On May 1, Huazhu group announced that since May 1, it will launch a number of relief and assistance, including franchise management fee, general manager fee, alliance wide service package fee and so on, especially for qualified stores nationwide.
Specifically, Huazhu group’s policies for franchisees include: from May 1, all franchisees in cities with medium and high-risk covid-19 epidemic in China will halve the franchise management fee. As long as any day of the month is defined as a medium and high-risk area due to covid-19 epidemic, it meets the conditions for halving the franchise management fee, which can be reduced for up to 2 months; From May 1, franchise stores requisitioned due to covid-19 epidemic throughout the country, as long as they are requisitioned due to covid-19 epidemic on any day of the month, they meet the conditions for halving the franchise management fee and can be reduced or exempted for up to 2 months; Franchise stores requisitioned and managed by government agencies or medical and health institutions nationwide shall be exempted from franchise management fees.
Previously, Huazhu group had issued a notice that in the regional cities with medium and high risks nationwide from March to April 2022, the monthly management fee of 5% of stores can be deferred for 6 months; For stores requisitioned by the government during the epidemic period, 5% of the monthly management fee will be fully reduced; The policy of halving the CRS (central reservation system) fees of franchise stores remains unchanged.
It is worth noting that the occupancy rate of hotels in Chinese Mainland under Huazhu group has declined due to the epidemic. According to the data disclosed by Huazhu group on April 28, the average occupancy rate of hotels in operation in Chinese Mainland in the first quarter of 2022 was 59.2%, a year-on-year decrease of 7 percentage points, a decrease of 21.4 percentage points compared with the same period in 2019; RevPAR (average rentable room revenue) decreased by 4.1% year-on-year and 25.7% compared with the same period in 2019.
Huazhu group pointed out that the group’s RevPAR was on track in the first two months of 2022. However, since March 2022, the Omicron variant virus has erupted on a large scale in more than 30 provinces in China, significantly disrupting the recovery. However, the outbreak also increased the demand for hotels to meet the isolation needs of infected persons or close contacts, as well as the accommodation needs of medical teams and delivery riders.
At the same time, DH (Deutsche Hotel Group), a European hotel brand of Huazhu group, recovered strongly in the first quarter of 2022. According to the data, the average occupancy rate of DH hotels in the first quarter of 2022 was 38%, with a year-on-year increase of 19.2 percentage points; RevPAR increased by 158% year-on-year.
