H World Group-S (01179) rose more than 3% against the broader market trend. As of writing, the stock was up 3.22%, trading at HK$39.74, with a turnover of HK$22.08 million.
A CLSA research report noted that with the approaching Spring Festival holiday, consumer travel intentions are strengthening. The brokerage expects H World to continue its positive revenue per available room (RevPAR) growth trend. The report estimates that approximately 68% of the company's costs are fixed, implying high operational leverage. CLSA anticipates that the opening of more Orange Hotels, compared to Hanting Hotels, will contribute to a structural improvement in the average daily rate (ADR), leading to RevPAR growth that outpaces the industry.
Based on this outlook, CLSA raised its 2026 RevPAR growth forecast for H World from 1.1% to 2.8% and expects a net increase of 1,700 hotel openings. The report cited a survey indicating a decrease in consumers planning to spend over RMB 5,000 during this year's Spring Festival, with more opting for self-drive trips. This suggests increased travel frequency during the holiday, predominantly consisting of short-distance trips, making mid-scale and economy hotels the preferred choice. Among surveyed respondents, H World's Orange Hotel and Hanting Hotel brands ranked first and third in preference, respectively.
CLSA believes that by accelerating the expansion of its mid-to-upscale Orange Hotel brand, H World is continuously optimizing its brand portfolio and pricing power. The brokerage expects the company's RevPAR growth to consistently outperform the market. Consequently, CLSA further increased its 2026 RevPAR growth forecast for H World to 1.8% year-on-year.
Comments