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China Lodging Group, Limited Reports First Quarter Of 2013 Financial Results

Stocks in this article: HTHT

  • A total of 1,105 hotels or 120,560 hotel rooms in operation as of March 31, 2013
  • Net revenues totaled RMB866.9 million (US$139.6 million) 1 for the first quarter of 2013, an increase of 33.5% year-over-year, exceeding the high end of previously announced guidance.
  • Adjusted EBITDA from operating hotels (non-GAAP) 2 was RMB161.7 million (US$26.0 million) for the first quarter of 2013, an increase of 45.7% year-over-year.
  • Net income attributable to China Lodging Group was RMB0.1 million (US$0.01 million) for the first quarter of 2013, compared to net loss of RMB9.4 million (US$1.5 million) a year ago. Excluding share-based compensation expenses, adjusted net income attributable to the Company (non-GAAP) was RMB7.7 million (US$1.2 million) for the first quarter of 2013, compared to adjusted net loss of RMB6.1 million (US$1.0 million) a year ago.
  • Diluted net earnings per ADS 3 were RMB0.00 (US$0.00) for the first quarter of 2013.Excluding share-based compensation expenses, adjusted diluted net earnings per ADS (non-GAAP) was RMB0.12 (US$0.02) for the first quarter of 2013.
  • China Lodging Group has revised up the full year manachised hotel opening target to approximately 300 and expected Q2 net revenues growth of 27% to 29%.

SHANGHAI, China, May 8, 2013 (GLOBE NEWSWIRE) -- China Lodging Group, Limited (Nasdaq:HTHT) ("China Lodging Group" or the "Company"), a leading and fast-growing multi-brand hotel group in China, today announced its unaudited financial results for the quarter ended March 31, 2013.                               

First Quarter 2013 Operational Highlights

  • During the first quarter of 2013, the Company opened 19 net leased ("leased-and-operated") hotels and 70 net manachised ("franchised-and-managed") hotels. As of March 31, 2013, the Company had 484 leased hotels, 586 manachised hotels, and 35 franchised Starway hotels in operation across 191 cities. The leased and manachised hotel rooms in operation increased by 35% and 79%, respectively, from a year ago.
  • As of March 31, 2013, the Company had a total pipeline of 398 new hotels, including 76 leased hotels and 322 manachised hotels.
  • Due to fast expansion, the Company had a higher percentage of hotels at the ramp-up stage during the first quarter of 2013 compared to the same period last year. In the first quarter of 2013, the leased and manachised hotels in operation for less than six months contributed 19% of the Company's total leased and manachised hotels' room nights available for sale, compared to 16% in the first quarter of 2012. The ramp-up hotels, as expected, had lower occupancy rate and RevPAR before becoming mature. In particular, the leased hotels at the ramp-up stage would incur similar amount of operational expenses as those at the mature stage, despite of lower revenue contribution.
  • The ADR, which is defined as the average daily rate for all hotels in operation (excluding franchised Starway hotels), was RMB172.5 in the first quarter of 2013, compared with RMB171.6 in the first quarter of 2012 and RMB176.1 in the previous quarter. The year-over-year increase of 0.5% was mainly attributable to an increase in same-hotel ADR, partially offset by the city mix shifting toward lower-tier cities and a higher percentage of new hotels at the ramp-up stage. The sequential decrease resulted mainly from seasonality.
  • The occupancy rate for all hotels in operation (excluding franchised Starway hotels) was 86.5% in the first quarter of 2013, compared with 90.7% in the first quarter of 2012 and 92.1% in the previous quarter. The year-over-year decrease was mainly because China's economy remained soft in the first quarter of 2013, and the Company's fast expansion led to a higher percentage of leased and manachised hotels at the ramp-up stage, compared to a year ago. The sequential decrease resulted mainly from seasonality and soft macro environment in the first quarter of 2013.
  • RevPAR, defined as revenue per available room for all hotels in operation (excluding franchised Starway hotels), was RMB149.2 in the first quarter of 2013, compared with RMB155.7 in the first quarter of 2012 and RMB162.2 in the previous quarter.
  • For all hotels which had been in operation for at least 18 months, the same-hotel RevPAR was RMB164.8 for the first quarter of 2013, a 1.1% increase from RMB163.0 for the first quarter of 2012, with a 3.2% increase in ADR and a 1.9 percentage-point decrease in occupancy rate. The increase in ADR was driven by price increase to enhance yield. The decrease in occupancy on same-hotel basis was mainly due to a soft macro environment in the first quarter of 2013.
  • As of March 31, 2013, the Company's loyalty program had over 10 million members, who contributed more than 90% of room nights sold during the first quarter of 2013. In the first quarter of 2013, 97% of room nights sold were sold through the Company's own channels.

"We are pleased with our robust growth of hotel chain in the beginning of 2013, exceeding 120,000 hotel rooms in operation. Despite the seasonally slow travel market in the first quarter, our same-hotel RevPAR for all hotels in operation for at least 18 months improved by 1%, thanks to our strong brands and dynamic yield management approaches," said Mr. Qi Ji, founder, executive Chairman and Chief Executive Officer of China Lodging Group. "We opened 5 new JI Hotels, our midscale hotel brand, during the quarter. The same-hotel RevPAR for our JI Hotels in operation for at least 18 months improved by 4%, which demonstrates a promising growth momentum in a new segment."

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