Detailed narrative
China Travel Market Dynamics and H World's Positioning
The China travel market is evolving, with demand shifting from discretionary to necessity, and lower-tier cities emerging as new growth engines. While overall travel demand and consumer spending are rising, the industry faces an oversupply of low-quality, homogeneous products. H World Group aims to capitalize on this by focusing on supply-side reform, offering high-quality, value-for-money products in economy and mid-scale segments, and expanding into underserved markets.
Legacy-Huazhu Operational and Network Expansion Highlights
H World's core Legacy-Huazhu business demonstrated solid performance in FY25. The group achieved stable occupancy rates and positive year-over-year RevPAR growth in Q4 FY25 for the first time since Q2 2024. Network expansion was robust, with a 16.2% year-over-year increase in rooms in operation, driving Group hotel GMV up 16.4% to RMB 108.1 billion.
Member room nights also saw significant growth, rising 21.5% year-over-year to over 245 million.
Brand Strategy and Product Innovation
The company is committed to a brand-led, high-quality development approach. This includes continuously upgrading core products like HanTing, JI, and Orange, with new versions gaining traction. A new brand, HanTing Inn, was launched to serve the mass market, purify the HanTing brand, and offer innovative room types.
In the upper-midscale segment, H World employs a multi-brand strategy with Intercity, Grand Ji, Crystal, and Mercure, with Intercity surpassing 100 operating hotels and Grand Ji set for an official launch.
Legacy-DH Business Turnaround and Future Strategy
The Legacy-DH business achieved a successful turnaround in FY25, reporting a record adjusted EBITDA of approximately RMB 500 million, a significant improvement from previous losses. This was driven by adjusted revenue management, cost optimization, and strategic portfolio restructuring, including lease renegotiations and exiting loss-making properties.
Going forward⏳, DH will focus on enhancing commercial and operational effectiveness, leveraging synergies with H World Group, and sharpening brand positioning for Intercity next generation and Zleep to accelerate growth in international markets.
Strong Financial Performance and Shareholder Returns
H World Group reported strong financial results for FY25, with group revenue growing 5.9% to RMB 25.3 billion and Adjusted EBITDA increasing 24.2% to RMB 8.5 billion, leading to a 4.9 percentage point margin improvement. Adjusted Net income grew 32.9% to RMB 4.9 billion.
The company generated RMB 8.4 billion in operating cash flow and ended the year with RMB 9.6 billion net cash. H World declared a USD 400 million cash dividend for H2 FY25, contributing to a total shareholder return of USD 760 million for the full year, completing over 75% of its USD 2 billion 3-year plan.
CFO Transition and Future Financial Leadership
Ms. Chen Hui stepped down as CFO, with Mr. Arthur Yu assuming the role. Mr. Yu outlined his priorities to build a world-class finance function, maintain rigorous control and investment oversight, and ensure transparent communication with capital markets. This transition is part of H World's vision to become a global, world-class company, bringing diversified and international talent to its management team.