The latest: Hotelier H World Group Ltd. (HTHT.US; 1179.HK) announced Tuesday that revenue per available room (Revpar) for its legacy Huazhu business in the first quarter recovered to 118% of pre-pandemic levels in 2019. Its best performance came in February, when Revpar, a standard hotel industry benchmark, reached 140% of 2019 levels.
Looking up: The company attributed the strong recovery primarily to the release of pent-up travel demand in the period following the end of most Chinese Covid restrictions in December, as well as higher average daily room rates.
Take Note: The overall occupancy rate for the company’s hotels in the first quarter was 75.6%, a 16.4 percentage point increase year-on-year, but still short of the 84% rate for all 2019.
Digging Deeper: H World is a China-based hotel group that had nearly 810,000 rooms in 8,543 hotels both inside and outside China at the end of last year. The company’s low-cost Hanting chain is the backbone of its business, and it operates higher-end brands like Mercure, Ibis and Ibis Styles in China through a strategic partnership with France’s Accor (AC.PA). The company’s revenue grew 8.4% year-on-year last year, benefiting from the start of a tourism recovery for its hotels in international markets outside China. But it recorded a 1.82 billion yuan ($263 million) loss for the year due to Covid restrictions in China, as well as increased operating and administrative costs.
Market Reaction: H World’s New York-listed shares slipped 0.2% on Tuesday after the announcement. But its Hong Kong-listed shares rose on Wednesday to close up 4% at HK$36.15 by the midday break. They now trade at the upper end of their 52-week range.
Translation by Jony Ho
To subscribe to Bamboo Works free weekly newsletter, click here