Ronald Leung • Bank of America

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Jason Chen, Head of IR, translated the response, stating that Q3 RevPAR is expected to see a slight year-over-year decline, though the gap will narrow sequentially. The full-year RevPAR forecast is now slightly below previous guidance due to macro uncertainties and increased hotel supply. However, the company aims to meet its original full-year revenue guidance through operational improvements. Management acknowledged that new, higher-quality hotels are pressuring older ones, viewing it as a necessary short-term pain for long-term market share gain with superior products. They are addressing this through upgrades and more strategic positioning of new hotels.

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CEO Jin Hui, via an interpreter, projected a low single-digit year-over-year decline in Q1 RevPAR due to seasonality but expressed confidence in a stable or slightly increased RevPAR for the full year. CSO Jihong He addressed the DH business, stating that 2024 restructuring efforts will yield full-year benefits in 2025. The strategy is to stabilize the business, stop losses, and pursue asset-light growth, with any future restructuring costs expected to be smaller in magnitude than in 2024.

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CEO Hui Jin addressed the questions, noting that while the industry saw a roughly 10% year-over-year RevPAR decline in July and August due to a high 2023 base and weak macro conditions, H World expects a more moderate mid-single-digit decline for Q3, continuing to outperform the market. Regarding franchisees, Mr. Jin stated that investment appetite remains healthy, evidenced by a continuously growing pipeline. He attributed this to the company's strategic focus on lower-tier city penetration and upper-midscale segment growth, reinforced by a commitment to 'high-quality growth' and 'service excellence' which maintains franchisee confidence.

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CEO Haijun Wang responded that the pace of hotel closures in 2025 will be similar to 2024, as the company continues to proactively terminate contracts with underperforming properties to ensure quality. Regarding shareholder returns, he reiterated the existing three-year annual dividend plan to distribute at least 50% of the previous year's net income, confirming that the 2025 dividend will be determined based on a comprehensive review of operations, cash, and future needs.

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CEO Haijun Wang attributed the Q3 RevPAR pressure to a high comparison base, typhoons, and holiday timing, but noted the decline has narrowed. He forecasted a full-year RevPAR decline of a mid- to high single-digit percentage. However, he reaffirmed the full-year revenue growth guidance of 48% to 52%, supported by rapid hotel network expansion and strong retail growth.

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Founder, Chairman and CEO Haijun Wang projected 70 to 80 new openings for Atour Light 3.0 in 2024, aiming for approximately 100 in operation by year-end. He noted that the proportion of consumers under 30 has risen to 30%, attributed to initiatives like co-branded collaborations with cultural IPs that cater to the needs of young travelers and deepen brand awareness.

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