Please turn to Page 3. Our RevPAR recovery was on track and in uptrend in January and February. However, it was seriously interrupted since March. The recovery declined to only 67% of 2019 level and further lowered to the bottom of 53% in April. May saw slightly better RevPAR recovery than April with the months to date RevPAR recovered to roughly 58% of 2019 level. The RevPAR number that I just mentioned only reflects our hotels in normal operations. If we included those hotels and the requisitions, our April and May RevPAR recovery would be roughly at 65% for both months, which indicates roughly 7 to 12 percentage points better than hotels in normal operations. Since May we are seeing the normal hotel is gradually improving in terms of the performance and the impacts of the requisition is gradually decreasing. Under the situation of the strict COVID prohibition control, we are implementing several mitigation measures to overcome the difficulties. Firstly, we have started our reinforcement of cost control for domestic operations. Please turn to Page 4. The cost control will be mainly from three specific aspects. First, streamlining headcounts and expenses. We are further optimizing our headquarter with a plan of headcounts reduction by roughly 15% to 20%. Second, we are concentrating the company's resources to our key strategies and reducing any unnecessary expenditures. Third, negotiating lease waivers or reductions due to the pandemic. We have formed a special team internally to conduct the lease waiver or reduction negotiation for both our leased and own hotels and manachised and franchised the hotel to reduce operational cost. As one of the leading companies in the industry, we are also undertaking the corporate social responsibilities during the pandemic by providing many requisition hotels. Please turn to Page 5. Since early March our number of hotels and the requisition increased massively from just over 200 to the highest of more than 1,800 hotels. Since the pandemic is gradually under control recently, our number of hotels and the requisitions started to decline from the peak in April. In fact, from another perspective, it is actually a win-win choice for us to provide hotels for requisition purpose during the pandemic period. Given the normal business and the leisure traveling demand declined sharply due to the traffic restriction during the pandemic period, the requisition actually helps hotels to achieve relatively better occupancy rate and support the hotel’s operational performance. Please turn to Page 6. Despite the pandemic impacts, we remain striving hard to grab any sales opportunities during the period to improve our performance. Firstly, we actively seek COVID related accommodation needs such as requisition hotels as I just mentioned before. We actively seek any accommodation needs of quarantine medical teams, delivery riders, governmental officers, and corporates for both leased and owned and manachised and franchised hotels. Taking Shanghai as an example, whereas the most affected cities by the pandemic this time, our hotels served over 9,500 medical staffs and over 5,000 delivery riders during the lockdown period. In addition, we also initiated several creative product packages to meet the special needs during the pandemic, such as online class hotel rooms, work from hotels and so on. Secondly, we adjusted our sales strategy from previously brand based to a new regional based to unify sales and marketing strategy. By doing so, we can be more precisely targeting strong local demands for specific regions, especially for those areas who have less impacts from the pandemic. Lastly, we extended expiration dates of our members' privileges and points and mentioned their member status to further improve our members' loyalty. At the same times, we are also actively cooperating with external [ph] traffic platform and participating in various marketing campaigns organized by different OTA platforms to capture the recovery opportunities post the COVID through pre-sales activities. The pandemic has the lockdown have resulted in a physical shutdown of our headquarter in Shanghai. However, we are still able to maintain high working and operational efficiency through remote work. Please turn to Page 7. H-Tone an internal information platform provides a solid foundation and a connector to our hotel staffs, headquarter employees, franchisees and suppliers for efficient remote work. For example, for our headquarter employees in Shanghai, there are over 10,000 online meetings were hosted. There are over 250,000 daily messages were sent and received and over 7,000 online documents were used per day on H-Tone platform. The pandemic and the lockdown demonstrated our digitalization capability. In the long run we think the strong technology capability and cloud-based information platform will be critical foundation for our future broader regional and international business collaboration and synergy. Please turn to Page 8. From cost control to requisition hotels, to marketing and sales efforts during the pandemic, and then to highly efficient remote work, these are all measures that we have taken in the current pandemic period. From a longer-term perspective, despite the market conditions remains are uncertain, we would continuously center on our customers, franchisees and employees to build capabilities, to ride through the ups and downs of economic cycles. Firstly is by caring our customers. Please turn to Page 9. I would like to share two letters of thanks from our customers recently. First letter is from our customers from Tangyin County. He is stating Huazhu’s hotels due to the quarantine needs. He feels that our hotel provides the warmth of home and would become our loyal customers in the future. The second letter is from our customers in Shanghai, who was drafted in Shanghai due to city lockdown. He has chosen Huazhu’s hotel to stay not only because that he is a loyal member, but also his high trust in Huazhu. In conclusion, we will continuously upgrade and improve our products and service qualities to meet our customers’ needs for better experiences and satisfaction. Secondly, by caring franchisees. Please turn to Page 10. Franchisees are our critical and reliable partners. Given the recent difficulties, we have provided a series of supportive measures and policies to help our franchisees to tide over the tough period. Last year, Huazhu was the only company which constantly providing fee waivers or reductions to franchisees. This year we again provided new fee waiver or deferral payment policies for hotels in medium and high risk areas and also for the new signed hotels. Moreover, we also assist our franchisees to obtain relevant information and take advantage on any government's preferential and assistance policies released during the pandemic. We help them to apply value-added tax refund or reduction, provided legal support to our franchisees on rental waiver negotiation, and helped the franchisees to apply financial support from external financial institutions. In addition, despite the strict traffic restrictions due to the pandemic outbreak, our supply chain teams still strived very hard to provide sufficient food and supplies to our manachised and franchised hotels to ensure their hotels in normal operations, as well as provided goods and supplies to hotels and the constructions in pipeline. Lastly, by caring employees. Please turn to Page 11. We always value our frontline staff as valuable assets for our company. Similar to what we had done in 2020, we returned our full frontline staffs during the pandemic period to keep our hotels in operation. At the same time, we constantly focus on our employees’ future career development. Even during the pandemic period, we had organized over 1000 online training programs for our employees to further helping them improving their skillsets. In addition, we also establish a special COVID fund to support or reward employees who are infected by COVID, who are working at requisition hotels and who have any outstanding contributions during the period. Please turn to Page 12. Despite the uncertainties, our long-term sustainable quality growth strategy remains unchanged. We still insist on further lower tier cities penetrations. Please tend to Page 13. By the end of the first quarter, lower tier cities contribution was still improving. It contributed 37% and 55% of hotels in operations and pipeline respectively. For the new signings in the first quarter, nearly half of them were attributed from lower tier cities. However, we have to be very honest to update you the most recent situation. Although our new signings still grow in the first quarter, the pandemic outbreak and lockdown seriously affected our new signings in April. The signing numbers in April declined significantly compared to last year.
