, requisitions were written by hand, and because we had a different system for each school, we couldn’t join these up. People physically carried around loads of paper, so it was hard to maintain compliance.”
‘Everything in one database’
All this changed in September 2022 when SET moved to a new system, Sage Intacct, which was rolled out with the support of ION, a Sage Education implementation partner.
And for a trust that includes the country’s largest state boarding school with 1,400 children alongside small, rural primary schools with as few as 16 pupils, the finance platform was a gamechanger.
The trust includes the country’s largest state boarding school
“Now we have everything in one database,” says Dewing. “Each school is still its own entity, but it’s all shared so there is no manual reconciling, it all just happens in the system.”
He adds that using Intacct has also meant SET can combine purchasing across the trust, allowing it to benefit from economies of scale and supplier discounts, while reducing the admin of having to purchase across all its schools.
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He also highlights the platform’s ease of use and describes how having access to personalised dashboards for every user has been a massive step forward. “We used to pull out data and then email it to people,” he says, “but now depending on what level you are and what your role is, there are different dashboards. Users can go in and see information whenever they want and drill down to the transaction. It has enabled us to empower them with data they need, when they need it.”
Successful use cases for this part of the implementation include head teachers in SET’s small rural schools seeing an accurate and real-time position of their finances, with staff able to login from any location any time to study the data and reports.
“What’s good is we can pull in non-financial information too, like pupil numbers and staff numbers,” adds Dewing. “You can then combine that with other data to give cost per student, cost per staff member, and much more, without any Excel manipulation.”
Adding up the time saved with AI
Within SET’s finance department, a pool of four people is responsible for multiple schools reporting to Dewing. Below this there are others who input transactions, invoices and payments.
To ensure the department was up to speed from day one, ION provided training in Sage Intacct during the onboarding process. It offered Dewing and his colleagues a structured programme, which the CFO says was a major help given “it’s a really big bit of software with lots of different functionality”.
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AI tools have proved to be an invaluable timesaver for processing invoices
“Having someone guide you through it and teach you what it does, while making sure you’re doing the right things at the right time, was vital,” he says. “We broke the training down into four two-hour sessions rather than one whole day and also got them to record some short videos, which we continue to use.”
Dewing has found a number of Sage Intacct’s AI-driven tools particularly useful. For instance, Outlier Detection, which automatically spots data appearing in odd patterns and suggests corrections, and Accounts Payable Automation, which uses AI to populate invoices against purchase orders.
Given that SET processes more than 25,000 invoices a year, this represents a transformational timesaver for colleagues who no longer have to input the details themselves and simply now check over the AI-prepared documents.
Dewing cites this as just one key example of how the move to Sage Intacct has revolutionised what his finance team can do for the wider trust.
“It has enabled finance to move from a pure admin function, where you carry bits of paper around and get things paid, to a strategic partner in the organisation,” he says. It’s become less about ‘have we paid this on time or have we ordered that’, because that just happens through the system.
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“We can now spend far more time supporting people to take financial decisions and in budgeting. Sage Intacct has changed our relationships with the schools because they see what value we bring.”
Find out more about Sage Intacct and book a demo, at: sage.com
There’s no better time to start preparing your portfolio for volatility.
Stock prices may be surging, but many investors are having mixed feelings about the market.
While nearly 40% of investors still feel optimistic about the next six months, according to the most recent weekly survey from the American Association of Individual Investors, roughly 30% worry that stock prices will fall in the coming months.
Nobody can predict the future, especially the short term. But there are a couple of warning signs investors may want to pay attention to right now — along with some steps to prepare for a potential downturn.
Image source: Getty Images.
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Will the stock market crash in 2026?
There’s no way to predict what the market will do this year, but it can sometimes be helpful to use historical context to get a sense of what’s happened in similar circumstances. And there are two stock market metrics that have not-so-good news for investors.
First, the S&P 500 Shiller CAPE (cyclically adjusted price-to-earnings) ratio. This metric is based on the average inflation-adjusted earnings over the last 10 years, and it’s commonly used to determine whether the S&P 500 is over- or undervalued. The higher the figure, the more overvalued the index may be.
Historically, the average Shiller CAPE ratio sits at around 17. As of February 2026, though, this metric is nearing 40. This is the second-highest value in history, next to the peak prior to the dot-com bubble in the early 2000s.
S&P 500 Shiller CAPE Ratio data by YCharts. CAPE Ratio = cyclically adjusted price-to-earnings ratio.
The second metric to watch is the Buffett indicator, which measures the ratio of U.S. gross domestic product (GDP) to the total market value of U.S. stocks. It was popularized by Warren Buffett, who explained in a 2001 interview with Fortune magazine how he used the metric to correctly predict the dot-com bubble burst.
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“For me, the message of that chart is this: If the percentage relationship falls to the 70% or 80% area, buying stocks is likely to work very well for you,” he said. “If the ratio approaches 200% — as it did in 1999 and a part of 2000 — you are playing with fire.”
As of this writing, the Buffett indicator sits at 221%. The last time the metric neared 200% was in November 2021, just before stocks entered a bear market that would last nearly a year.
What should investors do right now?
No stock market metric is perfect, as past performance doesn’t predict future returns. Even if there are strong historical patterns suggesting a downturn could be looming, that doesn’t necessarily mean a crash, recession, or bear market is imminent.
Perhaps the best thing investors can do right now is ensure their portfolios are prepared for volatility, just in case. That involves double-checking that you’re only investing in stocks with strong fundamentals, such as:
Healthy finances: A company needs to be on a solid financial footing to survive an economic downturn. Shaky companies can still thrive when the market is surging, so stock price alone isn’t necessarily a sign of financial health. Now is a good time to comb through financial statements to review metrics such as profitability, debt, revenue growth, and other factors that can indicate whether a company is likely to survive tough economic times.
Competitive advantage: When the dot-com bubble burst in the early 2000s and much of the tech sector collapsed, the companies that survived were those that had a leg up over their peers. Organizations that didn’t offer anything unique or had nonviable business models crashed and burned, and the same could happen again if we face another significant downturn.
A strong leadership team: Sometimes, a company’s survival depends on the decisions by leadership during pivotal moments. Even a strong business may struggle if the executive team consistently makes poor choices, making this a key factor for long-term success.
The stronger your portfolio, the more likely it is that it will survive even the worst bear market or recession. By double-checking all your investments now, you’ll be prepared no matter what may lie ahead.
Fifty years ago, the U.S. Supreme Court decided Buckley v. Valeo, legitimizing the idea that spending money in elections is a form of free speech. Thirty-four years later, Citizens United v. FEC went even further, granting corporations and unions, not just individuals, the right to spend unlimited sums to influence American elections.
These rulings, and the distorted view of the First Amendment behind them, have had serious consequences. Nearly $15 billion was spent in the 2024 election cycle alone, even as large majorities of Americans agree that money in politics is a threat to our elections. Here in Oregon, where we value civic participation and close-to-the-voter elections, it’s increasingly difficult for ordinary voters to compete with massive outside spending.
Even at the state and local level, Oregonians have limited authority over how money operates in our elections. That power has been centralized in the hands of unelected judges who were never meant to write election policy for the entire nation. It’s part of why everything feels so broken: a system where citizens cannot govern the rules of their own elections is not sustainable.
There is hope. A constitutional amendment would restore the ability of Congress and the states, including Oregon, to set reasonable limits on money in politics. Our nation is at a turning point, and we need to take action now. I encourage my fellow Oregonians to learn more about this vital issue, and urge our elected officials to support a constitutional amendment that will allow us to create common sense limits on the power of money in our elections.
Maud McCole, Eugene
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Other things to consider about Good, Pretti deaths
While we all can agree that the deaths of the two protesters in Minneapolis were regrettable, it should be noted that those deaths were entirely preventable.
First and foremost, the incompetent and corrupt Biden administration allowed millions of illegal aliens into the United States without any sort of vetting or other means of identification.
Second, the sanctuary city policy of Minneapolis makes it very difficult for law enforcement to do their job. This, coupled with a fawning media and cowardly politicians cheering on and encouraging lawlessness, contributed largely to the deaths of Renee Good and Alex Pretti.
Raymond Moreno, Eugene
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Support lodging tax increase for wildlife
The most important bill (to these readers) in the 2026 legislative session is HB 4134: “1% for Wildlife.” It adds 1.25% — less than the cost of a cup of coffee a day — to the statewide Tourism Lodging Tax (TLT). This legislation had bipartisan support in the 2025 legislature, but failed to get a floor vote in the Senate before adjournment. Funds raised with this fee go directly to Oregon Department of Fish and Wildlife for wildlife and habitat conservation. They assure a sustainable funding stream in the face of uncertain federal funds. This year’s bill adds .25% for wildlife stewardship and rehabilitation programs, including wolf depredation compensation.
Biological diversity — both floral and faunal — knows no geopolitical bounds nor ecological/economic bounds. Wildlife species, and their habitats, abound in Oregon. They transcend whatever artificial bounds we attempt to place upon them. Local, national, and international tourists visit throughout every year to enjoy our oceans, forests, valleys, mountains, watersheds, meadows, and deserts. Thus, in addition to the intrinsic ecological value of biodiversity, the economic value of our wildlife exceeds the investment to sustain it. From whale watchers to bird watchers, hunters to fishers, wildlife opportunities abound. Let’s make sure they stay that way.
Please urge your state representative and senator to vote YES on HB 4134.
David and Judy Berg, Eugene
Former Minneapolis residents horrified
As former residents of South Minneapolis, we are observing the horrifying, sad andgratifying events unfolding in real time; the horrifying killing of Renee Nicole Good, and Alex Pretti, then the sad adolescent, cruel and destructive response of the Trump administration and his sycophants.
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What’s gratifying is to see the same savvy and united uprising of the activist neighborhood, many public officials, and the Twin Cities, and now in Eugene, Springfield, and the many other Oregon towns. Stay strong until ICE stands down and is held accountable.
“I’m not mad at you,” she said, and then Renee Nicole Good was dead …then Alex Pretti…???
Jan Nelson, Edward Winter and Rebecca La Mothe, all Eugene, et al.
Not all protesters are vandals
The First Amendment gives us the right to peacefully assemble and to petition the government for a redress of our grievances. To me, this is more than a right. It is my responsibility. If the citizens had not risen up in 1776 in the American Revolution, we would be an English territory under a king. That would have served the king well, but not the rest of us.
So I peacefully assemble and protest against anything that infringes on my freedom or the freedom of others; against anything that goes against the protections of the Constitution’s due process of law. I protest ICE and the many laws they break to meet quota.
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I stand on the corner with my sign and I glory in the endless stream of cars honking in agreement and the occasional middle finger. It is invigorating to see the American spirit is alive and well.
Last Friday, during this peaceful gathering on Seventh and Pearl, a second, smaller gathering took place with a different approach at a slightly different location. They made loud noises and banged on the federal building office windows to the point of breaking the glass. The message was clear and the response was predictable.
I do not favor violence to any degree, from protesters or ICE agents. It draws attention away from the message we had congregated to express. But, I caution myself and others to not use disruption, broken windows or spray paint as an excuse to lump together the entire protesting world, imposing the identity of the minority with the entire movement.
Some people are horribly disturbed at the breaking of windows and spray paint. I’m against it, too. But I am more horrified at what is happening to citizens and guests in the U.S. by the violent and illegal grabbing of people off the streets — like they did in WWII Germany to the Jewish population. So if we are outraged at a broken window more than we are outraged at cruel and atrocious illegal arrests without warrant or due process, we need to rethink our stance and our purpose.
Candy Neville, Eugene
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