GreenTree Hospitality Group Ltd. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

Core Viewpoint - GreenTree Hospitality Group Ltd. reported its unaudited financial results for the fourth quarter and fiscal year of 2024, highlighting significant challenges in both hotel and restaurant segments, with total revenues decreasing by 18.2% year-over-year to RMB304.5 million (US$41.7 million) and a net loss of RMB72.8 million (US$10.0 million) in Q4 2024. Financial Performance - Total revenues for the year were RMB1,343.4 million (US$184.1 million), a 17.4% year-over-year decrease [12][10]. - Adjusted net income for Q4 2024 was RMB77.3 million (US$10.6 million), up from RMB60.9 million in Q4 2023, indicating a 26.8% increase [29][30]. - Cash from operations increased year-over-year to RMB74.2 million (US$10.2 million) [37]. Hotel Segment - The hotel business generated revenues of RMB240.2 million (US$32.9 million) in Q4 2024, a 17.1% year-over-year decrease, primarily due to a 9.8% decrease in RevPAR and the closure of 12 leased and operated hotels [11][12]. - As of December 31, 2024, the company operated 4,425 hotels with 321,282 rooms, having opened 143 hotels during the year [8][10]. - The average daily room rate was RMB169, down 4.6% from RMB177 in Q4 2023, with an occupancy rate of 68.6%, down from 72.4% [8]. Restaurant Segment - Restaurant revenues were RMB65.1 million (US$8.9 million) in Q4 2024, a 25.8% year-over-year decrease, attributed to the closure of leased and operated stores and a 16.8% decrease in average daily sales per store [12][14]. - The company had 182 restaurants in operation as of December 31, 2024, with franchised and managed stores accounting for almost 90% of all stores, up from 78% a year ago [5][48]. Operating Costs and Expenses - Total operating costs and expenses for Q4 2024 were RMB412.4 million (US$56.5 million), reflecting a significant increase in impairment losses related to the restaurant business [19][20]. - Operating costs for the hotel business decreased by 9.5% year-over-year to RMB139.9 million (US$19.2 million) [20]. - Selling and marketing expenses increased by 58.9% year-over-year to RMB17.6 million (US$2.4 million) [21]. Strategic Initiatives - The company plans to open 480 new hotels in 2025 while focusing on upgrading existing properties to enhance service quality [4]. - The strategic transformation of the restaurant business is ongoing, with a focus on increasing the number of franchised and managed stores [5]. Guidance - The company expects total revenues from its organic hotel business to remain flat compared to 2024 levels, reflecting a cautious outlook amid ongoing industry fluctuations [39].