Huazhu and Atour: How They Became the Biggest Winners in 2025 Hotel Travel

Over the past two years, China’s hotel industry has experienced a digestion period following rapid supply expansion.

The number of hotels continued to grow, with low-priced properties being aggressively acquired to “grab land,” leading to intensified price competition. Occupancy rates and room prices both came under pressure, and the industry once fell into an inefficient cycle of “price cuts for volume.”

Even amid overall high supply levels, some brands have taken the lead in moving away from low-price competition by upgrading products, expanding through chains, and optimizing operational structures, achieving RevPAR (revenue per available room) recovery and profit rebound.

Latest financial reports show that Huazhu’s revenue in Q4 2025 reached 6.53 billion yuan, up 8.3% year-over-year, with full-year adjusted net profit soaring by 32.9% to 4.9 billion yuan.

In Q4, Atour Group’s revenue reached 2.79 billion yuan, a 33.8% increase year-over-year, with adjusted EBITDA surging 61% year-over-year, setting a new phase record.

However, against the backdrop of still-high total supply, the recovery path of leading chains may just be the beginning of structural industry differentiation.

Structural Rebound

Currently, the domestic hotel industry is still in a stage where supply pressures have not been fully digested.

By the end of 2024, China’s total hotel count exceeded 370,000, with over 18.5 million rooms, surpassing previous industry peaks.

During the recent expansion cycle, a large number of independent hotels entered the market, making the industry characteristic of “land grabbing.” Amid slowing demand growth, price competition for volume became common, putting long-term pressure on RevPAR and ADR (average daily rate).

But in 2025, the operational data of leading chains began to show clear differentiation.

In Q3 2025, Huazhu’s RevPAR started to improve and turned positive in Q4, with a YoY increase of 1.8%. Among the drivers, ADR grew 4% YoY, becoming the core growth engine.

Atour also experienced a key turning point in Q4 2025. Its ADR ended two years of negative growth, rising 1.5% YoY, with RevPAR recovery improving quarter by quarter.

The rebound in ADR is driven by both industry-wide changes and structural factors.

Wang Xuewei, partner at Siyuan Hengyue, told XinFeng: “Since the second half of 2025, major groups have significantly slowed their expansion pace. Regionally, a tacit pricing consensus is gradually forming, reducing active price wars, and industry competition shifting from low prices to quality and branding.”

Meanwhile, competition on the supply side is shifting from price to quality upgrades, providing support for room prices.

Huazhu and Atour are both promoting upgrades to mid-to-high-end segments and upward substitution.

Atour’s non-standard, high-emotional-value product line SAVHE saw RevPAR surpass 950 yuan in Q4, indicating strong demand for mid-to-high-end offerings remains.

Huazhu is advancing its mid-to-high-end layout through a multi-brand strategy, including brands like Intercity, All Seasons Grand, Jujia Crystal, and Mecure, with new openings significantly outpacing the group’s average.

By the end of 2025, Huazhu’s mid-to-high-end hotels (including operational and in-preparation) numbered over 1,639, a 17.6% YoY increase, with core brands like Intercity opening over 100 new stores.

As demand growth slows, independent hotels lacking membership systems and management capabilities are gradually losing advantages in stock competition. More and more existing properties are choosing to join chains for more stable returns.

In 2025, Huazhu opened over 2,400 new hotels, a record high.

Atour added 67 new stores in Q4, with total stores surpassing 2,000, mainly driven by Atour 4.0 (Yanye) and Qingshu.

Demand side also shows marginal improvement.

Huazhu CEO Jin Hui stated that over the past three months, the trend in China’s hotel industry has been recovering, with steady growth in leisure travel, a gradual recovery in inbound tourism, and bottoming out of business and corporate travel demand, especially in first- and second-tier cities. The company expects RevPAR to be flat or slightly up in 2026.

Meanwhile, the leverage effect of management franchise models continues to be released.

In 2025, Huazhu’s management franchise and licensing revenue grew 23.1% YoY, accounting for 69% of Legacy-Huazhu’s (Huazhu China) total profit, up 5 percentage points from the previous year.

Atour’s full-year management franchise revenue grew 28% YoY, becoming an important driver of profit growth.

Leading Capabilities

Upgrading to mid-to-high-end has become a relatively certain industry trend.

In the context of still ample supply, mid-to-high-end hotels leverage higher room rates and stronger brand recognition, creating differentiation through space design, dining facilities, and service experience.

This not only diverts some clientele from luxury hotels but also continues to squeeze the market share of economy hotels.

According to Wang Xuewei, in the short term, mid-to-high-end hotels are unlikely to experience rapid internal competition. The logic remains strong because the market is not yet fully saturated, and it is expected to maintain mid-to-high single-digit growth this year. “Demand in this price segment does not solely pursue cost performance; quality still has significant appeal.”

Recently, Huazhu launched upgraded product lines like All Seasons Grand, while Atour has spun off Atour 4.0 as an independent brand “Atour Yanye,” signaling further expansion plans for 2026. Competition in the mid-to-high-end segment is moving further forward.

Whether for business travel, cultural tourism, or quality accommodation needs, the requirements for convenience, surrounding amenities, and comfort are generally consistent.

Under the appeal of the mid-to-high-end segment’s dividends, companies tend to focus on core cities and mature commercial districts, leading to frequent overlaps in site selection.

Wang Xuewei pointed out: “Companies with strong cost control and supply chain advantages can offer more comprehensive services at the same quality level. But not all groups have this capability. Some traditional groups face significant financial pressure, making it difficult to compete on quality at the same price point.”

Despite benefiting from the same industry recovery cycle, Huazhu and Atour occupy different positions and have different main growth drivers.

Huazhu’s expansion is more driven by chain replacement.

According to disclosures during earnings calls, over 50% of planned, under-construction, and pre-opening hotels are in third-tier and below cities, indicating the company is pushing mid-to-high-end and upgraded economy hotels into lower-tier markets, leveraging brand and supply chain advantages to gain chain benefits in county-level markets.

In 2026, the company expects overall revenue to grow 2%–6%, with franchise business growing 12%–16%. Although the pace has slowed compared to 2025, the full-year store opening target remains at 2,200–2,300, maintaining a relatively high expansion rate.

Looking at the store structure, Huazhu is further expanding its mature brands like All Seasons and Hanting into lower-tier cities, using scale advantages to replace existing stock rather than relying solely on new demand.

Overseas operations are a key variable in Huazhu’s current cycle.

In 2025, Deutsche Hospitality turned profitable, with adjusted EBITDA positive. Management expects international operations to remain profitable in the coming years, significantly improving market expectations for Huazhu’s overall profitability.

In contrast, Atour is still in growth phase.

The company’s revenue growth guidance for 2026 is 20%–24%, notably higher than the industry average, driven mainly by brand upgrades and new business expansion.

A key driver is retail business.

In 2019, Atour’s retail revenue was less than 100 million yuan; by 2025, it had grown to 3.67 billion yuan, accounting for about 41% of total revenue.

In Q4 2025, Atour hotel business grew 23% YoY, while retail business grew over 50%, becoming a major growth engine.

The significance of retail is not just in revenue scale but also in breaking the boundaries of accommodation scenarios.

Through Atour Planet and online channels, the company can reach a large number of non-staying users, extending the value of a single room into a longer consumption cycle, forming a profit model different from traditional hotel groups.

The performance rebound of Huazhu and Atour indicates the resilience of leading chains under high supply conditions.

However, from the market perspective, the different paths chosen by these two—Huazhu relying on chain replacement for steady profits, and Atour accelerating growth through mid-to-high-end upgrades and retail extension—mainly reflect capability differences.

In an environment of ongoing market uncertainty, the positive outlook for leading companies may just be isolated cases of individual leaders forging ahead.

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