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    HTHT
    Earnings call· Jun 2026(Q2 FY26)

    H World Group Q2 FY26 earnings call HTHT

    Aug 17, 2026 Source

    Executive summary

    H World Group Q2 FY26 — Strong Asset-Light Growth and Shareholder Returns

    H World Group delivered a robust Q2 FY26, driven by strong asset-light growth in China and expanding margins, despite headwinds in its international segment and volatile domestic travel demand. The company continues its high-quality network expansion, particularly in lower-tier cities and upper mid-scale segments, while committing to significant shareholder returns and strategic investments for long-term growth.

    Highlights

    5

    • Group hotel GMV grew 13.2% year-over-year to RMB 30.5 billion.

    • Manachise and franchise revenue increased 25.2% year-over-year to RMB 3.6 billion.

    • Adjusted EBITDA increased 20% year-over-year to RMB 2.7 billion, with margin expanding 3 percentage points to 38.3%.

    • Adjusted net income grew 26.9% year-over-year to RMB 1.7 billion, with margin improving 3 percentage points to 24%.

    • Announced a new 3-year shareholder return plan of USD 2.5 billion, including an ordinary cash dividend of USD 275 million.

    Concerns

    4

    • HWI's blended RevPAR decreased 3.8% year-over-year due to Middle East conflict and Southeast Asia ramp-up.

    • International business revenue decreased 5.8% year-over-year to RMB 1.3 billion due to leased hotel closures.

    • July RevPAR was negatively affected by severe weather in some regions.

    • Total domestic travel spending growth moderated to 2% year-over-year in H1 2026, reflecting more prudent spending.

    Guidance & targets

    6
    CategoryTargetConfidence
    Full-year 2026 RevPAR trend
    unchanged
    high materiality
    Medium
    Full-year 2026 hotel opening guidance
    maintained
    medium materiality
    Medium
    Full-year HWI business profit
    positive profit
    medium materiality
    Medium
    Shareholder return plan
    USD 2.5 billion
    high materiality
    High
    Ordinary cash dividend
    approximately USD 275 million
    medium materiality
    High
    Adjusted EBITDA margin
    continue to expand
    high materiality
    Medium

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    China
    Supported by steady and high-quality network expansion as well as continued RevPAR recovery. Marked fourth consecutive quarters of positive ADR growth.
    ADR growth YoY: 2.6%RevPAR growth YoY: 1.1%
    		RMB 5.9 billion14.9%——
    International (HWI)
    Due to closure of leased hotels and therefore a decline in lease revenue. Blended RevPAR affected by Middle East conflict and Southeastern Asia expansion ramp-up.
    Blended RevPAR decrease YoY: 3.8%ADR increase YoY: 0.9%Occupancy rate decrease YoY: 3.5 percentage points
    		RMB 1.3 billion-5.8%——
    Europe (within HWI)
    Delivered solid performance, driven by improvements in both ADR and occupancy.
    RevPAR growth YoY: 1.1%
    		————

    Operational metrics

    18
    Manachise and Franchise Revenue
    RMB 3.6 billion25.2% YoY growth
    Q2 FY26

    Reflects robust growth from the group's asset-light business model.

    Manachise and Franchise Gross Operating Profit
    RMB 2.2 billion18.5% YoY growth
    Q2 FY26

    Strong profit growth from the asset-light business.

    Adjusted EBITDA
    RMB 2.7 billion20% YoY growth
    Q2 FY26

    Another quarter of strong profit growth.

    Adjusted EBITDA Margin
    38.3%3 percentage points YoY expansion
    Q2 FY26

    Margin improvement attributable to growing profit contribution from asset-light business and controlled G&A expenses.

    Hotel Operating Costs
    7.4%YoY increase
    Q2 FY26

    Increased slower than revenue growth, reflecting the shift to asset-light model.

    SG&A Expenses
    6.1%YoY increase
    Q2 FY26

    Increased slower than revenue growth, reflecting cost management capabilities.

    Adjusted Net Income
    RMB 1.7 billion26.9% YoY growth
    Q2 FY26

    Strong growth supported by asset-light expansion and improved RevPAR.

    Adjusted Net Income Margin
    24%3 percentage points YoY improvement
    Q2 FY26

    Improved margin reflecting operational efficiencies.

    Domestic Resident Trips
    3.5 billion5.4% YoY increase
    H1 2026

    According to the Ministry of Culture and Tourism, indicating steady growth in domestic travel.

    Total Domestic Travel Spending
    RMB 3.2 trillion2% YoY increase
    H1 2026

    Reflecting moderated growth and more prudent spending decisions by travelers.

    Rooms in Operation
    12.7%YoY increase
    Q2 FY26

    Contributed to the growth in group hotel GMV.

    Hanting 3.5+ Version Penetration
    >55%
    current

    Indicates significant progress in upgrading the Hanting product portfolio.

    Hanting JI Hotels in Operation and Pipeline
    >200
    current

    Development is better than expectation, with strong operational performance.

    Grand JI Hotels in Pipeline
    >20
    current

    Focusing on prime locations and refining the business model for this upper mid-scale brand.

    Total Employees
    >260,000
    end June

    Reflects continuous expansion of the hotel network and job creation.

    OTA Contribution to Bookings
    20-25%stable
    current

    OTA support is important, especially for new markets like inbound and lower-tier cities.

    Shareholder Return Plan
    USD 2.5 billion
    3-year plan

    New plan approved by the Board, following the completion of the 2024 plan one year ahead of schedule.

    Ordinary Cash Dividend
    USD 275 million
    current

    First distribution under the new 3-year shareholder return plan.

    Industry KPIs

    3
    MetricValueDetails
    Comparable sales comps1.1%%
    Gross bookings value room nightsRMB 30.5 billionRMB
    Net unit growth development pipeline13,417hotels

    Deals & partnerships

    4
    DBCross-industry partnership

    Part of strategy to deepen cross-industry partnerships for H Reward members.

    Multiple airline companiesCross-industry partnership

    Part of strategy to deepen cross-industry partnerships for H Reward members.

    New energy vehicle companiesCross-industry partnership

    Part of strategy to deepen cross-industry partnerships for H Reward members.

    AccorMembership partnership

    Deepened cooperation on membership partnership to capture inbound demand and allow Chinese travelers to stay in Accor hotels abroad.

    Risks & headwinds

    5
    Middle East conflictQ2 FY26

    HWI's blended RevPAR decreased 3.8% YoY; International business revenue decreased 5.8% YoY to RMB 1.3 billion.

    Mitigation: HWI cost control measures; managed and franchised hotels limit impact on HWI's revenue and profit; optimize HWI operational efficiency.

    Southeastern Asia expansion ramp-up periodQ2 FY26

    HWI's blended RevPAR decreased 3.8% YoY.

    Mitigation: Optimize HWI operational efficiency and push forward strategic layout in Asia Pacific market.

    Moderated domestic travel spending growthH1 2026

    Total domestic travel spending up 2% YoY to RMB 3.2 trillion in H1 2026.

    Mitigation: Focus on mass market lodging segment, emphasize high-quality development, leverage multi-brand portfolio and digital capabilities.

    Severe weather impactJuly

    July RevPAR negatively affected in several regions.

    Mitigation: Maintain a cautiously optimistic view for overall demand; focus on long-term growth potential.

    Macro environment uncertaintiesH2 FY26

    Overall demand outlook remains uncertain.

    Mitigation: Maintain cautiously optimistic view; reiterate full-year RevPAR guidance unchanged.

    What to watch in Q3 FY26

    5

    Overall RevPAR trend

    next quarter
    CurrentJuly negatively affected by severe weather, August recovering
    TargetUnchanged full-year 2026 RevPAR guidance

    Why it matters

    RevPAR is a key indicator of hotel operational performance and demand recovery, crucial for assessing the impact of macro uncertainties and weather events.

    [Interpreted] For the full year of 2026, we maintain our view for the overall RevPAR unchanged.

    Q&A highlights

    5

    How has RevPAR performed during the summer holiday, and what is the outlook for Q3 and full-year 2026, given macro uncertainties and a higher base?

    China's leisure travel demand is steadily growing, supported by government policies and emerging travel scenarios. July was negatively affected by severe weather in some regions, but August shows recovery. The company maintains a cautiously optimistic view and reiterates its unchanged full-year 2026 RevPAR guidance.

    “[Interpreted] For the full year of 2026, we maintain our view for the overall RevPAR unchanged.”

    asked by Lydia Ling · answered by Hui Jin

    2 min read6 chapters

    Detailed Narrative

    01

    China Travel Market Trends

    Domestic resident trips in China reached 3.5 billion in the first half of 2026, representing a 5.4% year-over-year increase, with inbound tourism also gaining strong momentum. However, total domestic travel spending grew at a more moderated pace of 2% year-over-year to RMB 3.2 trillion, indicating a shift towards more frequent but prudent spending decisions among travelers. The government's long-term tourism plan targets 8.3 billion annual domestic trips and 190 million inbound tourist arrivals by 2030.

    02

    Strategic Expansion & Brand Leadership

    H World Group is committed to high-quality network expansion, focusing on lower-tier cities while optimizing prime locations in core cities. The group's hotel GMV grew 13.2% year-over-year to RMB 30.5 billion in Q2, supported by a 12.7% YoY increase in rooms in operation. Hanting and JI Hotel brands have achieved global recognition, securing the top two spots in single-branded room counts, with Orange Hotel also climbing to 26th globally, underscoring the effectiveness of the multi-brand strategy.

    03

    Upper Mid-Scale Segment Growth

    The upper mid-scale segment remains a core strategic area for H World, presenting significant development opportunities from consumption upgrades and demand capture from traditional upscale hotels. The company is leveraging its four flagship brands—Intercity, Grand JI, Crystal, and Mercure—to drive market share gains. As of end June, H World China's upper mid-scale brands had 1,738 hotels in operation and in pipeline, marking a 13.4% year-over-year increase.

    04

    Membership Program & Direct Sales

    The H Rewards membership program is a key competitive advantage, with steady growth in both membership base and room nights booked by members. The company is actively refining membership benefits, including the recent launch of a family card, and expanding cross-industry partnerships with entities like DB, airlines, and new energy vehicle companies. Efforts are also underway to accelerate H Reward's international presence and optimize the app to capture inbound travel demand, including deepened cooperation with Accor.

    05

    Social Responsibility Initiatives

    H World Group is proactively fulfilling its social responsibilities across three key areas. Firstly, it boosts local employment, with the total number of employees exceeding 260,000 as of end June, supported by internal talent development programs. Secondly, the company promotes energy-saving management solutions for its hotels and franchisees. Thirdly, through its charity foundation, H World engages in public welfare programs, including educational assistance and post-disaster support.

    06

    International Business Performance

    HWI's blended RevPAR decreased 3.8% year-over-year in Q2, primarily impacted by the Middle East conflict and the ramp-up period of its Southeastern Asia expansion. Despite these challenges, the Europe business delivered a solid performance, with RevPAR growing 1.1% year-over-year. The international business revenue decreased 5.8% year-over-year to RMB 1.3 billion, mainly due to the closure of leased hotels. The company aims to achieve positive profit for its HWI business for the full year through cost control.

    AI-generated summary of the company’s earnings call. Not investment advice.