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China Lodging Group, Limited Reports Second Quarter Of 2012 Financial Results

Stocks in this article: HTHT

  • Net Revenues increased 45.7% year-over-year for the second quarter of 2012, exceeding the guidance previously announced
  • Adjusted EBITDA from operating hotels (non-GAAP) 1 increased 48.5% year-over-year to RMB230.2 million (US$36.2 million) 2 for the second quarter
  • Adjusted net income attributable to China Lodging Group, Limited increased 68.5% year-over-year to RMB75.0 million (US$11.8 million) for the second quarter. Diluted net earnings per ADS 3 for the second quarter was RMB1.14 (US$0.18); adjusted diluted net earnings per ADS (non-GAAP) for the second quarter was RMB1.22 (US$0.19)
  • Excluding franchised Starway hotels, the Company's RevPAR grew by 4% year-over-year and same-hotel RevPAR grew by 7% year-over-year for the second quarter
  • The Company had a total of 863 hotels in operation and 377 hotels in pipeline as of June 30, 2012
  • The Company raised guidance for full year net revenues growth to 38% to 41%, up from previously announced range of 34.5% to 37.5%

SHANGHAI, China, Aug. 9, 2012 (GLOBE NEWSWIRE) -- China Lodging Group, Limited (Nasdaq:HTHT) ("China Lodging Group" or the "Company"), a leading and fast-growing limited service hotel chain operator in China, today announced its unaudited financial results for the quarter ended June 30, 2012.

Second Quarter 2012 Operational Highlights

  • As of June 30, 2012, the Company had 388 leased (or "leased-and-operated") hotels and 365 manachised (or "franchised-and-managed") hotels in operation, with 35 net new leased and 43 net new manachised hotels opened in the second quarter of 2012. In the second quarter of 2012, the Company completed the acquisition of a majority stake in Starway Hotels (Hong Kong) Limited ("Starway"). The acquisition of Starway added 110 franchised hotels to China Lodging Group's portfolio and strengthened the Company's leadership position in the mid-scale hotel market. Hotels in operation totaled 863 and covered 131 cities in China as of June 30, 2012.  
  • As of June 30, 2012, the Company had a pipeline of 112 leased hotels and 265 manachised hotels.  
  • The occupancy rate for all hotels in operation, excluding franchised Starway hotels, was 97% in the second quarter of 2012, compared with 93% in the second quarter of 2011, and 91% in the previous quarter. The year-over-year occupancy improvement was mainly attributable to robust travel demand and a more mature hotel mix. The sequential increase was mainly due to seasonality.  
  • The ADR, or average daily rate, for all hotels, excluding franchised Starway hotels, was RMB181 in the second quarter of 2012, compared with RMB182 in the second quarter of 2011 and RMB172 in the previous quarter. The year-over-year decrease was mainly attributable to the city mix shift of the Company's hotels towards lower tier cities, partially offset by the increase in same-hotel ADR. The sequential increase was mainly due to seasonality.  
  • RevPAR, defined as revenue per available room, excluding franchised Starway hotels, was RMB176 in the second quarter of 2012, compared with RMB170 in the second quarter of 2011 and RMB156 in the previous quarter. The year-over-year improvement in RevPAR was a result of a higher occupancy slightly offset by a lower ADR. The sequential increase was mainly due to seasonality.  
  • For all the hotels which had been in operation for at least 18 months, excluding franchised Starway hotels, same-hotel RevPAR was RMB195 for the second quarter of 2012, a 7% increase from RMB182 for the second quarter of 2011, with a 3% increase in ADR and a 4% increase in occupancy.  
  • As of June 30, 2012, HanTing Club had more than 6 million members, including individual members and e-members, and corporate members, who contributed more than 80% of room nights sold during the second quarter of 2012. In the second quarter of 2012, 96% of room nights sold were sold through the Company's own channels.

"In the first half of 2012, we made solid progress in the implementation of our multi-brand strategy. With the addition of Starway, we now have two brands, Seasons and Starway, to cover the mid-scale hotel market, and another two brands, HanTing Express and Hi Inn, to address the economy hotel market. Distinctively positioned in the marketplace, the four brands consist of both standardized, performance-oriented brands such as Seasons and Hanting Express, and variety-rich, design-oriented brands such as Starway and Hi Inn. Such a portfolio opens us up to a wide range of customers and provides us significant flexibility when consolidating various hotel assets in the market," commented Mr. Qi Ji, founder, executive Chairman and Chief Executive Officer of China Lodging Group.

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