The Zhitong Finance App learned that on March 20, 2024, Huazhu Group (HTHT.US,01179) announced financial results for the fourth quarter and full year of 2023. According to financial reports, Huazhu's revenue for the fourth quarter of 2023 was 5.6 billion yuan (RMB, same unit), an increase of 50.7% over the previous year, which is better than the guideline; the hotel's turnover was 20.4 billion yuan, an increase of 55% over the previous year. Looking at the full year, Huazhu achieved revenue of 21.9 billion yuan, an increase of 57.9% year on year; turnover reached 80.4 billion yuan, an increase of 62.1% year on year.

Jin Hui, CEO of Huazhu Group, said, “Driven by strong demand for leisure travel and continued recovery in business travel, Huazhu China's average rentable room revenue in 2023 recovered to 122% of 2019 levels, and the recovery rate for the whole year also increased quarterly. Looking ahead, while continuing to implement lean development strategies and high-quality network development, we will pay more attention to improving service quality and improving guest experience to achieve excellent service.”

Deeply cultivate China and push forward supply-side reforms in depth

In 2023, a vibrant mobility market is returning. According to public data, the number of domestic travelers for the whole year was 4.891 billion, an increase of 2,361 billion over the previous year, and an increase of 93.3% over the previous year. The total travel expenses of domestic tourists were 4.91 trillion yuan, an increase of 2.87 trillion yuan over the previous year, and an increase of 140.3% over the previous year. What is reflected behind these figures is the Chinese travel boom, and cultural tourism and business travel are rapidly heating up.

The warmth brought about by the recovery in the travel market also spread to the hotel industry as soon as possible. Driven by strong occupancy rates, Huazhu China RevPar (revenue per available room) also showed a good recovery trend during the same period. Since February 2023, Huazhu China's monthly RevPAR recovery rate has remained above 115% compared to 2019, and recovered to 122% of 2019 throughout the year.

In 2023, Huazhu will continue to further promote the development layout of deepening China and the mass market with budget and mid-range hotels as the core. By the end of the year, Huazhu Group operated 9,394 hotels with 912,444 guest rooms in 18 countries. Among them, Huazhu China has 9,263 operating hotels. 1,641 new stores were opened throughout the year, and the number of hotels to be opened was 3,061, all of which reached record highs. Currently, 92% of the hotels in operation in Huazhu China are budget and mid-range brands, 85% of the hotels to be opened are budget and mid-range brands, and 90% of the new stores to be opened in 2023 are budget and mid-range brands.

Huazhu insists on high-quality development and continues to promote “supply-side structural reforms” in the industry. With the Hanting brand, which represents its budget hotels, and the all-season and orange brands representing mid-range hotels as the core, Huazhu China is further promoting product upgrades and iterations.

In terms of Hanting brands, the share of Hanting 2.7 and above products increased from 34.3% in 2020 to 71.2% in 2023. As the oldest brand of the Huazhu Group, Hanting continues to use innovation to lead the standards of the times for budget hotels, and has become a national hotel that makes Chinese people feel happy and warm.

Picture: Hanting 3.5 Brand New Hotel

The full season brand launched a new 5.0 product. In terms of product design, the new full season 5.0 gives people a relaxed, blank, and natural sensory experience; at the same time, all season 5.0 implements the concept of sustainable development from the design source to reduce environmental pollution and energy consumption; in addition, all season 5.0 also has new explorations and breakthroughs in the hotel space business model.

Picture: All Season 5.0 New Hotels

The Orange brand launched a new LEVO product in 2022. At present, Orange Happy's products account for 58% of Orange hotels to be opened, and have been widely welcomed by the market.

Picture: Orange 3.0 New Product Hotel

Tap into multi-dimensional value and achieve long-term lean growth

This year's government work report mentioned culture and tourism in many places, clearly vigorously developing the cultural industry and actively cultivating new consumption growth points such as recreational tourism.

Looking ahead to 2024, Huazhu China will focus on lean growth centered on excellent service and increase the development of high-quality networks. On the one hand, it will continue to focus on the Hanting, Quanji, and Orange brands to strengthen penetration in low-tier cities and empty markets; on the other hand, promote the development of high-end hotels through multi-brand strategies. For the whole of 2024, Huazhu expects to open around 1,800 new hotels.

At the same time, Huazhu will also pay more attention to improving service quality and customer experience, enhancing the guest accommodation experience through product upgrades and excellent service, and improving management and efficiency through comprehensive digitalization.

Huazhu International's performance in 2023 was stable, with RevPAR (revenue per available room) growing 14.5% year over year. In the new year, Huazhu Group will continue to promote overseas asset-light transformation, continue to focus on cost reduction and efficiency, strengthen direct sales through the Huazhukai Global Member Benefit System, and explore incremental opportunities in the Asia-Pacific and Middle East regions.

In an age of resilience, Huazhu Group's growth certainty continues to converge and increase. By exporting high-quality products and excellent services, Huazhu Group is leading the process of high-quality recovery in the hotel industry. As the popularity of the travel market spreads from 2023 to 2024, Huazhu Group will also seize the opportunity to continue to provide high-quality supply to the market and contribute Huazhu's strength to the sustainable development of the industry.