Summary of H World (HTHT) Q1 2026 Earnings Call

1Key Financial Results and Metrics

Group Revenue: Increased by 11.1% year-over-year to RMB 6.0 billion.

HWC Revenue: Rose 12.4% year-over-year to RMB 5.0 billion, driven by hotel network expansion and RevPAR recovery.

HWI Revenue: Grew 5.1% year-over-year, aided by favorable foreign exchange rates.

Adjusted EBITDA: Up 24.2% year-over-year to RMB 1.9 billion, with a margin expansion to 31.0%.

Adjusted Net Income: Increased by 38.6% year-over-year to RMB 1.1 billion, with a margin of 17.9%.

Operating Cash Flow: Generated RMB 233 million, with cash and cash equivalents at RMB 15.8 billion.

2Strategic Updates and Business Highlights

Network Expansion: Achieved a 14.1% increase in rooms in operation, totaling 13,095, with 2,865 hotels in the pipeline.

RevPAR Growth: Blended RevPAR grew 3.0% year-over-year, supported by a 4.5% increase in ADR.

Upper Mid-Scale Segment: Continued development with 1,658 hotels in operation and pipeline, reflecting a 14.4% year-over-year increase.

International Expansion: Opened 6 hotels in Southeast Asia, with a focus on Vietnam, Laos, and Cambodia.

Membership Growth: Night bookings by members increased 10.7% year-over-year to 60 million.

3Forward Guidance and Outlook

RevPAR Guidance: Maintained a cautious optimism for slight increases in RevPAR for the full year 2026.

Hotel Openings: Guidance for full-year openings remains unchanged, focusing on high-quality growth in both lower-tier and Tier 1/2 cities.

Profitability Outlook: Expect continued margin improvement driven by asset-light strategies and cost control measures.

4Challenges and Points of Concern

Market Competition: While competition is becoming more rational, there are ongoing concerns about the overall supply-demand mismatch in the hotel market.

Energy Costs: Rising energy costs have not yet impacted demand, but management is cautious about potential future effects.

Regulatory Environment: Increased regulations in the hotel industry may pose challenges to operations and profitability.

5Notable Q&A Insights

Demand Trends: Management noted steady growth in leisure travel demand post-reopening, supported by government policies and inbound tourism.

Occupancy Stabilization: There is cautious optimism regarding occupancy rates, with a focus on enhancing core competencies.

International Strategy: Plans to expand in Southeast Asia are robust, with confidence in operational capabilities in new markets.

Shareholder Returns: Management confirmed a commitment to maintaining shareholder return plans, leveraging strong cash flow and balance sheet. Overall, H World reported solid financial performance in Q1 2026, with strategic initiatives aimed at expanding its market presence and enhancing profitability, despite facing some competitive and regulatory challenges.