Core Viewpoint - Huazhu Group reported a solid performance in Q2 2025, with significant growth in hotel revenue and adjusted net profit, despite challenges in the overall hotel industry [1][2]. Financial Performance - In Q2 2025, Huazhu Group's hotel revenue reached 26.9 billion RMB, a year-on-year increase of 15% [1]. - The group's total revenue was 6.4 billion RMB, up 4.5% year-on-year [1]. - Adjusted net profit was 1.35 billion RMB, reflecting a 7.6% increase [1]. - Adjusted EBITDA was 2.3 billion RMB, showing an 11.3% growth [1]. Hotel Operations - As of the end of Q2, Huazhu Group operated 12,137 hotels, an 18% increase year-on-year [1]. - The total number of rooms reached 1,184,915, up 18.3% from the previous year [1]. - The company opened 597 new hotels during the quarter, with 2,947 hotels in the pipeline, covering 1,522 cities [1]. Future Guidance - For Q3 2025, Huazhu Group expects revenue growth of 2% to 6% compared to Q3 2024, or 4% to 8% excluding Huazhu International [1]. - Management and franchise income is projected to grow by 20% to 24% year-on-year [1]. Market Challenges - Despite the positive financial results, the hotel industry faces pressure on average daily rate (ADR), occupancy rate (OCC), and revenue per available room (RevPAR) [2]. - Q2 2025 figures for Huazhu China showed ADR at 290 RMB, OCC at 81%, and RevPAR at 235 RMB, all lower than the same period in 2024 [2]. - The CEO noted that rapid supply growth in the hotel market and macroeconomic factors have created challenges for the industry [2]. Strategic Shift - Huazhu Group is implementing a light-asset strategy, reducing direct operations while focusing on management and franchise models [3][4]. - Revenue from leased and owned hotels decreased by 8.7% to 6.2 billion RMB, while management and franchise income grew by 22% to 5.4 billion RMB, now accounting for 45.4% of total revenue [3][4]. - The shift to a light-asset model has improved gross profit margins, with operating profit margin rising from 22.5% to 24.3% year-on-year [4].
华住集团二季度营收、净利双增，预计三季度RevPAR降幅收窄