Major hotel groups have successively disclosed their 2025 operational data, revealing that both the number of new hotel openings and closures remained high. The three leading domestic hotel chains collectively closed 2,040 properties in 2025. Specifically, Jinjiang Hotels closed 597 properties, H World Group closed 733 properties, and BTG Hotels closed 710 properties. The combined number of closures for these three groups increased by over 200 compared to the previous year. Additionally, H World Group plans to open 2,200 to 2,300 new hotels in 2026 while closing 600 to 700. Overall, the closure figures for the "big three" hotel chains over the past five years rank as the second highest, only lower than the numbers seen in 2023.
Beyond the top three, Shangmei Smart Technology, ranked sixth in room inventory among domestic hotel groups, announced it will continue a special campaign in 2026 to optimize property quality, involving the comprehensive removal and upgrade of underperforming hotels that do not meet brand standards. This initiative is expected to result in the closure or optimization of several hundred properties throughout the year. The group characterized this move as a strategic shift away from purely pursuing store count and industry ranking, instead focusing on building systematic support for hotel operations proactively.
Zhao Huangyan, a senior economist in the tourism and hotel industry, stated that the primary reason for hotel closures is owners switching brands. When a hotel brand is replaced, the outgoing brand is effectively closed. Xia Zifan, Chief Consultant for Asia-Pacific at the Lausanne Hotel Management Institution, also noted that the vast majority of closures are passive decisions. Examples include aging properties where investors are unwilling to fund upgrades, or regional oversupply leading to unsustainable losses. From an observational standpoint, the current wave of closures represents a natural shake-out in the industry.
It is important to note that the top three hotel chains continue to maintain a rapid pace of new openings. In 2025, H World Group opened 2,444 new hotels, and BTG Hotels opened 1,510, both figures representing historic highs. Furthermore, InterContinental Hotels Group, marking 50 years in China, also achieved a record number of hotel openings and signings in the Greater China region during 2025. This clearly indicates that the leading domestic hotel chains are optimizing their portfolios by "opening new and closing old" properties.
In principle, hotel investors are closing older properties that negatively impact brand perception, renovating and upgrading existing branded hotels, and investing capital in new developments. Yuan Xueya, Executive Director and Chief Consulting Officer of Shanghai Xingshao Hotel Management Consulting Co., Ltd., noted that the pace and nature of these activities would change if they required investment from the hotel management groups themselves.
Regarding operational quality, H World Group emphasizes "brand leadership" to drive high-quality growth and promote supply-side reform within the industry. H World Group CEO Jin Hui stated that the company will persist with high-quality development, strengthen brand identity, deepen its commitment to excellent service, enhance member-centric marketing capabilities through its Huazhu Club loyalty program, and further empower business development with technology and AI.
Conversely, BTG Hotels adheres to a "scale-first" development strategy, focusing intensely on expanding its managed hotels and driving structural upgrades. In 2025, BTG Hotels opened 832 new managed hotels, a year-on-year increase of 17.2%. By the end of 2025, managed hotels accounted for 74.6% of its pipeline, an increase of 20.5 percentage points year-on-year, laying a solid foundation for scale expansion and structural optimization in 2026.
Xia Zifan believes that factors such as saturation in popular city markets and cooling investment due to economic headwinds are making it increasingly difficult for leading hotel groups to sustain a pure "scale-first" approach. Historically, the hotel industry has placed great emphasis on scale, with most mainstream rankings primarily based on room count and number of properties. However, as China's hotel industry enters a phase dominated by existing stock, many groups are beginning to balance scale with high-quality development.
Looking at the global market, similar trends are observable. By the end of 2025, the number of hotels in Choice Hotels' U.S. franchised system was 6,187, a decrease of 141 from the previous year, with total room inventory shrinking by nearly 3%. The group stated in its financial report that the net change in rooms reflects the strategic exit of hotels with lower economic contribution and customer satisfaction, alongside healthy growth and development activities aimed at enhancing system quality and profitability.
Several industry insiders pointed out that beyond the changes in openings and closures, the product mix of leading hotel groups is also undergoing continuous upgrades. By the end of 2025, BTG Hotels had opened 430 new mid-to-high-end hotels; the proportion of rooms in this segment increased to 42.3%, while their revenue contribution climbed to 60.6%. BTG Hotels indicated that the benefits of its supply-side structural optimization are steadily being realized, with scaled profit delivery achieved through its mid-to-high-end products, effectively translating product strength into brand loyalty and repeat business.
Jinjiang Hotels reported that its mid-scale hotel portfolio reached 8,876 properties, accounting for 62.81% of its total, with 960,400 rooms representing 70.02% of its room count. H World Group achieved a 17.6% growth in the number of its mid-to-high-end properties. Within this segment, its IntercityHotel brand surpassed 100 properties within three years, and its Crystal brand exceeded 300 properties.
An Industrial Securities research report mentioned that, in terms of the operational domestic hotel structure by the end of last year, economy, mid-scale, and mid-to-high-end/luxury hotels accounted for 47%, 43%, and 10% respectively, with the share of mid-to-high-end hotels steadily increasing. "Hotels across all tiers have their space for existence and development, with their supply-demand dynamics determined by the available supply and the demand from their corresponding consumer segments," Zhao Huangyan stated.
Yuan Xueya added that the aforementioned product iteration is partly a passive response to balance rental costs and partly a result of competitive dynamics among the groups. Notably, the new generation of economy hotels, which form the foundation of China's hotel industry, are presenting a completely new image. Information provided by BTG Hotels shows that by the end of 2025, its Home Inn 3.0 and newer products accounted for 81.5% of the brand's portfolio, enhancing product consistency. Specifically, the Home Inn 4.0 product opened 174 new properties in 2025, with a pipeline of 257 hotels, further demonstrating its market potential.
H World Group's HanTing brand, with 359,475 rooms, ranked as the largest hotel brand globally by scale. Its Hi Inn and Hello Hotel brands have leveraged technology to enhance operational efficiency and guest experience. For instance, its unmanned check-in kiosks have been deployed in over 2,500 hotels, enabling check-in in as little as 10 seconds; Tencent AI in-stay services are available in over 3,200 hotels; and its digital GOP cost management product covers 7,763 properties.
"Product iteration is an issue that should be taken seriously in every era. Product structure adjustments must align with changing consumer preferences at each stage, ensuring brand competitiveness within its segment while meeting market demand. Domestic hotel groups can achieve synchronized iteration and upgrade across their brand portfolios. There is significant room for optimization in economy products. In an era of thin margins, economy hotels should focus on adjusting spatial layouts and prioritizing revenue per square meter," Xia Zifan concluded.