Core Viewpoint - The incident at the Atour Hotel in Hangzhou, where pillowcases were found with labels from a hospital, highlights significant operational and management issues within the hotel chain, particularly concerning hygiene standards and supplier management [5][20][21]. Company Response - The Atour Hotel issued a public apology, confirming that the issue stemmed from a serious error by their self-sourced laundry supplier, which has since been terminated. A 100% inspection of all room linens was conducted, with no further issues found [5][20]. - The hotel provided documentation regarding the laundry supplier's qualifications and linen testing, and expressed regret for the negative experience caused to guests [20]. Industry Context - Atour Group, established in 2013 and listed on NASDAQ in November 2022, has faced previous hygiene-related controversies, indicating a pattern of operational challenges [6][21]. - The hotel chain operates primarily through a franchise model, with 98.39% of its 1,619 hotels being franchises as of December 31, 2024, which may contribute to management difficulties [22][23]. Operational Metrics - In 2024, Atour's key operational metrics showed a decline: occupancy rate decreased from 77.8% to 77.4%, average daily rate (ADR) fell from RMB 463.6 to RMB 436.8, and revenue per available room (RevPAR) dropped from RMB 376.8 to RMB 351.3 [25][26]. - The franchise model, while allowing for rapid expansion, poses risks related to quality control and management oversight, particularly in maintaining hygiene standards across numerous locations [24][25]. Regulatory and Industry Standards - The Zhejiang Laundry Industry Association emphasized the importance of separating medical and hotel linens during washing to prevent cross-contamination, highlighting the regulatory framework that governs such practices [21]. - The association plans to introduce group standards to regulate the washing of public and medical textiles, aiming to enhance compliance and hygiene across the industry [21].