In addition to Huazhu and Atour, which are listed on the US stock market, other hotel groups have successively announced their financial reports for the first quarter of 2024, with revenue and profit growth rates higher than the same period in 2023.
The total revenue of the six A-share listed hotel groups was 6 billion yuan, a year-on-year increase of 11.26%;
the profit attributable to the parent company was 245 million yuan, a year-on-year increase of 65.6%;
The net profit after deducting non-attributable to the parent company was 86.57 million yuan, a year-on-year increase of 52.65%.
However, these data may not be very referential.
Because in the first quarter of 2023, due to the epidemic just opened, people were infected in a large area and travel was blocked, so the data is not true.
Next, let's take a look at the quarterly reports of each A-share listed hotel group one by one. The first quarterly report revealed that the hotel industry will face greater challenges and uncertainties in 2024.
1
Jin Jiang Hotel
Jin Jiang Hotel's revenue in the first quarter of 2024 and net profit attributable to the parent company deducted from the non-attributable parent company were 3.2 billion, 190 million and 62.31 million respectively. But they are all lower than the 3.3 billion, 295 million and 70.81 million in the same period in 2019.
It is worth noting that the number of hotels in Jin Jiang Hotels in the first quarter of 2019 was 7,631, and now it has reached 12,595.
The number of hotels has increased significantly, but revenue and profits have declined, and the situation is not optimistic.
In the process of rapid expansion, Jin Jiang Hotels still has a lot of problems that need to be solved in the future.
First, the debt ratio has risen instead of falling;
Despite the transition to asset-light operations, the debt ratio has risen from 63% in 2019 to 65% now.
second, the decline in solvency;
Current ratio decreased from 1.12 to 0.9 (reasonable value is 2 or more)
Quick ratio reduced from 1.03 to 0.84 (the reasonable value is 1 or more)
Third, the quality of earnings needs to be improved;
The ROE for the first quarter of 2024 is 1.13%, compared to 2.24% for the same period in 2019. It shows that the profitability of its net assets is declining, and the quality of earnings is declining.
In addition, operational indicators also need to be improved.
RevPAR for the first quarter of 2019 was $143.78 and $145.25 for the first quarter of 2024.
It seems to be an improvement, but this is mainly due to the decrease in budget hotels and the increase in mid-to-high-end hotels.
If you look at the classification, it has not exceeded the first quarter of 2019.
It is conceivable that in the second and fourth quarters of this year, without the influence of last year's low base, the operating conditions of Jin Jiang Hotels may not be optimistic.
2
BTG Hotel
In the first quarter of 2024, BTG Hotel's net profit and net profit attributable to the parent company were 134 million and 121 million, respectively, higher than 98.31 million and 73.95 million in the same period in 2019.
However, the operating income was 1.845 billion, down from 1.943 billion in 2019.
Increasing profits without increasing income does not seem to be too optimistic. Let's see why by business.
In the first quarter of 2024, BTG's hotel business revenue will be 1.639 billion yuan, and the profit will be 41.81 million yuan!
In the first quarter of 2019, the revenue of the hotel business was 1.773 billion and the profit was 59.13 million.
Both revenue and profit of the hotel business were lower than the same period in 2019.
The profit in the first quarter of 2024 increased significantly compared to 2023, mainly because the base of the hotel business in 2023 was too low. The profit of the hotel business in the first quarter of 2023 is only 6.91 million.
As a result, BTG's hotel business has not yet returned to the same period in 2019. However, BTG's hotel fleet has increased by 50% compared to 2019.
If you talk about the contribution of a single store to profits, it will be even lower.
Therefore, BTG has to keep opening stores, otherwise it will be difficult to stabilize profits.
But is constantly opening new stores the fundamental means to solve the problem?
Is this approach sustainable?
How to ensure the profitability of the stock hotel?
Let's take a look at its operating figures.
In the first quarter of 2024, RevPAR is 131 yuan, and ADR is 217 yuan; OCC is 60.1%.
In the first quarter of 2019, RevPAR was 137 yuan, and ADR was 179 yuan; OCC is 76.7%.
The main gap is that the OCC is too low.
However, ADR is not much better, as the average price has risen sharply due to the increase in the proportion of mid-to-high-end hotels.
But if you look at the ADR of mid-to-high-end hotels alone, the picture is not so rosy.
BTG's ADR for mid-to-high-end hotels in the first quarter of 2024 is 282 yuan, and in 2019, it is 281 yuan! There is no significant improvement.
If you carefully dismantle the structure, you will find that the ADR of the directly operated store has increased from 305 yuan to 320 yuan; However, the concession of the hotel was raised from 269 yuan to 272 yuan. The ADR improvement in franchise stores is not significant.
On the other hand, the ADR increase for budget hotels has been even greater due to the nationwide supply clearance. It rose from $160 to $180.
It is worth noting that once the OCC continues to decline, it may be difficult for ADR to stabilize.
3
SSAW Boutique Hotel
Due to the late listing, the company's financial report for the first quarter of 2019 could not be found.
Compared with the situation since 2020, SWON's operating income has increased by 67.3%, and the year-on-year growth in the first quarter of 2024 is mainly due to the revenue brought by the opening of new directly-operated stores.
But in terms of profits, the realization is very flat. See the table below.
The reason for the slow profit growth is that the SSAW business is mainly directly operated stores, and the rapid expansion is accompanied by a large amount of capital investment, which will drag down the performance.
The net profit attributable to the parent company for the whole year of 2023 will be 30.52 million yuan, a decrease of 57.8% compared with 2019.
It is worth mentioning that SSAW Pavilion's RevPAR has been steadily improving, and the main driving force for the improvement comes from ADR. See the table below. (Data source: the company's first quarterly report)
Due to the obvious differentiation of the company's entry into the mid-to-high-end market and its focus on direct sales, the operating indicators have been significantly improved.
This also shows the pain points of domestic hotels:
- Direct sales can ensure quality, but the expansion speed is too slow, the capital expenditure is too large, and the gross profit margin fluctuates greatly;
- The expansion rate of asset-light operations is fast, the capital expenditure is small, and the gross profit margin fluctuates little, but the quality is uneven.
4
Jinling Hotel and Huatian Hotel
Jinling Hotel's revenue in the first quarter of 2024 increased by 15.54% year-on-year, but the net profit attributable to the parent decreased by 26.24% year-on-year.
The company's quarterly report did not break down each business in more detail, so it is not clear what the specific reason is.
The company's explanation in the quarterly report is:
1. During the reporting period, Nanjing Jinling Hotel and New Jinling Company were affected by the cancellation of the real estate tax and land use tax reduction and exemption policies;
2. During the reporting period, the newly opened Nanjing Nancheng Jinling Wenjing Hotel (Nanjing Laomendong Project) is still in the market cultivation period.
The 2023 annual report shows that room revenue accounts for only 13.34%, and hotel management accounts for 5.71%. Therefore, the analysis is of little significance.
As for Huatian Hotel, since 2014, it has begun to enter a cycle of "losing money for a year and making a profit", and its investment failure in real estate has also dragged down the development of the hotel business.
In the context of the unsatisfactory main business, Huatian Hotel has tried to diversify its operations, covering mobile games, health, financial management and other industries, but in the end it has failed to "break the circle".
Therefore, there is no need for analysis.
5
The hotel industry is still burdened with a heavy load
Although Huazhu and Atour have not yet released a quarterly report, judging from the quarterly report of Jin Jiang Hotel and BTG Hotel.
The situation in the last three quarters of 2024 is not promising.
First of all, the base of revenue and profit in the first quarter of last year was low, and there was no base effect in the last three quarters;
Second, as the OCC declined, the ADR also began to decline, and the pressure in the last three quarters was relatively high;
Third, although all groups are actively deploying mid-to-high-end hotels, the RevPAR of mid-to-high-end hotels has not improved significantly, but the overall data of hotel groups is acceptable due to the increase in the proportion of mid-to-high-end hotels.
Fourth, compared with 2019, although the number of hotels in each group has increased significantly, the revenue, profit, RevPAR, OCC and ADR are not as good as in 2019;
Fifth, the group that has transformed into an asset-light operation strongly relies on newly opened stores to maintain revenue and profits, and the operation quality of existing hotels needs to be improved.
Sixth, the hotel supply will rebound sharply in 2023, and it will still be in the race in 2024, and as the residents' travel demand subsides, the oversupply will be more serious in the next three quarters.
In short, judging from the quarterly report of the listed hotel group, the chill of the industry is a bit shivering.
"The above data is from Straight Flush iFind"