Industry data indicates that since July 2025, the year-on-year decline in RevPAR for the hotel sector and its leading players has continued to narrow, showing clear sequential improvement. Passenger traffic on major business routes has grown, corroborating the recovery in corporate travel demand during September-October. However, debate persists over whether this stems from a one-time surge due to increased conference activity.
Regional supply dynamics reveal divergence: prime properties in high-tier cities and core commercial districts maintain stable growth rates, ensuring no negative supply contraction. GTHT expects the hotel industry to benefit from narrowing operational declines, improved expectations for corporate reforms, optimized capital structures, and sector-specific capital inflows—all driving significant valuation recovery.
Key insights from GTHT: 1. **Sequential Recovery Amid Uncertainty**: - RevPAR declines have steadily moderated since July 2025, with post-October Golden Week trends sustaining the improvement. - Price performance (ADR) outpaced occupancy rates (OCC) as hotels prioritized balanced operational strategies over high OCC to maximize margins. - Pricing power reflects regional supply characteristics, where localized benchmarking limits cross-region competition, allowing leaders strong pricing control.
2. **Demand and Supply Dynamics**: - Corporate travel demand recovery is evidenced by rising air traffic, though its sustainability remains debated. - Total industry room supply grew 8.5% YoY by October (vs. 9.5% in September), with chains up 11.7% (vs. 12.0%). Smaller properties expanded faster than large-scale ones, signaling late-cycle supply acceleration. - Stable yields (rental costs down ~18% vs. 2019 despite RevPAR at 90% of pre-pandemic levels) continue attracting investors, particularly to low-entry-barrier projects.
3. **Leadership Differentiation**: - **Huazhu (HTHT)** leads in absolute RevPAR (¥235 in Q2 2025 vs. Jinjiang’s ¥154 and BTG’s ¥165), reflecting superior product and operational edges. - Membership systems and direct-channel capabilities (e.g., Huazhu and Atour) underscore competitive advantages in centralized reservations and multi-tier pricing. - Operational efficiency gaps: Huazhu and Atour excel in profit margins, while Jinjiang’s higher labor and sales costs highlight room for improvement in unit economics and CRS monetization. Atour remains in high-growth mode, driven by hybrid hotel-retail models.
**Risks**: Macroeconomic volatility impacting travel demand, SME cost-cutting pressures, and intensified competition threatening pricing sustainability.