Business Performance - H World Group's Legacy-Huazhu RevPAR decreased by 3.9% year-over-year in Q1 2025, with OCC declining by 1.0 percentage point and ADR decreasing by 2.6%[9] - Legacy-DH RevPAR increased by 12.7% year-over-year in Q1 2025, driven by a 5.3 percentage point increase in OCC and a rise in ADR[30, 31] - Total revenue increased by 2.2% year-over-year to RMB 5395 million in Q1 2025[47] - Adjusted EBITDA reached RMB 1496 million in Q1 2025, a 5.3% increase year-over-year[55] Network Expansion and Product Upgrade - The number of hotels in operation for Legacy-Huazhu increased to 11,564 as of March 31, 2025[14] - The number of hotels in pipeline for Legacy-Huazhu was 2,865 as of March 31, 2025[11, 14] - The company is stepping up the development of upper-midscale segment, with the number of upper-midscale hotels in operation increasing by 74% year-over-year[16, 17] - Hanting 3.5 and above accounted for 71% of Hanting hotels in operation, while JI 4.0 and above accounted for 78% of JI Hotels in operation in Q1 2025[19] - Orange 2.0 and above accounted for 66% of Orange Hotels in operation in Q1 2025[22] Strategic Focus - H World is enhancing its presence in lower-tier cities, with 54% of hotels in pipeline located in Tier-3, 4 and below cities as of March 31, 2025[24] - Direct booking through H World CRS increased by 5.4 percentage points year-over-year to 65.1% in Q1 2025[28] - The company is transforming to an asset-light model, with revenue from manachised & franchised hotels increasing for both Legacy-Huazhu (21.1% YoY) and Legacy-DH (34.8% YoY)[47, 49]