H World Group (HTHT) Q1 2025 earnings summary

Executive summary

• Revenue grew 2.2% year-over-year to RMB 5.4 billion in Q1 2025, with Legacy-Huazhu up 5.5% and Legacy-DH down 11.3% due to asset-light transformation.

• Adjusted EBITDA increased 5.3% year-over-year to RMB 1.5 billion; net income attributable to shareholders was RMB 894 million, up 35.7% year-over-year.

• Hotel network expanded 19.5% year-over-year to 1,142,158 rooms, with 694–695 new hotel openings and 155 closures in Q1 2025.

• Asset-light strategy advanced, with 92% of rooms under manachise/franchise models and 46% of group revenue from asset-light operations.

• Membership base reached nearly 280 million, with direct bookings through central reservation up 5.4 percentage points year-over-year to 66.4%.

Financial highlights

• Manachised/franchised revenue rose 21.1% year-over-year, while leased/owned revenue declined 9.4%.

• Adjusted EBITDA margin improved, with Q1 2025 adjusted EBITDA at RMB 1.5–1.6 billion.

• Operating cash flow was RMB 580 million; cash and equivalents at RMB 8.2–11.8 billion, net cash position RMB 3.0–6.5 billion.

• Hotel operating costs grew 1.1% year-over-year, slower than revenue growth; SG&A expenses decreased 1.8% year-over-year.

• Net income margin improved, with net income at RMB 894 million, up from RMB 659 million year-over-year.

Outlook and guidance

• Q2 2025 group revenue expected to grow 1%-5% year-over-year, or 3%-7% excluding DH.

• Manachised/franchised revenue projected to increase 18%-22% year-over-year in Q2.

• RevPAR for Q2 expected to decline at a low single-digit rate, narrowing sequentially.