Core Viewpoint - Atour, a hotel brand that has shifted towards selling pillows, is facing significant service and hygiene complaints from customers, indicating a decline in its reputation and service quality [2][4][6]. Group 1: Service Issues - Customers reported serious service failures during their stays, including being trapped in malfunctioning elevators without assistance and experiencing poor room conditions [2][6]. - Complaints about hygiene were prevalent, with guests finding dirty mirrors, water stains, and used toiletries in their rooms [6][8]. Group 2: Business Model Shift - Atour's retail business, primarily focused on selling pillows, has seen rapid growth, with a projected increase of 127.7% year-on-year in 2024 [4][13]. - The company is transitioning to a "light asset operation" strategy, increasing franchise hotels while reducing self-operated properties, which has led to a significant expansion in its hotel network [9][12]. Group 3: Financial Performance - Despite the decline in customer experience, Atour's revenue from franchise hotels increased by 53.3% to 4.15 billion yuan, while revenue from self-operated hotels decreased by 16.4% to 700 million yuan [12]. - The average daily room rate for Atour hotels fell by 5.8% to 437 yuan in 2024, reflecting challenges in maintaining pricing power in a competitive market [12][13]. Group 4: Retail Growth and Marketing - Atour's retail segment, particularly its pillow sales, has become a significant revenue driver, contributing 30% to total income in 2024, with expectations of at least 35% growth in 2025 [13][15]. - The company has heavily invested in marketing, with expenses reaching 970 million yuan, which has impacted profit margins [15].