Core Viewpoint - The hotel industry is experiencing ongoing price wars, prompting Atour to take proactive measures to reduce costs for its franchisees and enhance their operational confidence [1][4]. Cost Optimization Initiatives - Atour is implementing a series of cost optimization measures through its supply chain, including price reductions on hotel supplies and engineering materials to lower franchisee operating costs [4][5]. - Specific price reductions include a 51.8% decrease in "tea paper cups" and a 10.2% reduction in "lazy cloths," with engineering materials seeing price cuts of up to 11.67% [5][6]. - The company has also committed to eight supply chain procurement promises, including price guarantees and hassle-free after-sales service [6][8]. Financial Performance - In Q1 2025, Atour reported revenue of 1.906 billion yuan, a year-on-year increase of 29.8%, while net profit decreased by 5.5% to 244 million yuan [12]. - The number of hotels operated by Atour grew to 1,727, with a total of 194,559 rooms, marking increases of 32.6% and 31.3% year-on-year, respectively [12][10]. Franchise Model and Cost Structure - The franchise model has been crucial for Atour's rapid expansion, with franchise management hotel revenue reaching 1.032 billion yuan in Q1 2025, a 23.5% increase [12]. - Over 90% of Atour's locations are franchise hotels, and the company charges franchise fees ranging from 5,000 to 8,000 yuan per room, along with ongoing management fees [12][13]. Market Context and Challenges - The hotel industry is facing a decline in average daily rates (ADR) and revenue per available room (RevPAR), with Atour's ADR dropping to 418 yuan in Q1 2025 from 430 yuan in the same period last year [17][18]. - The overall operating costs for Atour increased significantly, with total costs and expenses rising to 1.565 billion yuan in Q1 2025, a 36% increase from the previous year [20].