Investment Rating - The report maintains an "Overweight" rating for the hotel industry, indicating an expectation for the industry to outperform the benchmark index [7]. Core Insights - The hotel industry is entering a recovery phase with improving supply-demand dynamics, particularly from 2026 onwards, as supply growth slows and demand from leisure travel remains strong [1][4]. - The performance of leading hotel groups during the Spring Festival indicates a robust recovery, with significant increases in occupancy rates and guest numbers compared to previous years [2]. - International hotel chains in the Greater China region are showing signs of marginal recovery, with improved revenue per available room (RevPAR) figures, supporting the overall positive outlook for the industry [3]. Summary by Sections Supply and Demand Dynamics - The hotel industry is expected to experience a supply-side slowdown starting in Q4 2025, with the growth rate of hotel room supply decreasing to mid-high single digits. This is due to cautious investor sentiment and extended payback periods for individual hotels [4]. - Demand is being driven by a resurgence in leisure travel and a gradual recovery in business travel, with expectations for continued improvement into 2026 [4]. Performance Metrics - During the Spring Festival period, the hotel industry reported a 23% year-on-year increase in revenue per available room (RevPAR), with occupancy rates rising by 8.1 percentage points and average daily rates (ADR) increasing by 6.8% [2]. - Major hotel groups, such as Jin Jiang and Huazhu, reported significant increases in guest numbers and occupancy rates, with Jin Jiang seeing a 43% increase in guest numbers compared to the previous year [2]. Competitive Landscape - The industry is shifting from scale competition to value competition, with leading hotel groups focusing on product iteration and differentiation to meet changing consumer demands. This includes renovations and upgrades to existing properties [5]. - The report highlights that leading hotel groups are leveraging supply chain efficiencies to control costs, which is expected to enhance profit margins as RevPAR recovers [5].