October 18, 2016

China Lodging Group, Limited Announces Its Preliminary Results for Hotel Operation in the Third Quarter of 2016

SHANGHAI, China, Oct. 18, 2016 (GLOBE NEWSWIRE) -- China Lodging Group, Limited (NASDAQ:HTHT) ("China Lodging Group", "Huazhu", or the "Company"), a leading and fast-growing multi-brand hotel group in China, today announced its preliminary results for the hotel operation in the third quarter ended September 30, 2016.

Operating Metrics

 For the quarter ended
 September 30,June 30,September 30,
  2015  2016  2016
Occupancy rate (as a percentage)   
  Leased and owned hotels 91% 87% 90%
  Manachised hotels 89% 85% 89%
  Franchised hotels 73% 71% 74%
  Blended 89% 85% 89%
Average daily room rate (1) (in RMB)  
  Leased and owned hotels 207  210  217 
  Manachised hotels 179  175  186 
  Franchised hotels 187  181  194 
  Blended 188  184  194 
RevPAR (1) (in RMB)   
  Leased and owned hotels 188  182  195 
  Manachised hotels 159  150  166 
  Franchised hotels 137  128  144 
  Blended 167  157  173 
(1) Value-added tax ("VAT") has been implemented for hospitality industry to replace business tax in China, effective May 1, 2016. The Company's room rates quoted and received from customers are tax-inclusive (business tax or VAT) before and after the implementation of VAT. For comparison purposes, the ADR and RevPAR disclosed in this release are based on the tax-inclusive rates.


Like-for-like performance for leased and manachised hotels opened for at least 18 months during the current quarter
 
 As of and for the quarter ended 
 September 30, yoy
  2015  2016 change
Total    2,050    2,050  
  Leased hotels   588    588  
  Manachised and franchised hotels   1,462    1,462  
Occupancy rate (as a percentage) 91% 91% 0.2%
Average daily room rate (in RMB) 188  189  0.4%
RevPAR (in RMB) 171  172  0.5%
 

Hotel Development

 Number of hotels in operation Number of rooms in operation
 Opened Closed (2) Net added As of  Net added As of 
 in Q3 2016in Q3 2016in Q3 2016September 30, 2016 in Q3 2016September 30, 2016
Leased and owned hotels8   (10)   (2)625   3577,158
Manachised and franchised hotels  163   (77)   86   2,573   7,939245,627
Total  171    (87)   84    3,198    7,974   322,785
        
(2) The hotel closure in Q3 2016 was higher than the previous quarters because:
a) In order to increase the product qualities, Huazhu removed 44 of the manachised and franchised hotels related to HanTing, Hi Inn, Elan and Starway from Huazhu's network for incompliances with the brand and operating standards.
b) Huazhu removed 15 franchised and 1 manachised hotels under ibis and ibis Styles brands after completion of legal procedures for termination. The financial impact from such removal is not significant because these hotels have not been integrated into Huazhu's operating platform for operation and management fee purposes.
Other common reasons for hotel closure including contract expiration, rezoning and others.


 Number of hotels in pipeline
as of September 30, 2016
Leased hotels  23
Manachised and franchised hotels  482
Total(3)  505
(3) Including 38 hotels under brands of ibis, ibis Styles and Mercure.
  

Business Update by Segment

Hotel breakdown by segment 
  
 Number of hotels in operation
 Net added As of 
 in Q3 2016September 30, 2016
Economy hotels   45    2,771
HanTing Hotel   44   2,149
Leased hotels   -    492
Manachised hotels   43   1,656
Franchised hotels   1   1
Hi Inn   15   373
Leased hotels   (1)  36
Manachised hotels   8   293
Franchised hotels   8   44
Elan Hotel   (1)  179
Manachised hotels   (3)  146
Franchised hotels   2   33
ibis Hotel   (13)  70
Leased hotels   -    13
Manachised hotels   1   14
Franchised hotels   (14)  43
Midscale and upscale hotels   39    427
JI Hotel   27   256
Leased hotels   -    78
Manachised hotels   27   176
Franchised hotels   -    2
Starway Hotel   5   141
Leased hotels   (1)  2
Manachised hotels   10   94
Franchised hotels   (4)  45
Joya Hotel   -    5
Leased hotels   -    2
Manachised hotels   -    3
Manxin Hotels & Resorts   1   3
Leased hotels   (1)  - 
Manachised hotels   2   3
ibis Styles Hotel    2   8
Manachised hotels    3   5
Franchised hotels    (1)  3
Mercure Hotel   3   11
Leased hotels   1   2
Manachised hotels   2   8
Franchised hotels   -    1
Novotel Hotel   1   2
Manachised hotels   -    1
Franchised hotels   1   1
Grand Mercure    -    1
Franchised hotels   -    1
Total   84    3,198


Same-hotel operational data by segment           
 Number of hotels in operationSame-hotel RevPAR Same-hotel ADR Same-hotel Occupancy 
 As ofFor the quarter ended For the quarter ended For the quarter ended 
 September 30,September 30,yoy
change
September 30,yoy
change
September 30,yoy
change
 201520162015201620152016 2015  2016 
Economy hotels  1,868  1,868161160 -0.8%177175 -0.8% 91% 91% 0.0%
Leased hotels  518  518167165 -0.9%184183 -0.5% 91% 90% -0.3%
Manachised and franchised hotels  1,350  1,350159157 -0.8%173171 -0.9% 92% 92% 0.1%
Midscale and upscale hotels  182  182245263 7.5%284299 5.5% 86% 88% 1.6%
Leased hotels  70  70285311 8.9%317339 6.9% 90% 92% 1.6%
Manachised and franchised hotels  112  112207218 5.7%250259 3.7% 83% 84% 1.6%
Total  2,050  2,050171172 0.5%188189 0.4% 91% 91% 0.2%

About China Lodging Group, Limited

China Lodging Group, Limited is a leading hotel operator and franchisor in China under 12 brand names. As of September 30, 2016, the Company had 3,198 hotels or 322,785 rooms in operation in 365 cities. With a primary focus on economy and midscale hotel segments, China Lodging Group's brands include Hi Inn, HanTing Hotel, Elan Hotel, JI Hotel, Starway Hotel, Joya Hotel, and Manxin Hotels & Resorts. The Company also has the rights as master franchisee for Mercure, Ibis and Ibis Styles, and co-development rights for Grand Mercure and Novotel, in Pan-China region.

The Company's business includes leased, manachised and franchised models. Under the lease model, the Company directly operates hotels typically located on leased properties. Under the manachise model, the Company manages manachised hotels through the on-site hotel managers it appoints and collects fees from franchisees. Under the franchise model, the Company provides training, reservation and support services to the franchised hotels and collects fees from franchisees but does not appoint on-site hotel managers. The Company applies a consistent standard and platform across all of its hotels. As of September 30, 2016, China Lodging Group operates 24 percent of its hotel rooms under lease model, 76 percent under manachise and franchise models.

For more information, please visit the Company's website: http://ir.huazhu.com.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: The information in this release contains forward-looking statements which involve risks and uncertainties. Such factors and risks include our anticipated growth strategies; our future results of operations and financial condition; the economic conditions of China; the regulatory environment in China; our ability to attract customers and leverage our brand; trends and competition in the lodging industry; the expected growth of the lodging market in China; and other factors and risks detailed in our filings with the Securities and Exchange Commission. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, which may be identified by terminology such as "may," "should," "will," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," "forecast," "project," or "continue," the negative of such terms or other comparable terminology. Readers should not rely on forward-looking statements as predictions of future events or results.

The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

Contact Information
Ida Yu
Sr. Manager of Investor Relations
Tel: 86 (21) 6195 9561
Email: ir@huazhu.com
http://ir.huazhu.com


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