H World Group (HTHT) Q3 2024 earnings summary

Executive summary

• Revenue grew 2.4% year-over-year to RMB 6.4 billion in Q3 2024, with Legacy-Huazhu up 1.0% and Legacy-DH up 8.9%.

• Hotel network expanded 20% year-over-year to nearly 1.1 million rooms, with 774 new hotels opened in Q3 and a focus on high-quality, sustainable growth.

• Adjusted EBITDA decreased 9.5% year-over-year to RMB 2.1 billion, impacted by restructuring costs and RevPAR pressure.

• Strategic operational adjustments and asset-light transition, including sales channel optimization and phasing out low-quality hotels, affected short-term performance but support long-term growth.

• Operating income reached RMB 1.7 billion, down 9.7% year-over-year, mainly due to RevPAR decline and higher SG&A expenses.

Financial highlights

• Group hotel revenue increased 2.4% year-over-year to RMB 6.4 billion; Legacy-Huazhu revenue up 1% to RMB 5.2 billion, Legacy-DH up 8.9% to RMB 1.3 billion.

• Adjusted net income was RMB 1.4 billion; net income attributable to the group was RMB 1.3 billion, flat year-over-year.

• Operating cash flow reached RMB 1.7 billion; cash and equivalents stood at RMB 9.3 billion, with a net cash position of RMB 4 billion.

• Hotel turnover rose 11% to RMB 26 billion.

• Paid RMB 1.4 billion in dividends during the quarter.

Outlook and guidance

• Q4 2024 group revenue expected to grow 1%-5% year-over-year, with continued RevPAR pressure and further closures of leased and owned hotels.

• RevPAR for Q4 projected to decline by mid-single digits year-over-year due to ADR pressure.

• RevPAR expected to stabilize and return to growth in 2025, supported by government policies and leisure travel demand.