Huazhu Group Limited (NASDAQ:HTHT) Q4 2019 Earnings Conference Call - Final Transcript

Mar 26, 2020 • 09:00 pm ET

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Huazhu Group Limited (NASDAQ:HTHT) Q4 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Justin Kwok from Goldman Sachs. Your line is now open, Justin.

Analyst
Justin Kwok

Good morning, thanks for taking my question and hope everyone is staying safe and healthy. I got three questions, two related to the sector and I have the last one related to Europe. For the first two questions on the sector, can I get a sense on how management is seeing the potential behavioral change for the travel industry regarding both the business travel and leisure travel after the entire COVID-19 is being settled? How would you expect the way business leisure travelers will behave differently going forward.

The second question on the sector is about the competition landscape. With 2019 actually to focus on the investor was on some of the new entrants into the China market and/or some of the mid-to-smaller chain players being turning a lot more aggressive in going into expansion. How do you see these landscape in 2020 and '21?

The last one is actually on Deutsche Hospitality, how would management guide in terms of the EBITDA contribution for this segment -- for this newly acquired company in 2020, given the operating leverage how should investors think about the contribution? Thank you.

Executive
Yu Ida

Sorry, Justin, let me translate the questions to our management here. [Foreign Speech] Okay. So sorry, Mr. Liu has several, sorry, she -- let me just translate the first part of her answer. So before the COVID-19, I think the pattern of the business traveler and leisure traveler remained the same. During the pandemic, yes, we have to say the traffic of business travelers did slow down because the business activity has been stopped. However, the demand of local customers did rise. And as Huazhu, we have the full scale sales capability no matter it's online and offline, we combine them together just like what Xin Liu mentioned before. We equipped our local sales with IT equipment, we also promote all staff sales among the organization.

[Foreign Speech] So, we will further develop our corporate sales activities towards business travelers need. And we also anticipate the rise of leisure demand in upcoming April. And in short, we will utilize all kinds of tools to grasp all the sales opportunities.

Executive
Hui Jin

So first of all, as we mentioned before in the presentation, the scale effect and also the chain capability will really make the leading companies like ours stand out during the pandemic.

[Foreign Speech] Huazhu is advantaged in terms of our high efficiency and cost control, which will further stand out in the future competition compared to the high-cost operator.

[Foreign Speech] We are very positive about our growth potential in the next three years. Our target is open one -- sorry, 10,000 hotels in 1,000 cities. I'm very pleased to report that we have already signed up 300 over hotels, no matter it's a hard brand and soft brand in our network in