HTHT - Earnings call transcript Q2 2021

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Operator

Good day, and thank you for standing by. Welcome to the Huazhu Group Limited Q2 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. like today. the would your over I speaker first Instructions] to conference hand to [Operator go please Jason, ahead.

Unidentified Company Representative

Huazhu quarter Karenna. evening, joining to everyone. you, Thanks XXXX Thank Good for us morning, today. conference interim earnings and and good Group's call. second Welcome

is CFO, today CEO, and our Ye CFO, Ms. Mr. Chen Founder our Officer, Ms. Fei Mr. Chief Ms. Li Hui; Hui; our our Digital Ji; Dong. and Liu President, us Joining Qi Jin Xinxin; Mr. our Deputy

be available will answer Following your their management prepared to questions. remarks,

Before please include that provision discussion forward-looking Private of the statements United harbor Act Securities the we safe XXXX. note continue, today Litigation Reform made will under of States the

Forward-looking statements inherent involve and uncertainties. risks

risks results different any in be materially outlined statements, our the expressed our applicable from public such, required filings today. update Huazhu to may except undertake uncertainties of not and as Group does by with are views As forward-looking potential any SEC. obligations the A number laws.

we adjusted found in those release the GAAP be measures can will of On was distributed information that also to Reconciliation during today, financial the our of performance. mention call comparable our discussion yesterday. measures earnings

this reminder, of conference slide is Ji. Ji, will I as over Mr. being conference recorded. call to this website supplementary on please. The Qi presentation Mr. With well webcast as Huazhu available now that, call call, is Group's a ir.huazhu.com. As at turn the

Qi Ji

joining June would to to Province May, but by us strong Good recovered RevPAR quarter, morning, to COVID-XX I supported China resurgence second control for traveling business. you offset recovery evening, of Beijing. today. and of period our in traffic you in weak Guangdong of demand same XXXX, good XXX% the our in by relatively an the due in In and Thank everyone. give like overview RevPAR leisure

government August. with posed variant late provinces However, was Chinese Delta detected strict of traveling prompted The and another seriously cities. Delta unfortunately, into affected July, in Nanjing of other variant spreading performance the restrictions, further which in again the since COVID-XX round many our

some XX% of XXXX with Our to recovering continued easing. restriction mainly business summer trend and due to saw the RevPAR vaccination European positive progress level the is of holiday during XX% to

future especially government we carefully the European Delta remain recovery the the and as impact German the situation are monitoring from governments, on cautious variant still a potential However, it. regarding

high such cities, segments, strategies, upscale further call sustainable hotel on support speeding as Thank organizational to may Nevertheless, ahead, the pandemic near-term. exist time, future China’s turbulences of growth long-term, in penetration and Therefore, for our of well upper-midscale business the quality be acquisition confidence lodging as think our as implementing economic longer-than-expected the we to prepared concentrating upgrades Looking remains I to Jin expect and brought by up China expansions to in overcome we recent we development. and business With high uncertainties you. growth. of a upward well to intact. the that, will talent trend any turn update the in and our be have industry lower-tier will the Hui

Hui Jin

Thank Qi. you, Ji

Page I'll business usual, turn Please recent As trend our to X. discuss detail. in recovery

For recovery the April in and XXX% XXX%, with RevPAR second May recovered and respectively. quarter, shows upward our trends to RevPAR

down. the resurgence our variants RevPAR August However, impose China. remaining demand due May, in as negatively was in and strict Qi and significantly our the affected that impacts cities in the to only from we another level. as was the control due Post base of for as wave impacts to XXXX again our of late as recovery June. since recovered the earlier, of XX, government affected Delta to season Beijing, recovery RevPAR our If of other in mentioned historical by traveling, COVID-XX slowed in traveling Delta detected which business July, late variant many Guangdong round on of RevPAR areas XX% and the the traveling a for Ji therefore, Beijing exclude Guangdong in traffic high normally COVID-XX track Nanjing since into spreading a from and August the Unfortunately, new June peak restrictions, was

However, of from the confirmed posed to contained the Page the wave turn good Please the recent peak. government, given by declined prevention X. been has Delta we significantly the saw variants newly largely measures case

further signings For is the XX% cities year-over-year. half tier hotel XX% high by lower our over achieved X,XXX same already tier this new of Lower for including proportion and penetrated operation year cities cities as time, penetration have period compared first at added in the we X,XXX hotels we June, year. Moreover, signings. both of pipeline the new over record number and accounted our cities for nearly current At development, a to accelerating. of increased same both the pipelines last the XXX hotel of into

travel X. as given that, the COVID-XX also recent the turn Delta were Page mentioned our note progress of variants we construction above, signings affected. Please and to new due to please restrictions negatively However,

will our opportunities. further multi-brand For we to segment, use strategy hotel upper-middle market exploring the

brand Our Orange, Novotel. Madison Intercity, up-middle includes Mercure, and Crystal hotel portfolio

of in As of XXXX, June, hotels XXX we total operation and in have XXX pipeline. upper-middle

pipeline upscale Steigenberger This X,XXX agreement X. to establish of a the to Porsche over announced we luxury between segment operation are into end hotel On globally. another We and in and targeting turn is X, the a Group Please Design hotels Page XXXX. in hotel breakthrough achieve by upper-middle July joint license a to and brand.

be prime help segment will international positioning brand other Porsche to are at and eight international upscale with to cooperation hotels of globally. Design in would enhance and brand XX planning Similar cooperation year It metropolises. us brands awareness more with open our in our in next luxury hotel to Steigenberger’s opportunities We future. catch further hotels the brand, least luxury area will in Those years. allocated

concerned to tier may you to on have. and please synergies generation Now to our our Page part lower most ability with that lower turn cities X. traffic penetration, membership the are Along cities program tier hotels

We higher demonstrated and see to tier our data to on happy our to close Please further the lower the highest priority bottom it constantly and ability in and security matters line X. that to tier lower cities CRS achieved contribution Huazhu. cities emphasize tier market. are to penetrating is turn Page to XX% very very We the for

First of all, set the committee securities information and up we have information established standard. security the

certificates are data received data lastly, our on Secondly, had And all to we set locally. security. various

XXXX, first in received certificate. ISOXXXXX groups, XXXX, As global Huazhu the in our year which shown one certificate became received which hotel of hotel and the ISOXXXXX of domestic in group, became slide, Huazhu

Security to Page X. Please PCI-DSS, turn Payment Industry-Data Standard certificate. Additionally, Huazhu has also opt-in to the Card

and Deutsche we plan ready days second functions part we so XXX of setup Hospitality, As quarter system all launched digitalization use. is and completed are for the to are and it,

now massive rollout. in stage are the We of

I We year. are XXX% now to With and financial that, second year call Ye completion operational rollout turn targeting our to XX% of end quarter of to next discuss Fei Ms. performance. this the hotels DH by will and the to

Fei Ye

Thank Good evening wherever to morning good and are. Hui. you, everyone Jin you

Let's move for on review XXXX. to our of operational and quarter the financial second

in network compared – As to year shown XXX,XXX quarter expanded our rooms. the XXX,XXX to the by quarter second last Slide second on rooms of XX% XX, hotel

by in quarter. expanded network the XX% XXX,XXX year-on-year second hotel Legacy-Huazhu DH, to Excluding roughly rooms

our then base second turnover due and continuous quarter. as second of in our It business our network the year. both China last to expansion grew the turnover For the in year-on-year recovery XX% was and the by operation in Hospitality's the total to mainly as billion China low Deutsche quarter, well hotel initial European RMBXX for

the second RMBXX.X RevPAR to X% in Legacy-Huazhu’s Guangdong The ADR by for year-on-year billion traffic XX% DH, XX. quarter is to hotel increase percentage Page second resurgence XXXX. XX% quarter which is compared occupancy especially X quarter and under second RMBXXX and recorded to XXXX driven model. XX. Turn to in by in asset-light the with in turnover compared second hotel Beijing to Province the due June. by the to X% Legacy-Huazhu’s also the Turn lower XXXX, blended grew in compared grew quarter RMBXXX. in the Excluding the was mainly control COVID-XX growth situation, second quarter while the network the mainly caused Page grew from to the XXXX, expansion The the if

saw second from last German vaccination Thanks continued imposed November. to progress lockdown ease. the since DH quarter a Our of business government the legacy in recovery and initial the restriction

second see X% last second XX to billion Our by the our financial XX. grew dropped revenues second ADR RevPAR second percentage occupancy the year, for The quarter Slide compared by compared to to Please RMBX.X on results to Total the grew quarter legacy quarter six percentage XXXX. improved DH year-on-year in €XX. XX% to the net while quarter blended €XX of XXXX. points the by

was as revenue before. percentage Excluding year-on-year in and DH, the to previous Guangdong due mainly rate slightly It our resurgence RMBX.X mentioned The Legacy-Huazhu’s was guidance. an to control traffic growth below XX in Beijing COVID-XX Province billion. recorded

Excluding the the revenue impact increased Breaking leased previous XX% by year-on-year mentioned with revenue guidance. second above down of owned RMBX.X areas, our to growth was the and actually from revenue in the the quarter, billion. line

quarter of the to leased Legacy-Huazhu. XX% the hotel the and by further in expanding by growth XX Net percentage XXXX RMBX.X to manachised XX with the grew model, revenue mainly second compared XX% by Excluding asset-light RMBX.X to grew franchised the in the Due DH, group enlarged franchised at and driven with the second revenue level. billion and contribution Legacy-Huazhu networks billion. to quarter revenue percentage XX% owned of manachised year-on-year hotels from year-on-year

year-ago. model XX percentage XXXX compared a percentage second manachised quarter Legacy-Huazhu, with expanded also franchised and XX For of to the the in

the a loss let's to RMBXXX both Slide compared mainly the to income to and due the reported Now million and RMBXXX business a loss in last million of recovery on section XX. China Europe. second to In turned cost a move of on and year RMBXXX million quarter the positive profitability ago operating quarter XXXX,

which growing RMBXXX upgrading the operating by networks costs, and second in costs the to related XXXX higher of XX% growth. the Legacy-Huazhu’s The increased amortization mainly of a rental XX% quarter income hotel indicating a and The hotels. RMBXXX level hotel hotel, million million year costs the second the existing expand driven higher billion the Excluding year-on-year RMBXXX upscale last for personnel [indiscernible] DH, to RMBX.X and The of and mainly XXXX of the costs quarter and recorded depreciation higher rapidly loss upscale Legacy-Huazhu, hotel quarter new were ago. costs, cost the which was we compared year-on-year. operation hotel billion loss of other was a operating hotel by our openings million operating D&A, a was as was attributable to increase RMBX.X

of expansion declined by costs therefore, pre-opening and XXXX. the only will use mainly quarters, Q-on-Q our mentioned we model, upscale quarter RMBXX XX% of the hotel to future As in million our in year-on-year second previous asset-light XX%

in SG&A second driven million, Legacy-Huazhu. Our increased mainly to RMBXXX XX% XXXX by of year-on-year the increase quarter the of by

for period. to to RMBXXX million, Excluding as the quarter increase Other upscale income of DH, the This by attributable headcounts to business subsidies the to cost due German SG&A mainly team] the cities, the and million. penetration for second the by and million related marketing increase of RMBXXX was of year-on-year XXXX increase of XXXX support mainly IT the selling lower-tier the for is lockdown XX% due well. €XX investment increase expenses Huazhu of to percentage [BD increase revenue to the in the our the recovery, increased increased received into The unit from government. operating to XXX personnel

to Turning Page XX.

a positive to subsidies. loss million loss DH’s narrowed to the turned government RMBX second billion RMBXX due EBITDA mainly income of quarter million to was RMBXX the year-ago. EBITDA last million compared RMBXXX from year adjusted in a Our

XXX net recorded of million percentage Legacy-Huazhu XXXX. of by quarter compared second a second adjusted of loss of XXXX, a RMBX.X million income in income EBITDA RMBXXX quarter DH, recorded billion adjusted of year-ago. In RMBXXX Excluding the to we the grow

investments. adjusted an of unrealized pro risk our the equities compared with fair RMBX.X quarter the second syndication the change million RMBXXX to net of loan. of in by from to forma net this covenants of compared excluded first or breaching some of of the US$X further million of and there recorded debt end We position. quarter, of gain The the loss Legacy-Huazhu XXXX. financial quarter cash by adjustment the RMBX.X second Coming income no lowered DH, on billion related our of value losses billion non-GAAP is end page Excluding RMBXXX billion the with mentioned

unforeseen path bank circumstances. Huazhu’s be unutilized also bank balance cash was billion. any CD will December weather people negative right and cash is recovered allow especially RMBX.X facilities the the bumpy. infection on or recovery has Our in RMBX.X and the injection would This Coming either billion from The the commenced update quarter Restriction second with speeding used XX. coming to XXXX. XXXX us bank COVID-XX further in and facilities Vaccination Page up to who pay was toward to would although debt of ease been XXXX since test XXXX is results. people also to and down complete direction DH’s and

headquarter one would of be subsidy also overhead QX and which at German The the whole XX, the The Meantime, ratio subsidy of July of extension would in is about August rate DH least received including taking partially is XXXX it's €XX from XXXX cash related cash, another recovery and lease reduce summertime. by occupancy subsidies, actions XX% to sufficient at of to August be hotel recorded allowance shot August the preserve fully QX, towards was in still The received month-to-date. As the XX% about the the which credit population company's million compared for short-term company in of both more now and in available. in negotiating have to lockdown. is impact further and population XX% position streamline offset vaccinated. been worker costs lockdown XX% QX, waivers, line XXXX and successfully has XX% XX% in The of and special about it's €XX about XX% and is still million government continuously DH’s relating working also the level. lockdown. the and government have to

Turning to revenue in late China to the Nanjing Beijing our full-year Guangdong resurgence and since Considering we traffic on impact COVID-XX QX control several guidance. the in recently, XX guidance. of of Delta Page and in and spreading impact lowered May, cities from variant

compared compared growth excluding DH. the of the to quarter range of To third X% XXXX, excluding provide net COVID-XX, in to XXXX meaningful X% if expects more be range of to in DH. to and the pre-COVID-XX Huazhu net of excluding third revenue range XX% a to will the and expects reduction revenue if XX% X% revenue in of X% quarter to net the of in will of impact For Huazhu guidance be be to the growth results third quarter XX% XXXX X% the

excluding XX% provide pre-COVID-XX excluding to XX% net to or revenue in the growth expect the the impact range September. For the COVID-XX the COVID-XX, range X% the DH. results current of XX% now full-year resurgence note Please range to net To of more guidance our Huazhu that to of XXXX, well the of we to the with from XX%, from based guidance to be Delta on to from of revenue meaningful XX% expectation be XX% of is by if recent XXXX, expects X% variant beginning DH. growth will range revenue that the contained excluding compared can or if

adjust to when uncertain need we guidance However, [indiscernible] given unpredictable of Huazhu future our situation the and accordingly.

opening speed of that, pipeline next the hotels the signing Q&A. construction new of X,XXX and the be will in We hotels as gross months of well. new unchanged, the open but for also X,XXX the few the let's keep and up affected With targets

Operator

Instructions] Your Please your [Operator from of the comes question line Tian T.H. from first question. Capital. Hou ask

Tian Hou

many channel COVID? how morning, and us So number in Good you always like in guidance, is Will pop with here up. guidance hotel for on give is what see It well member your demands questions. you as and color what the of – the I new XQ, terms as one in COVID in saturation? So Yes. seems what QX acquisition? see added please question. two, there newly some management. and that you two – have Number your China do members QX member do traveling,

see So – in Thank the this guidance, guidance domestic What's wonder already base guidance? in I much your for how how you. just QX your do you – guidance?

Chen Hui

[Foreign Language] Okay.

Let me to English. the translate

we then million recruitment best And the from continue the Hui first that question. X ways the answer important, innovation. the think I QX with our but encouraged Anyway, can team think of a local just increased, lot develop BXB recruitment, practice I and okay. In number the frequency, from the membership choose mostly sales do And We to corporate this – is choose we I Mr. and Jin team the BXBXC and BXC three, team. to question. that partnership second number also membership with the can do the something something for was develop sales useful external, my and or Alipay to member like the the the member make second WeChat, the something for hotel-based the like you. okay. I as wave Thank do I kind But this had many just like with That's from question this – even BXBXB, such to [indiscernible] the DT. for partnership one. from of think with the number We such sure as and recruitment. mean is

Hui Jin

and For guidance, has recently. Chinese our that’s affected that control to very government imposed strict admit really we a prevention QX business and traveling revenue restriction have the measurement, performance our

I For expectation on no on the XX% based massive RevPAR very the expecting mentioned fourth XXXX XX% quarter current happen in in revenue we level, level previously be will XX% XXXX our Again, the you. resurgence RevPAR current of again our recovered quarter guidance, COVID-XX for the hotel prepared on Thank there in remaining much the this quarter are estimate of to guidance remarks, of the a to the in XX% – level. as the and QX my will year. focus to and be and third full-year recovery are same guidance third for

Tian Hou

questions. Thank you. That’s all my

Operator

question. from Choudhary Praveen Morgan of line the from ask comes Stanley. your question next Your Please

Praveen Choudhary

Hi. taking two have call. Thanks much I my for questions. so

that the we cities? one you to about facing strategy, that is going other understand would pipeline, which facing what can in just upscale strategy. future? talk I lower-tier be for will wanted very in can relates seems like well big any It to during cities. of operating the you to you a challenges going is costs have in very portion do The the these second if how managed. kind previously I upscale Thank used to opening it size Should and the of hotels what good forward? incur? you're that understand reason hotel is what to about before take about lease lower-tier and challenges question based on time, understand first it's you. to franchised have you're versus have similar asking you of long expenses. pre-opening this and The but one And remember wanted I are expenses a worry

Hui Jin

Okay.

the demand. say we challenges, lower-tier are that of progressing local meeting for facing to and But customers cities, still for actually So penetration the and especially the the local is some matching have the lower-tier cities well. pretty we also sales

For to adjusting area we and this team areas, are for helping improve sales strategies these on further continuously to our penetrate. and especially the us

up In and addition, team staff and cities a localized we our trying also well. as to supporting lower-tier employment penetration building also

restructuring quite organizational doing for lot district those be will a especially We and in areas. of lower-tier cities different

Okay.

the attractive segment upper-middle scale. upscale those market, China segment most as as upper-middle and for as it’s always part well segments, scale, story. for include more which a middle the is the this consolidation we upscale So and middle interested – area including economic, upper-middle And segments, well scale below for the upscale. Huazhu, hotel those scale we think Within four like divided as into the economic, four

developers years a that well the a of As markets-driven as lot It's there segments was governments. kind the not a the China in Many hotel market. is know ago, existing for the hotels you investment. in supplementary as property real of for may upscale

will cooperating rather our the joint also which investments. owned we're But learning exploring leased And to the some leveraging contract, business have are a going for asset-light. and some upscale we we than been we’re and hotels area. use consolidate the researching doing we hotel segment you. in longer of hotel model. rather management by the this Sunac Huazhu, or and For timing current under get stage, the no the in the longer We venture, to choose do developing the incremental will the franchised and returns with that model, In is term, trying those we market capabilities. from still Thank

Operator

Your your next Yulin question. International. of the from question ask line comes Zhong from Haitong Please

Yulin Zhong

side question management. My for helpful. morning, by what Thank and question. regarding you can as be you. I mentioned [indiscernible] DH Thank would the wondering Good the you was to extent increase of profile my taking hotel. Hello. hotel you just digitalization is DH

Chen Hui

okay. program, DH the For

I up all the in global a just platform is one to today, digital fulfilled ready. And now think we for this hotels. we rollout – that already the DH the launched massive

to platform something contribution. efficiency, we before, also the one-digital CRS focused shared even loyalty the the As operation the do not on and only like business just but

[indiscernible] So in that the contribution hope the this improve we around I before – we the we CRS year is X% the the business can can XX%, target. coming hope around now the new that from we think or achieve X%, to

H we're hand, program, And but also the current the it, attention call global Rewards. other the just contribution, global membership launch as the only for loyalty to serious the we pay would new loyalty to to the officially plan, recruitment. such platform the CRS to we according On focus not

of We have beginning the October. officially released at

digital a system program Thank global to by the the quickly contribution So operation the the deplore can in that we years part, one-digital can for program, one and program improvement then not we for it's loyalty. by all hope all. we achieve very only coming business you. the platform And finishing DH. efficiency the by focused in value hotels just CRS the That’s

Fei Ye

This wanted on Qi’s point. Ye. is Hi. just Fei to build Ji I

right question, the the reducing midterm good your to the and also and the important target Right Asia. and very setting tell brand as rollout. it's for digitalization brand improvement now, our think I question still up and the infrastructure phase are early sharpening the is first still of back preparing of margin of But very now focus think the you well. you in the company's it's we operations and too bringing I to loss asked then is a the because still

support also I need think can also to reduce, that target the putting organization. have a we solutions mean, to to operation optimize years the its XX% regarding strongly I company at margin And streamline into XX% more the will in through like we improvement. help level Right both the several believe probably digital now, program. least equipments and and of point headquarter I staff rough the percentage the this contribute several

Yulin Zhong

That’s very helpful. Thank you.

Operator

Your of next comes ask your Simon line the question from Cheung from Goldman question. Sachs. Please

Simon Cheung

Thanks a I assumptions that the hotel growth presentation. sense target. of sort in in the achieving Elan, see grateful there Hi. at get that to the particular to you quarter for update, that X.X. it’s quarter, and for the trend abate I I and in I like, to related guidance confidence you the full-year a sense two something achieve hotel. how your What looking lower of wanted branded your first remember the about get to the question. to the got guidance? questions. of mentioned maintained you cleanup some the X.X to is wanted in That’s perhaps quarter-to-date in third first on

running call to if excluding so not RMBXXX DH, million, at guidance, compared guidance quarter in development the like quarter The about that excluding you're the RMBXXX the are you will expecting choose forward your seemingly jump for million the to round, fourth I think, revenue [doubling]. second DH or one, it second it I

basically all RevPAR So I supposedly. by driven think that's

individually? EBITDA would to be breaking your even So you DH level, you. expect for Thank that at operation your

Hui Jin

products And we control penetrating Hi those in different are know as segment, For including going from our and eliminating and we economic [Elan have was other continuously into may But as used in to many They penetrate to brands that and to sure it we brand], our are as the you using this our operations may softer segment. segment. quality this well Hao, do unqualified also pipeline. Ni market know, Inn share a brand. Elan, further Elan you for enlarge for that

Chen Hui

wanted the I clarify question regarding Simon to So, your DH.

understand that DH Europe? I about guidance quarter is is one the wanted in revenue. for first correct? think also one to your of of development second asking you DH Is first the And that the the

Simon Cheung

Yes, I'm a you're versus step Seemingly, quarter you your fourth the quite bit guidance revenue expectations. in in of correct. a your quarter baking are just guidance. up terms full-year of third using

EBITDA to be So the be would by year? fourth and questions. achieved That’s to breakeven were if that really quarter turn this you able

Chen Hui

I fourth quarter we First the recovery occupancy, positive still cautious variant there about improvement about be of probably are all, of on think, be fourth the but Delta DH generally might way. the of wave we a given

lockdown. subsidy, having revenue working it's the still – related the said guidance, which based not to the to fourth the is think government reach yet. But on – quarters. I company XXXX however, will the yes, point that all breakeven another still So But the hard to on is all for strivings highest the think among for the certainly quarter be I –

Simon Cheung

Understood.

Chen Hui

development regarding a That’s the DH And on of brand. DH.

of consolidation as as well. and brand an in brand and And First we’re MAXX also one. particular upscale Steigenberger also Porsche That's to mentioned DH Intercity, cetera, Europe, we and all, the number of part before, midscale market China, as major the bringing as brand we and in et segments. back Intercity and Design lower also in especially the DH about Europe. And in actually positive especially the the are Germany of economy good segments, the Northern enjoying Zleep in brand tier market a is terms pretty reputation,

Europe. to markets, meantime well management establish we also the combining European in Steigenberger top like also order improving in the franchise these across as So the brands in and brands facilities infrastructure grow the expansion to going two and model upscale model and to also And and continue would a right MAXX the brand both Steigenberger globe. the product find the as sharpen design also truly trying are these model to further by

Simon Cheung

lot. That’s very Thanks you. Understood. a Thank helpful.

Operator

line from question. Mi] of question ask your [Bruce the next from Please comes UBS. Your

Unidentified Analyst

Hi, management. Thanks for taking my question.

two So have I small questions.

The demand different first one penetrating to challenges tier one lower of you is, – cities when previously mentioned, as on franchisees is the meet as into you brand.

hotels that HanTing the is JI take the and much for in same cities much and brand? lower as we how in tier rate brands is so the soft I second Thank And the and my you. how ask, pipeline tier may brand, cities, are core tier cities? look such compared Hotel X from currently, question and how X new if at signing with lower in So is tier

Qi Ji

currently it other to as and and penetration pretty for our current key penetration progressing our brand Ni HanTing such well For Orange are accounts tier of still as XX% lower Starway, brands also JI the Hotel new signings, roughly signings, well. brands cities new some and as from are are Hao the the XX%

please repeat your question? you can second Sorry,

Unidentified Analyst

Sure.

my look [HanTing] question example, if take brands, second for at the So example. is same we as

the franchise between the X lower So cities tier compared tier take just for tier tier X cities? to is the margin how cities understand lower want and and So I and tier the X cities? example, fees comparison rate, between

Qi Ji

Our similar brands are take higher to for lower rate cities very in Hotel or tier and the at JI the HanTing tier level. cities close

lower are rate tier CRS see close very each you. the As take the at to therefore, city, similar other. the Thank or rates our perspectives higher very contribution in that tier are city you charge the to may the percentage

Unidentified Analyst

Thank you. That's all my questions.

Operator

conference hand to like presenters’ closing continue. for back the remarks. any Please would to the I

Qi Ji

taking goodbye. your in upcoming for today, forward everyone Thank you, you again connect Thank to us and look you with with quarter. and time we

Operator

call. conference for concludes you participating. today's This Thank

now disconnect. may You

H World Group Limited (HTHT) 25 Aug 212021 Q2 Earnings call transcript