(Yicai Global) July 1 -- China's Huazhu Group, which runs Grand Mercure and Hanting hotels, expects its revenue to fall by a third in the second quarter from a year ago as the Covid-19 pandemic curbed people's travel aspirations.

Huazhu made a net loss of CNY2.1 billion (USD301 million) in the first quarter as many of its hotels were shut due to the epidemic, according to its earnings report released today. It had reported CNY106 million (USD15 million) in net profit a year ago. The loss was slightly bigger than its first-quarter revenue of CNY2 billion, falling 16 percent from a year earlier.

However, the sector was recovering as the number of Huazhu's closed hotels fell to less than 370 by the end of March from the mid-February peak of 2,310. In the midst of the epidemic, one way the company was dealing with the sour lemons that the virus threw its way was offering quarantine room deals.

Huazhu is doing better than many other Chinese hospitality groups as its weekly occupancy rate was 74 percent as of June 11 when a new outbreak emerged in Beijing, whereas the domestic sector's average was 47 percent, the firm said, citing data from analytics firm STR.

Moreover, overseas assets offered a buffer against a bigger slump. The Shanghai-based firm bought Deutsche Hospitality in January, which turned out to be a fortunate timing as the German owner of Steigenberger Hotels & Resorts and Jaz in the City design hotels made up about a third of the Chinese parent's revenue over the quarter.

Founded in 2005, Huazhu managed more than 5,800 hotels with over 552,000 rooms by the end of March.

Huazhu's stock price [NASDAQ: HTHT] fell 1.1 percent to USD35.05 yesterday in New York.

Editor: Emmi Laine