Top Chinese hotel group Huazhu Hotels (China Lodging Group), reported RMB149.2 million in net income for Q2 2015 (RMB2.32 per ADS) compared to RMB124.2 million (RMB1.97 per ADS) for Q2 2014 while net revenues increased 16.9% to RMB1.46 billion from RMB1.25 billion a year ago according to its unaudited financial results for the Q2 ended June 30, 2015.
Excluding share-based compensation expenses, its adjusted earnings per ADS for the latest quarter were RMB2.53.
Analysts polled by Thomson Reuters expected the company to earn RMB2.07 Per ADS on revenue of RMB1.40 billion for the second quarter.
Q2 2015 Operational Highlights
- During the second quarter of 2015, the group added 207 hotels, opening of 223 and closing 16 hotels. It has 616 leased hotels, 1,731 franchised-and-managed hotels, and 37 franchised hotels in operation in 323 cities with a total of 246,344 hotel rooms in operation, up 37% y-o-y.
- Average daily rate (ADR) was RMB181 in Q2 2015, compared with RMB180 in Q2 2014 a y-o-y increase of 0.6% mainly attributable to more favorable brand mix with increased number of midscale hotels.
- Occupancy rate was 85.8% in Q2 2015, compared with 91.2% in Q2 of 2014. The decrease was mainly due to the soft Chinese macro economy and a dilutive impact from newly-opened hotels in lower-tier cities.
- RevPAR was RMB156 in Q2 2015 compared with RMB164 in Q2 2014 as a result of lower occupancy rate.
- Huazhu Hotel's loyalty program had more than 38 million members as of June 30, 2015, who contributed more than 80% of room nights sold during Q2 2015. More than 90% of room nights were sold through the group's own channels during the same period.
Business outlook and for Q2 2015
"We remain confident about the long-term prospects of the overall travel and lodging market in China. Thanks to our successful brand positioning and proven results, we have continued to see a robustly growing pipeline, with another record high of 740 hotels as end of second quarter this year. In particular, the number of manachised and franchised hotels in the pipeline grew by 57% year-over-year. We are excited about the growth of our core brand HanTing and the successful roll-out of our new brands among customers and franchisees," commented Mr. Qi Ji, founder, and Executive Chairman of China Lodging Group.
Mr. Ji added, "We focus on strengthening our diversified brand portfolio, building scale, elevating customer experience and generating profits to hotel owners through highly-efficient operations. We look forward to deliver long-term value to our shareholders."
The group expects net revenues for the third quarter of 2015 to grow 11.5% to 13.5% y-o-y and raised its annual net revenue forecast.
Recent developments
Huazhu Hotels had purchased approximately 0.77 million ADS in aggregate with a total consideration of US$17.5 million as of August 14, 2015.
See China Lodging Group Press Release
