China’s Largest Hotel Group, Huazhu Plans Foray Into Thailand With Local Bank

Huazhu Hotels Group , one of China’s largest Hotel Group with more than 4,000 properties is planning to make a foray into Thailand with a local Thai bank being its partner. The name of the banking group was not disclosed but they are planning to set up hotels in Chonburi, Chiangrai, Phuket and also Bangkok with 4 properties targeted for 2022.


 
Despite the Chinese economy actually softening, executives at Huazhu Hotels Group said they believe this actually opens up growth opportunities for consolidation for their company and also a good phase to expand.

CEO Jenny Zhang said the company is continuing the rapid expansion of its hotel network while it also focuses on its tech applications to enhance guest experience and operational efficiency. The company is also moving forward with its strategic deployment in the upscale segment.
 
Through the second quarter of 2019 , the company opened the equivalent of net three hotels every day, amounting to 269 hotels, she said. That is triple the amount of hotel openings compared to Q2 2018, and the same is true overall for the first half of the year.
 
The company’s pipeline comprises 1,553 hotels, which is equivalent to 33% of its hotels currently in operation, up from 21% in the first quarter, Zhang said. The majority of the company’s pipeline is its franchised hotels, accounting for 96.5% of its projects.
 
“Our opened pipeline for mid- and upscale rooms accounted for approximately 80% of the total number of rooms in pipeline same as a year ago,” she said. “Our enriched mid- and upscale hotel brand portfolio with profitable hotel operating models continue to attract potential franchisees into Huazhu’s hotel network.”

Huazhu launched its flagship brand, HanTing, in 2005, and it serves a wide range of business and leisure customers in China, Zhang said. The company unveiled its first HanTing 3.0 hotel in Shanghai last month. The brand upgrade is “intelligent and affordable with premium quality,” she said. HanTing 3.0 offers guests fast, automatic check-in using displays at the front desk, robot delivery staff and an AI system called Hello Huazhu that features a voice-activated, two-way communication system that also allows guests to control in-room lights, TV, air conditioning, window shades and other features.

By the end of the second quarter, Huazhu had a total of 4,665 hotels representing 463,296 rooms in operation, a 20% year-over-year increase, according to the company’s earnings report. It opened 311 hotels, including eight leased hotels with the remainder being franchised.  
 
For the quarter, Huazhu reported net revenue of 2.9 billion yuan ($409.4 million), a 13% year-over-year increase. Adjusted earnings before interest, taxes, depreciation and amortization amounted to slightly more than 1 billion yuan ($141.1 million), an increase from 965 million yuan ($136.2 million) last Q2.
 
For Thailand the company plans to introduce its HangTing brand and  will initially only target 4 properties with a combined rooms of about 1,650. The company refused to disclose more details about the projects or about its Thai partners but said that a major press conference is planned in Bangkok in October 2019.