Recent disclosures of the 2025 financial reports from four major domestic hotel groups have highlighted a notable trend. While some groups experienced minimal or even negative revenue growth, their profits saw a significant surge. Concurrently, other groups demonstrated a steady and rapid performance. These figures reflect a market phenomenon where, for hotel groups, efficiency, structure, and operational capabilities are becoming new critical factors for success, alongside scale. As supply continues to increase and demand becomes more rational in 2025, the hotel industry is transitioning beyond "recovery growth" into a new phase. Questions about the sources of profit, the viability of individual hotel profitability, and which investments warrant further commitment are attracting increasing attention from those analyzing these financial reports.
The disparity between profit growth and revenue performance is particularly striking. Over the past year, all four hotel groups reported growth in net profit attributable to parent company shareholders. A detailed analysis reveals that the profit-side performance of H World Group and Jinjiang Hotels attracted significant investor focus. H World's total revenue grew by only 5.93%, yet its net profit attributable to parent company shareholders surged by 66.7%. Conversely, Jinjiang Hotels saw a slight revenue decline of 1.79%, but its net profit after deducting non-recurring gains and losses attributable to shareholders of the listed company skyrocketed by 75.19% year-on-year. What explains this phenomenon of "profit growth outpacing revenue"?
For H World, a low base effect from the previous year was a primary factor. In 2024, its net profit attributable to parent company shareholders was only 3.048 billion yuan, hampered by three major factors: significant foreign exchange losses, one-time restructuring costs for its international business, and increased withholding taxes. In 2025, these "pits" were filled; foreign exchange losses decreased from 155 million yuan to 44 million yuan, one-time restructuring expenses were zero, and equity method investments shifted from a loss of 54 million yuan to break-even.
However, this was merely the foundation. The real incremental growth came from an increased proportion of high-margin business. Adjusted EBITDA is a core metric for measuring hotel operational performance. H World's Adjusted EBITDA jumped from 6.82 billion yuan in 2024 to 8.473 billion yuan in 2025. Of this 1.653 billion yuan increase, the domestic business contributed 1 billion yuan, while the overseas business contributed 653 million yuan.
The growth driver for the domestic business was primarily the franchised and licensed business. Revenue from this segment at H World increased by 23.1% year-on-year to 11.7 billion yuan, significantly raising its proportion of total revenue. Simultaneously, H World has been scaling back its directly-operated business, which requires bearing high rental costs. This strategic adjustment—expanding profitable, capital-light businesses while contracting asset-heavy ones—drove H World's operating profit margin in the fourth quarter of 2025 to 29.1%, underscoring the advantage of the asset-light model in enhancing group profitability.
The overseas business turned around from a loss of 154 million yuan in 2024 to a profit of 499 million yuan in 2025. This 653 million yuan swing provided H World with a new growth vector, attributed to "one-time asset sales, ongoing cost reduction and efficiency improvements, and healthier operational enhancements."
The stark contrast at Jinjiang Hotels—a 75.19% increase in net profit after deducting non-recurring items against a 1.79% slight revenue decline—was the result of systematic cost management. In 2025, Jinjiang Hotels reduced its combined selling, general, and administrative expenses, along with financial expenses, by approximately 480 million yuan. This reduction almost entirely covered the 406 million yuan increase in net profit after deducting non-recurring items.
This was not merely cost-cutting but a release of "management efficiency." Jinjiang Hotels implemented three key measures: streamlining its organizational structure through reforms aimed at "refining headquarters, strengthening regions, and solidifying provincial operations"; enhancing efficiency through digital tools like its membership platform and global procurement platform; and optimizing its debt structure by capitalizing on declining European interest rates. These multi-pronged efforts enabled precise control over costs.
Despite the substantial growth in its net profit after deducting non-recurring items, Jinjiang Hotels' net profit attributable to parent company shareholders grew by only 1.58%. This was because the company had recorded a significant gain from asset disposal in 2024; this one-time gain was absent in 2025. The fact that net profit still increased under these circumstances indicates that Jinjiang Hotels' 2025 profit growth was almost entirely driven by improvements in its core business operations.
The slowed revenue growth across the groups in 2025 also indicates that market supply is growing faster than demand. The performances of these two major groups suggest to industry players that profit enhancement requires not only attracting external traffic but also relying on the repair and restructuring of internal capabilities. Deepening the asset-light model, optimizing cost structures, and divesting inefficient assets are becoming core competencies for leading enterprises.
There is emerging upside potential for three key operating metrics. ADR reflects brand pricing power, OCC indicates demand absorption capacity, and RevPAR comprehensively measures single-property profit efficiency. For hotel groups, fluctuations in these three metrics are a direct reflection of supply-demand dynamics and product competitiveness.
In 2025, RevPAR collectively declined for the four hotel groups. However, a turnaround appeared in the final quarter, with three groups achieving year-on-year positive RevPAR growth and one remaining largely flat compared to the same period last year. This is a positive signal, indicating a favorable shift in market supply-demand dynamics.
The composite ADR for H World's China-managed hotels last year was 290 yuan, a slight increase of 0.2%. This was the only metric among the three key operating indicators for the four groups that showed growth for the full year. Furthermore, H World's ADR in China saw further improvement in the fourth quarter, growing 4.1% year-on-year. RevPAR also ended its multi-quarter decline in Q4, increasing by 2% year-on-year. Many view this as a sign of a market inflection point.
H World's OCC in China declined year-on-year in the fourth quarter. Considering the ADR and RevPAR data, some industry players interpreted the RevPAR growth as being "achieved by raising room rates." However, a broader view suggests that as the fourth quarter is traditionally a low season, the previous common strategy was to lower prices to attract guests. H World's RevPAR growth indicates that hotels are beginning to rely on brand premium and scientific pricing to enhance profitability. This reflects a market trend where fewer players are initiating price wars, and competition is shifting towards quality and brand.
Atour Lifestyle Holdings Limited's data corroborates this point. In 2025, although its ADR decreased by 1.1% to 431.9 yuan, it remained significantly higher than peers, demonstrating strong pricing power. Particularly in the fourth quarter, ADR achieved year-on-year growth, and the recovery rate of RevPAR improved quarter by quarter, almost reaching parity with Q4 2024. Atour's high ADR is linked to its mid-to-high-end positioning and market recognition of its premium services. Its newly launched high-end brand, SAH, saw its RevPAR exceed 950 yuan in the fourth quarter of last year. Many in the industry view Atour's experiential differentiation as the driving force behind its sustained development.
It is noteworthy that providing personalized experiences often entails higher operating costs. In 2025, Atour's operating costs reached 3.716 billion yuan, up from 3.108 billion yuan the previous year. As industry supply continues to increase, the differentiation advantage in the mid-to-high-end market could potentially weaken. If the service experience cannot consistently justify the price point, a hotel's pricing power will be tested.
BTG Hotels' RevPAR for all hotels excluding its light-management hotels increased by 0.3% year-on-year in the fourth quarter. Similar to H World, ADR increased while OCC declined. For BTG Hotels, the signal of stabilizing and turning positive ADR is particularly valuable against the backdrop of a full-year RevPAR decline of 3.4%.
Jinjiang Hotels' RevPAR for its limited-service hotels in China turned positive by 0.1% year-on-year in the fourth quarter. The most notable performance came from its economy segment, where RevPAR grew by 2.6%, outperforming the mid-scale segment. This signals another trend: against the backdrop of consumption stratification, economy hotels also demonstrate growth resilience.
"Full-year 2025 was challenging, but Q4 showed marginal improvement." This change has made industry players realize that consumers are becoming more price-sensitive and demand higher value for money. "This also indicates the industry has entered a stage of competition for effective demand—the focus is no longer just on having guests, but on whether these guests are willing to pay the current price. This shift will directly influence future hotel product design, pricing strategies, and brand positioning," one industry observer noted.
The logic of growth is increasingly focusing on long-term value. Despite signs of oversupply, these four hotel groups have not halted expansion; instead, their underlying rationale has evolved.
H World, BTG Hotels, and Atour all maintained a high pace of new hotel openings in 2025, but the emphasis has shifted from "quantity" to "structural optimization." H World opened over 2,400 new hotels for the full year, but its net growth rate slowed noticeably, accompanied by an increase in hotel closures. This indicates a strategy of optimizing network quality through "opening new and closing old" properties, rather than pure scale expansion.
After reaching the milestone of 2,000 hotels, Atour has shifted its strategic focus from "opening more stores" to "deepening the brand." For instance, "Jianye," initially a product line focused on deep sleep services, has been upgraded to an independent brand, reflecting Atour's deep dive into segmented consumer needs. The company designs products around concepts like "relaxation" and "emotional value," aiming to create a new competitive dimension in a homogenized market.
BTG Hotels' evolution is evident in its channels and structure. By the end of the reporting period, the proportion of hotels operated under franchise agreements had increased to 92.9%. The rising share of standardized products enhances its replication capability in lower-tier markets. Simultaneously, revenue from mid-to-high-end hotels now exceeds 60%, indicating a continuous upgrade in its supply structure.
The common thread in these strategies is that expansion is no longer solely about "increasing the number of outlets" but serves three objectives: improving the single-hotel profit model, strengthening brand tiering, and enhancing capital efficiency. Industry analysis suggests that future competition will not only be about "who opens more" but also about "whose hotels are more profitable." If single-hotel profitability cannot support expansion, scale can become a burden.
Analysis of the financial reports reveals that, even amidst comprehensive cost-cutting and efficiency drives, hotel groups continue to ramp up investment in several key areas. These investments are crucial not only for short-term efficiency but also for determining long-term competitiveness.
AI is undoubtedly the most certain area of investment. H World's "Huizhanggui" kiosks and "AI In-Stay Services" have systematized front-desk services and guest response, significantly reducing reliance on manpower. BTG Hotels' "AI Digital Manager" embeds AI into operational decision-making, providing intelligent support from occupancy forecasting to dynamic pricing. Jinjiang Hotels is transitioning hotel management from "people-driven" to "system-driven," utilizing a unified PMS system, AI employees for repetitive tasks, and centralized decision-making to enable systematic output of operational standards, which is particularly vital for enhancing single-hotel operations. Jinjiang Hotels submitted a listing application to the Hong Kong Stock Exchange on the same day it released its 2025 results. Compared to its first application, the intended use of proceeds has been adjusted, with "advancing overall digital and integrated transformation" added as a new focus, highlighting the company's emphasis on this area.
Investment in ESG reflects a company's long-term responsibility and operational resilience. Content related to ESG is becoming increasingly prominent in the financial reports of these hotel groups. Jinjiang Hotels integrates sustainability into daily operations through its carbon management platform and green accommodation incentives. BTG Hotels extends social responsibility to cultural preservation—launching an "Intangible Cultural Heritage Support Plan" to create regular platforms for showcasing and experiencing cultural heritage, transforming hotel spaces from mere "accommodation venues" to "cultural experience gateways." H World has established a systematic approach to employment, green operations, and educational investment. These investments are expected to gradually translate into brand advantages for the respective groups.
Through the analysis of these four hotel groups' financial reports, many industry players recognize that opportunities in 2026 lie not only in pursuing scale-driven "volume growth" but also in unlocking efficiency-driven "qualitative transformation"—optimizing profit structures through asset-light models, capturing effective demand with differentiated products, reducing operating costs via digital tools, and expanding growth boundaries through new business ventures. The industry is entering a cycle where operational efficiency, brand value, and structural optimization capabilities are paramount.
Comments