--- title: "HTHT: Leaner and unburdened, still a top performer in hotels!" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40840164.md" description: "RevPAR up further YoY" datetime: "2026-05-15T15:52:09.000Z" locales: - [en](https://longbridge.com/en/topics/40840164.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40840164.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40840164.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # HTHT: Leaner and unburdened, still a top performer in hotels! Before the US open on May 15, 2026 Beijing time, Huazhu (1179.HK/HTHT.O) reported Q1 2026 results. Overall, **revenue was solid, and operating metrics kept improving after turning positive in H2 last year, but higher sales spend amid a soft corporate travel recovery partially diluted margin release.**$HWORLD-S(01179.HK) $H World(HTHT.US) **1) RevPAR expanded YoY**. On the core metric RevPAR, Q1 came in at RMB 214 per night, up 2.9% YoY, extending the recovery that turned positive in H2 last year.**ADR rose 4.8% to RMB 285 per night as the main driver**, with structural premium still unlocking from newer versions such as Hanting 3.5/4.0 and Ji All Seasons 5.0. OCC was 75.1%, down 110bps YoY, suggesting leisure travel stayed firm while corporate demand remained tepid, weighing on occupancy. In Europe, **more EU corporate meetings and the rebound of inbound tourism lifted RevPAR by 5.3% to EUR 80 per night**. Volume and price contributed roughly evenly, outperforming China. **2) Store openings stayed brisk**. Net adds were 357 hotels in Q1, with 537 openings, keeping a high pace.**Mid-to-upscale brands (Ji All Seasons, Orange Crystal, Mercure) remained the primary growth engine**, while the economy tier focused more on renovations. **Notably, Huazhu closed 180 hotels in Q1, accelerating the exit of poorly located, aged, and loss-making properties to pursue higher-quality growth.** **3) Revenue growth ticked up QoQ**. Total revenue was RMB 6.0bn, up 11% YoY, with a slight acceleration vs. Q4.**Franchise revenue rose 20% to RMB 3.0bn on more rooms and positive RevPAR lifting per-hotel sales, with mix up 370bps to 50%.** Leased-and-owned revenue was ~RMB 2.8bn, down 1.4% YoY with a narrower decline QoQ, which Dolphin Research estimates was helped by a rebound in Tier-1 business travel and steady contributions from higher-end self-operated brands such as Joya and Blossom House. **4) Sales spend rose temporarily**. With the continued shift to an asset-light model, a higher franchise mix lifted GPM by 580bps to 39% (franchise saves on rent and labor, driving higher margins).On opex, **Dolphin Research estimates Huazhu increased exposure for mid-to-upscale brands on social media and short-video channels amid weak corporate recovery and intensified competition, nudging the sales ratio up 30bps to 4.8%**, while G&A was broadly stable. Adj. EBITDA reached RMB 1.86bn, up 24% YoY, modestly beating consensus (RMB 1.77bn). **5) Key financial snapshots** **Dolphin Research view:** Aside from a temporary uptick in sales spend, Q1 growth quality remained solid. **Three consecutive quarters of positive RevPAR (an early turn vs. peers), a record-high franchise mix, and DH turning profitable after breaking even all suggest Huazhu is shifting from cyclical recovery to structural growth.** We also see marginal shifts across the hotel industry through this print: On supply, **the biggest issue over the past two years was not weak demand but an overly fast supply release that disrupted pricing, especially in mid-to-upscale**. Projects clustered, conversions were fast, and franchisees’ expectations were high, leading to a wave of new capacity before demand fully caught up and prices cracked first. As franchisees’ ROI cycles extend, **nationwide room-count growth has slowed from 9% YoY in Nov 2025 to ~6.5% now**. While still above the normal 3%-5%, the trend clearly points to structural cooling on the supply side. **On the demand side,** Ministry of Culture & Tourism data show **Q1 trips per capita reached 3.2, up 41% YoY**. **Among discretionary categories in Jan–Apr, travel recovered the fastest to 128% of 2019 levels (vs. dining at 115% and retail at 108%).** Breaking it down, **the key incremental driver is weekend short-haul, up 7–8ppt to 78%**. Combined with a drop in ticket spending share (from 42% in 2019 to 28%) and higher shares for lodging, experiences, and F&B, **demand is shifting from holiday spikes to higher-frequency, normalized, experience-led travel.** For hotel operators, **lower volatility in occupancy means less need for aggressive discounting to fill low-season rooms**. **The focus can shift from price wars to product upgrades**, **with leaders like Huazhu, which has a higher mid-to-upscale mix, stronger membership, and more mature RM systems, positioned to benefit first in our view.** Looking into 2026, execution priorities remain clear: **brand premiumization and lower-tier expansion are the two core growth pillars**. **In Tier-1/2 cities, Huazhu will prioritize Ji All Seasons Grand (premium business), Intercity (select-city), Crystal (affordable luxury), and Mercure (intl midscale) to raise mid-to-upscale mix; in lower tiers, lighter formats such as 'Hanting Express' lower the franchise threshold and accelerate penetration**.The value of these upgrades **is not just better looks, but the ability to support a higher ADR, shorter build cycles, and stronger disruption in lower-tier markets**. On valuation, using the upper end of guidance at 2%–6% growth reflects continued recovery in leisure penetration and Huazhu’s upbeat trends in franchise growth and positive RevPAR. We also nudge up sales spend assumptions on intensified mid-to-upscale competition.Based on **2026E net profit of RMB 5.36bn and 18x**, shares are not cheap, but if peak-season RevPAR accelerates through Q2–Q3, multiples could re-rate to 20–22x, implying 10%–20% upside. Investors can calibrate to their risk appetite. **Details follow:** **I. RevPAR expanded YoY** Before diving into the P&L, we start with the operating foundation: **1.1 ADR recovery accelerated, with structural premium still unlocking** On the core metric, **Huazhu China Q1 RevPAR was RMB 214 per night, up ~2.8% YoY, marking a third straight quarter of positive growth since Q3 2025 and a faster pace vs. Q4 (+1.8%). By volume/price:** **ADR**: RMB 285 per night, up ~4.8% YoY and accelerating vs. Q4 (+4.0%). Beyond a better industry supply-demand balance, **Dolphin Research believes Huazhu’s earlier ADR recovery vs. peers stems from leading product upgrades**.Hanting 3.5, Ji All Seasons 4.0, and Orange 2.0 are not merely prettier renovations; they improve design, space efficiency, build cycle, customer profiling, and member conversion. **OCC**: 75.1%, down ~110bps YoY. **Leisure was strong, but corporate demand, while recovering, has yet to see a strong rebound and is more a stabilization**.Notably, **OCC declines were smaller for mature hotels (operating \>18 months), suggesting ramp-up pressure from new openings**. **1.2 Europe: steady recovery, DH now self-funding** Legacy-DH RevPAR was ~EUR 80 per night in Q1 2026, up ~5% YoY. By components: **OCC**: 63.3%, up ~210bps YoY, supported by spring corporate activity and continued inbound growth. **ADR**: ~EUR 127 per night, up ~1.6% YoY, steady. More importantly, profitability turned: **the market used to tag DH as asset-heavy and low-efficiency, but Q1 adj. EBITDA reached ~$60mn, extending the Q4 2025 turnaround**. This indicates restructuring (sale-leasebacks, franchise conversions, cost optimizations) is delivering, turning DH from a 'legacy drag' into a 'growth option'. **Looking ahead, Europe’s recovery continues, especially Germany, DH’s core market, where trade fairs and business travel are reviving and the Intercity brand is performing well.** **1.3 Openings remain high, structure keeps improving** Huazhu added 357 net hotels in Q1 with 537 openings, keeping a robust cadence. **Mid-to-upscale brands (Ji All Seasons, Orange Crystal, Mercure) were the clear growth engine**, while the economy tier focused on upgrades.**Huazhu also closed 180 hotels, stepping up the clean-up of poorly located, aged, and loss-making properties to drive quality growth**. **Future expansion is clear on two lanes: brand-up and penetration-down**. Mid-to-upscale brands such as Ji All Seasons, Orange, Intercity, Orange Crystal, Manxin, and Mercure will keep driving mix upgrades.**For lower tiers, upgraded Hanting and Ji All Seasons will pressure independents by leveraging brand and efficiency advantages**. **II. Franchise revenue surges, asset-light flywheel accelerates** **2.1 Topline beat** Total revenue was RMB 6.0bn in Q1, up 11% YoY, with a QoQ pickup from Q4. **Franchise revenue rose 20% to RMB 3.0bn on higher room inventory and positive RevPAR lifting per-hotel sales, with mix up 370bps to 50%**.Leased-and-owned revenue was ~RMB 2.8bn, down 1.4% YoY with a narrower decline QoQ, aided, in Dolphin Research’s view, by Tier-1 business activity and steady contributions from Joya and Blossom House. **2.2 Asset-light shift expands margins** With a higher franchise mix (saving on rent and labor vs. leased-and-owned), GPM expanded 580bps to 39%. Specifically, as Huazhu continues to reduce asset-heavy exposure and raise franchise mix, rent/lease share fell 200bps to 35%. **With stronger centralized procurement and digital consumption control, D&A and materials also edged down ~100bps, while labor rose ~100bps to 6% on network expansion and wage increases**. **2.3 Sales ratio up temporarily** On opex, **Dolphin Research estimates Huazhu raised brand exposure for mid-to-upscale on social and short-video channels given weak corporate recovery and fiercer competition, pushing the sales ratio up 30bps to 4.8%**. G&A stayed stable.Adj. EBITDA was RMB 1.86bn, up 24% YoY, modestly above the street’s RMB 1.77bn. **Dolphin Research on 'Huazhu' – past coverage:** **Earnings reviews** Mar 18, 2026: [Huazhu: After the deep squat, how long can the 'honor roll' last?](https://longbridge.cn/zh-CN/topics/39345831?channel=SH000001&invite-code=7XHHT4&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=259572f6-01b4-4a56-8deb-c7874cf0e092) Aug 21, 2025: [**Huazhu: Building the core, ready for a deep-squat rebound?**](https://longportapp.cn/zh-CN/topics/33200248?channel=t33200248&invite-code=7XHHT4&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN) Aug 21, 2024: **Domestic travel cooling, why is Huazhu accelerating openings?** May 20, 2024: A bustling holiday, a quiet Huazhu Mar 20, 2024: [Huazhu: Volatile profits, too weather-dependent?](https://longportapp.com/zh-CN/topics/20061296?app_id=longbridge) **Deep dives** Dec 23, 2022: [At $43, can Huazhu sprint to a new peak?](https://longportapp.cn/topics/3786541) Dec 14, 2022: [Up 75%, how was Huazhu’s faith forged? (Part I)](https://longportapp.cn/topics/3754634) Risk disclosure and statement: [Dolphin Research disclaimer and general disclosure](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [01179.HK](https://longbridge.com/en/quote/01179.HK.md) - [HTHT.US](https://longbridge.com/en/quote/HTHT.US.md)