China Lodging Group (the Company), a leading and fast-growing multi-brand hotel group in China, announced its unaudited financial results for the fourth quarter and full year ended December 31, 2017.
Highlights
- A total of 3,746 hotels or 379,675 hotel rooms in operation as of December 31, 2017.
- Net revenues increased 32.6% year-over-year to RMB 2,214.9 million (USD 340.4 million) 1 for the fourth quarter and 25.0% to RMB 8,170.2 million (USD 1,255.7 million) for the full year of 2017, at the high-end of guidance previously announced.
- EBITDA (non-GAAP) increased 22.9% year-over-year to RMB 450.7 million (USD 69.3 million) for the fourth quarter and increased 36.5% to RMB2,361.1 million (USD 362.9 million) for the full year of 2017.
- Net income attributable to China Lodging Group was RMB 229.4 million (USD 35.3 million) for the fourth quarter and RMB 1,237.2 million (USD 190.2 million) for the full year of 2017, increasing 82.3% year-over-year for the fourth quarter and increasing 53.8% for the full year of 2017.
- The Company provided guidance for Q1 2018 net revenues growth of 27% to 29% year over year and full year 2018 net revenues growth of 16% to 19% from 2017.
Q4 2017 Operational Highlights
- During the fourth quarter of 2017, China Lodging Group opened 137 hotels, including 2 leased ("leased-andoperated") hotels and 135 manachised ("franchised-and-managed") hotels and franchised hotels.
- The Company closed a total of 47 hotels, which included 15 leased hotels and 32 manachised and franchised hotels, during the fourth quarter of 2017.
- The ADR, which is defined as the average daily rate for all hotels in operation, was RMB211 in the fourth quarter of 2017, compared with RMB186 in the fourth quarter of 2016 and RMB218 in the previous quarter.
- The occupancy rate for all hotels in operation was 86.0% in the fourth quarter of 2017, compared with 84.7% in the fourth quarter of 2016 and 93.1% in the previous quarter.
- RevPAR, defined as revenue per available room for all hotels in operation, was RMB181 in the fourth quarter of 2017, compared with RMB158 in the fourth quarter of 2016 and RMB203 in the previous quarter.
- For all hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB172 for the fourth quarter of 2017, representing a 6.5% increase from RMB162 for the fourth quarter of 2016, with a 4.9% increase in ADR and a 1.3-percentage-point increase in occupancy rate.
Operational Highlights of FY 2017
- For the full year of 2017, the company opened 86 leased hotels and 579 manachised hotels and franchised hotels, and closed 39 leased hotels and 149 manachised and franchised hotels. As of December 31, 2017, the Company had 671 leased hotels, 2,874 manachised hotels, and 201 franchised hotels in operation in 378 cities. The number of hotel rooms in operation totaled 379,675, an increase of 14.6% from a year ago.
- As of December 31, 2017, the Company had a total number of 696 hotels contracted or under construction, including 37 leased hotels and 659 manachised and franchised hotels.
- For the full year of 2017, the ADR for all hotels in operation was RMB203, increasing 10.0% year-over-year from RMB185 in 2016. The occupancy rate for all hotels in operation was 88.3%, compared with 84.9% in 2016. As a result, the RevPAR for all hotels in operation was RMB180 in 2017, a 14.4% increase from RMB157 in 2016.
- The same-hotel RevPAR was RMB174 in 2017, a 7.7% increase from RMB in 2016, with a 3.7% increase in ADR and a 3.3-percentage-point increase in occupancy rate. In 2017, the economy hotels and the midscale and upscale hotels posted an increase of 7.4% and 8.2% in same-hotel RevPAR, respectively.
- As of December 31, 2017, the Company's loyalty program had approximately 103 million members, who contributed approximately 76% of room nights sold during the full year of 2017 and approximately 87% of room nights were sold through the Company's own direct channels.
2018 Guidance
- In the first quarter of 2018, the Company expects net revenues to grow 27% to 29% year-over-year. For the full year 2018, the Company expects net revenues to grow 16% to 19% from 2017.
- The Company anticipates the gross opening of 650-700 hotels in 2018, 60%-65% of which are midscale and upscale hotels.
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