Summary of Hotel Industry Conference Call Industry Overview - The hotel industry experienced a strong performance during the National Day holiday in 2025, with chain hotel Average Daily Rate (ADR) increasing due to high consumer trust in chain brands, stable pricing strategies, and a preference for family travel [2][3][6] - Mid-range hotels like Atour and Hilton Garden Inn performed exceptionally well, while the economy segment saw HanTing leading [2][7] - The peak booking period was from October 1 to 4, 2025, extending one day compared to the previous year [2][8] - The industry is expected to see a positive RevPAR year-on-year only by the second half of 2026 due to multiple factors including a slowdown in new contracts and strong demand [2][9] Key Performance Metrics - During the National Day period, Huazhu Group reported an ADR of 393 RMB, an occupancy rate (OCC) of 88.2%, and a RevPAR of 346.6 RMB, reflecting a year-on-year increase of 4%, 1.1 percentage points, and 5.1% respectively [3] - Jinjiang Group's ADR was 366 RMB, with an OCC of 85.5% and a RevPAR of 312 RMB, showing increases of 4.5%, 4 percentage points, and 8.6% respectively [3] - The overall performance was strong despite a decline compared to the May Day holiday due to the longer duration of the National Day holiday [3] Regional Performance - Key cities such as Beijing, Shanghai, Chengdu, Nanjing, Hangzhou, Suzhou, Chongqing, and Tianjin showed strong hotel performance, while Shenzhen and Guangzhou's RevPAR was weaker due to typhoon impacts [5] - The North China region, including Beijing-Tianjin-Hebei and Shanxi, saw RevPAR increases of 100% to 120% [5] - Southwest and Northwest regions benefited from rich tourism resources and relatively low hotel supply, enhancing their pricing power [5] Future Outlook - The hotel supply side is expected to decrease in the second half of 2026, with many poorly performing hotels facing closure or rebranding [10][11] - The industry is experiencing a cleansing phenomenon, particularly affecting single hotels, with about 80% of the affected being independent hotels [13] - Major hotel groups like Huazhu and Jinjiang continue to expand despite overall supply slowing down, focusing on increasing market share [16] Investment and Financial Metrics - Full Season hotels have the best investment return rate, with a payback period of approximately 4 to 4.5 years, translating to a return rate of 23-24% [15] - HanTing leads in the economy segment with a payback period of about 5 years in high-tier cities and slightly shorter in lower-tier cities [15] - The investment landscape is shifting, with a growing proportion of younger investors and those with government connections entering the market [24][25] Booking Trends - The proportion of bookings through Central Reservation Systems (CRS) is increasing, with Huazhu at approximately 65% and Atour at around 60% [4][19] - The trend is moving towards enhancing member contribution rates, aiming for a 70% self-owned channel and 30% OTA channel [4][19] Key Challenges - The hotel industry faces challenges such as increased competition, saturation in key markets, and the need for strategic rebranding to attract customers [17][18] - The overall demand for business travelers has increased in absolute terms but decreased as a percentage of total guests due to the growing number of hotels [12] Conclusion - The hotel industry is poised for a complex recovery, with strong performance indicators during peak seasons but facing challenges in supply and market saturation. The focus on strategic expansion and rebranding will be crucial for navigating the evolving landscape.