Q2 2022 GreenTree Hospitality Group Ltd Earnings Call
Pardon me. This is the conference operator, today's green tree call will begin in a few minutes and we ask that you. Please continue to hold.
Again, the Green tree call will begin momentarily. Please continue to hold on the line. Thank you.
[music].
Hello, Ladies and gentlemen, thank you for standing by for Green Tree first half 2022 earnings conference call.
At this time, all participants are in listen only mode.
After managements prepared remarks, there will be a question and answer session.
As a reminder, today's conference call is being recorded.
I would now like to turn the meeting over to your host for today's call. Mr. Rene. Thanks, Shane of Christian said Green Tree's Investor Relations firm. Please proceed Rene.
Thank you Andrea.
Hello, everyone and thank you for joining us.
Increased earnings release was distributed yesterday and is available on our IR website.
99, <unk> Dot Com is what is on PR newswire services.
As a reminder, we also posted a powerpoint presentation that accompanies our comments to the C&I side.
On the call from Greensboro, Yao, Mr Qi, Chairman and Chief Executive Officer.
So these are young chief financial Officer.
Ms Megan Huang Vice President of sales and marketing and I learned water IR officer.
Mr. Chair, we have presented the company's performance over the first half of 2022.
MS Wang who will discuss business operations and Missy I will then discuss financials and guidance.
They will be available to answer your questions during the Q&A session, which follows.
Before we begin I'd like to remind you that this conference call contains forward looking statements within the meaning of section 21 E of the Securities Exchange Act of 19, Ted before ASR mandates.
And as defined in the U S. Private Securities Litigation Reform Act of 90 95.
These forward looking statements can be identified by terminology such as may wait them.
<unk> anticipates aims future intends.
I believe it.
Let's continue down got it.
So are likely to going forward them to be done.
Outlook and similar statements.
Any statement that I'm, not historical facts, including statements about the company and its industry are forward looking statements.
Such statements are based upon management's current expectations and current market and operating culture.
And relate to events that involve known and unknown risks uncertainties and other factors all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results performance or achievements to differ materially from those in the forward looking statements.
You should not place undue reliance on these forward looking statements.
Further information regarding these and other risks uncertainties or factors is included in the company's filings with the U S Securities and Exchange Commission.
All information provided including the forward looking statements made during discomfort with school.
As of todays date.
The company does not undertake any obligation to update any forward looking statement as a result of new information future events or otherwise.
As required under applicable law.
It does sound like they have to introduce our chairman and Chief Executive Officer, Mr. Alex Xu and Mr. Zhu. Please go ahead.
Thanks, Rene Hello, everyone and thank you for joining us today.
The first half of 2022 was extremely challenging that's COVID-19 outbreaks in many parts of the country.
Drastically limited mobility in many regions.
Nonetheless, we continued to execute our long term strategic growth plan to deliver continued operating profitability Mount.
Among 10 healthy and stable cash flow.
N L. All hotels in new strategic locations.
And assist franchisees in my opinion quality operations.
We used to outsource of staff and the cooperation of the franchisees, we believe that the wind chill a path eventually and the spring up the hotel industry's recovery is coming quickly.
Please turn to slide five.
Comparatively the first half of 2021.
Raw project Creased, 20.78% to 92 RMB.
Total revenues decreased 22, 3% to $457 4 million RMB.
Income from operations decreased 403.7% to negative $457 7 million RMB with a margin of negative 100.1%.
The sharp decrease was due to the author of general expenses, which included one time impairments and provisions for other assets.
We took impairment charges for Argyle as a result of disputes, which its management as to the performance of relevant transaction documents.
And our compliance with the guarantees in the agreements.
And the urban in connection with the sale of our interest in that company.
We also took a provision for other assets related to properties in the huge Hall business Center.
Which we intended to buy from Arrow Grand affiliate fall of headquarters and two flagship hotels as well as for loan receivables related to franchisee loans.
Excluding these income from purely operating activities was 72 9 million RMB.
The margin of seven 2% and the net income it was six to eight points three milling RMB with a margin of 14, 9%.
non-GAAP core net income decreased 13, 7% to $105 9 million RMB with a margin of 23, 2%.
And our core net income per a D. S. That's basic and diluted non-GAAP decreased 13, 7% to one to 1.03 RMB.
Slide six shows detailed numbers for total revenue.
Putting income matching come and core net income.
On slide seven.
Operating performance was seriously impacted in the first half of 2022.
Draw par was at 72, 6% and 65, 5%.
After 2019 levels.
In the first and second quarter, respectively, and exceeding the industry's average.
And in the third quarter, we continued to.
To outperform the industry with the railcar recovering to a T points, 3% off the 2019 level.
Slide eight shows the weekly raw power performance in 2022 compared with 2019.
After dropping initially.
Draw Parr recovered to eight 8% over the Chinese new year, Thanks to family reunions and the recovery in domestic tourism. However.
However, could be 19 outbreaks in March and April led to some restrictions in many cities and Lockdowns in some major cities, sending raw power all the way down to 56% during Golden weeks.
As the Lockdowns end it draw power rebounded gradually to 92, 9%, but the last week of June and 91, 2% at the beginning of August .
October and November brought a fresh leap outbreaks.
Slowing down our recovery once again and are negatively impacting travel joined the National day holiday.
One of the most.
Active travel period in China.
During this period according to the Ministry of culture, and tourism, It's a number of tourists dropped to 61, 7% and the domestic tourism revenues dropped to 44.2% off the level was in the same periods of 2019.
Our raw product dropped to 6% to 8%.
And as I said again outperformed this ah well exceeded the industry average during that entire period.
However, with the flexible anti pandemic measures released by the government early in December .
<unk> recovered that this amounts to more than 85% office pre pandemic levels.
Now stop.
Starting with slide 10, let's talk about the strategy and execution with a further expansion in the mid to upscale segment and the tier three and the lower cities in southwest and the southeast China as well as the opening of new L. A hotels.
Let's take a look at slide 11.
We have been continuously grown Amit upscale segment or the past few years.
By the end of the first half of 2022 we had a 528 hotels 11, 3% of our total portfolio.
In this segment up from only 50 in 2017.
And we plan to open more this year.
Please turn to slide 12.
Over the past five years, most of our new hotels have binion, China's thriving tier three and the lower cities, whereas he have recovered faster than in other cities in most quarters.
In addition hotels in some lower tier cities are performing well.
As we continue to execute our strategic plan.
68, 4% of our hotels in our current pipeline are in such cities and we will further capitalize on the substantial opportunities in these locations.
Let's have a look at slide 13.
Things 2021, we have started to build a flagship I'll also toss in strategic locations, especially in the southeast and southwest markets.
In 2022, despite the stress from COVID-19, we opened a true meat to Upskill L. A hotels the remaining four in the pipeline are expected to open in 2023 at high coal East real base station punching Nasrawi station.
Crunching Chompy International Airport, and the Foochow will base station.
Let me now say a few words about the acquisition of affiliated the food in the restaurant business.
Since our announcement of signing up a S. P. A in May of 2022. The company has been working on the closing of the food in the restaurants acquisition transactions. However.
Due to the resurgence of COVID-19, we experienced significant delays in the delivery of various documents to various agencies.
While our China removed many COVID-19 related restrictions in December the company is speeding up the closing process weeks.
We expect the formal closing will be completed in January 2023.
Later than we originally planned.
We will inform the market when the transaction formerly closest.
Over the past three years, we have adopted a strict cost control measures to enhance operating efficiencies.
Our at tap the ball business strategy as well as inside.
Our team and franchisees have again from facing COVID-19 has given us the ability to quickly adjust to changes in our industry setting a solid foundation for future growth.
The joining of hat may be difficult, but with the support of our shareholders franchisees and staff, where can we are confident to pull through I embrace a bright future.
Now, let me turn the call over to Megan.
Thank you Alex.
Please turn to slide 15, which highlights the growth in a number of hotels in the year over year rebound in our operating metrics from the impact of COVID-19.
And then Adi secondly, contact from 'twenty to 'twenty, two decreased 14% to 147 RMB occupancy.
Occupancy rate decreased 16, 4% to 62.2% and the Revpar decrease of 31, 9% to 91.
Moving to slide 16 at the end of the second quarter of 'twenty 'twenty. Two we had 4669 hotels in operation to one 8% more than a year before.
Six or seven of these hotels were leased and operated Oh, Yeah, Oh cows, and 4622 franchised and managed or FM hotels.
While the mid scale segment remains the core of our business was 64, 2% of all of our hotels.
Continued always tension into the higher end segment.
By the end of the second quarter mid.
Two upscale hotels accounted for 11, 3% of our total portfolio.
While the economy segment remained stable at 24, 5% with solid fight our already dominant position in tier three and the lower cities, where 67, 8% of our hotels are located at the end of June 2022.
On Slide 17, you can see that we opened one 281 hotels in China less than planned due to COVID-19, compared to 482 in the first half of 2021 or history or in the mid to upscale segment 108 in the Midscale segment and 15 would be it.
My segment 21, 4% of these new hotels were in the mid to upscale segment of the market.
31 tier one cities the tier two tier two cities and the remaining 136 in tier three and lowest it well.
We closed 140 hotels at peak for due to noncompliance with our brand and operating standards. The remaining 86 or low due to property related issues, we added a match.
One hotels to our portfolio.
Slide 18 shows the trend of our core.
Operating performance in.
The second quartile 2022 revpar for all hotels increased to 124 R&D Revpar for our hotels decreased to 19, RMB 18 ADR for.
Well I'll, let al I'll tell us increased to 217, RMB and ADR for our F. M hotels decreased to 145 R&D.
Infancy in our L. A hotels increased to 57, 1% and also busy at our hotels increased to 62, 3%.
I'm trying to third quarter Revpar continues to recover both al I'll tell them at some hotels.
Slide 19 highlights the growth in our membership program, which accounted for most of our direct sales in the first half of the year.
Individual members grew to 74 million up from 62 million a year ago and corporate members grew to $1 9 million up from one 8 million a year ago.
We have one of the highest percentage of room nights booked by corporate.
Members in the industry.
I'll pass the call over to our CFO suite of yeah.
Thank you Megan.
Please turn to slide 20.
In the first half of 2022 total revenues decreased 22, 3% year over year.
Two of 457 points for media M D.
Total RASK, new as far as hotels were 270, 545 media arm being down 34% year over year.
While total revenues from airports house decreased 1% to 171 front Street media on.
On slide 21.
You can see that total hotel operating cost and expenses.
919 million RMB.
100.8% year over year increase.
Which is many trips Boe to one hand procedures well.
Well I'll ask that and higher rents and increase of other costs, resulting from the expansion of our hotel.
In the first half of the year hotel operating costs were 378.
Up 7.4% year over year.
Increase was mainly attributable to the opening of 34 hotels since 2001, we.
Which resulted in higher rents higher utility costs.
It's tough comps and a compensation and higher depreciation and amortization.
Excluding the impact from newly opened hotels.
Our hotel operating costs decreased at 14, 1%.
Selling and marketing expenses were 18 19, yeah on.
Our year over year decrease of 52, 7%.
The decrease was mainly attributable to lower advertising expenses and staff related expenses.
Due to less business travel was caused a damage.
General and administrative expenses were 19, nine 7 million RMB in the first half of 2022.
Down 21, 5% comparable with the first half of 2021.
The decrease was mainly attributable to the reduction of travel expenses and consulting fees.
Other general expenses, well 419 6 million RMB in the first half of 2022, which included one time impairment charge for alcohol and urban.
One time probation, so if all the assets and the loan receivables as mentioned earlier.
Turning to slide 22 income from operations was negative 457 7 million RMB.
403, 7% year over year with the module off back to your 141%.
Excluding other general expenses smashing that bought it.
Income from operating activities was 32 9 million RMB.
With a margin of seven 2%.
And that's in Congress.
H Prince Street media arm B with a margin of 14.9%.
Adjusted EBITDA decreased 46, 8% to RMB 93 9 million.
And adjusted EBITDA margin decreased to 44%.
Core net income was $105 9 million in arm B with the module front Street friendship offense.
This decrease is mainly attributable to the increased number of Aero hotels, both newly opened and in the pipeline.
Excluding the impact of newly opened and pipeline hotels.
Adjusted EBITDA and non-GAAP for the first half of 2022 was 139 Street media weights.
With a margin of 34, 9%.
And core net income was $163 9 million M B with a margin of 41, 1%.
Please turn to slide 23.
Net income for it yes, what.
<unk> Street for a T M b that you're a solid 47 cents.
Core net income per basic and diluted non-GAAP .
Whereas 1.3 on B Sachi, a solid 15 cents.
Let's now take a look at slide 24.
As of June 32022, the company had total cash and cash equivalents restricted cash just hurting your box demand you must have in Seattle. Just curious he has been time deposits of 1070 9.5 million RMB compared to $1235 9 million.
As of December 31st two started trying to fly.
The decrease from the end of 2021 was primary attributable to the repayment of bank loans.
And the loan to an affiliate of pets, who did restaurant fitness, which is to be merged with some company in January 2023.
Offset by cash from operating activities.
Oh, it's like 25, given the large number of Covid outbreaks in many parts of China throughout 2022 fitness began to improve as we initially expected.
Sure. It does see easing of restrictions early December .
Consequently, we have adjusted Iraqi copper than guidance for the full year of 2022% to 81% to 84% of that 2021 levels.
This concludes our prepared remarks.
We are now ready to begin the Q&A session. Thank you.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
If you are using a speakerphone please pick up your handset before pressing the keys.
To withdraw your question. Please press Star then two.
Once again that what Star then one to ask a question and at this time, we will pause momentarily to assemble our roster.
Yeah.
Yeah that was star then the number one on your telephone keypad to ask a question.
I am showing no questions at this time I would like to.
To turn the conference back over to Jeff.
Young for any closing remarks.
Okay. So operator under Rene how are we able to make sure that our analyst the gaut or a message and so the phone call.
Paul has no problems and.
So, we're making sure all of our audience and including all analysts to have a less than half of that being able to share with you have discussed.
I think so Alex.
Yeah, well, obviously bumped all day long.
And everybody has been very good.
C J.
So good question.
Can you just read from quarters outside.
Certainly once again, if you would.
Like to ask a question on your telephone please press the star.
Well looks like your number one.
And your telephone.
And now we have a question from Al Wang.
Goldman Sachs. Please go ahead.
Yeah.
Thank you can you hear me.
Yes Hello.
Thank you. Thank you management for the Sherry.
This is alpha won't calling from Goldman Sachs.
We have to.
Can management provide.
Oh.
Revpar in.
Okay.
And the second.
In relation to the potential conflicts with the hotel groups acquire before.
Do you expect any other similar.
Incidents going forward. Thank you.
So thank.
Thank you so much for reading the question. The first question I, we I couldnt share clearly acting perception.
It isn't very clear the second I want to repeat you said that do you do we expect the similar.
Situations like with the.
One or two of the groups we have acquired before so we got that what about the first question.
Oh, yes, I'm sorry for the back signal came here now.
Yes.
The first question is could you kindly share the.
Revpar and hotel AD guidance for FY 'twenty three the next year.
Okay got it thank you.
Okay.
For the.
But the raw PA and the hotel number of hotel openings I think that.
C.
We plan to open.
Above 600 hotels.
During the 2023.
And three we still believe the first.
Couple of months won't be impact the first few months will be impacted by the recovery of the COVID-19. So the operation will not be as.
Especially on the development side that would not be.
Recovered to the full potential.
And so.
In Trump's raw PA and at.
At this moment as said really.
Difficult to project the raw PA.
We hope the raw power wall minimum achieved over.
Overall, 90%.
A ball that pre pandemic levels during the 2023.
That's consolidated numbers, we also.
Receipt and from other industry related to the travel is related to the hotels in Trump's their projections of the recovery.
Or is it market.
That's for the 2023 and later Selena may add.
But in terms of the.
Deconsolidation.
Also I want to bring to our attention to everybody. The reason we have a late first half of 2022 suites.
It's also because sufficient deconsolidation process.
Is that right.
All right.
We did not anticipate.
Hmm.
Let's see.
Delay.
All of that cost.
And looking looking at some of the issues.
We don't think.
We were experiencing similar wise for others.
Company.
Sure.
Great relationships with all of them.
And because we respect.
And also work closely closely with all of our joint venture partners with our franchisees.
And I think the fact that the.
Uh huh.
Cough dispute.
Is.
A one time.
And we don't expect.
That will.
Can continue.
Author Harry Yes, so.
That's why in the new year.
We will continue we have ample capital available.
Two places strategically.
Let's see.
The growth of the company.
Okay. Thank you, Alex, particularly NASA right.
Yeah, Yeah, Alex It may be U K are you.
Larger your worries forgot a weekend here you are hopefully a more clearly yeah and this is Linda.
Thank you Mr. Huang for the question and I will also provide our revenue guidance for the year to southern title III and our fourth quarter performance report.
Thank you.
Thank you.
Thank you.
Uh huh.
Uh huh.
You know what.
In the past.
Sorry about that.
It seems to be a little far away from one of the microphones so that to your worrisome.
Lower than before.
Okay Alright.
So I want to cover later closer okay.
Thank you.
And one more question.
Go ahead sorry.
The next question comes from Dan Shaw Morgan.
Stanley. Please go ahead.
Hi, good morning.
Thank you for the presentation.
Thanks, Mike.
Got it.
I have two questions.
First question just to clarify that.
We will start to consolidate.
And Oh buttons bursty valiquette now starting second half according to that announcement. So when you provided guidance for 2020 to Douglas excluding two it's just to clarify excluding all go and all of that.
And if that's so good.
Can you kindly remind us in the first half revenue how much of the.
Specialty auto revenue.
Revenue was already consolidated in the first half so we know what kind of impact will have.
That's my first question. Thank you.
Okay. Thank you that Alex that I answered the question of accident.
Okay deconsolidation of Argos is that do we have a readout in two 5% decrease in revenue if comparable with a year of 2021 and also the deconsolidation of urban since the fourth quarter will be a resulted in a 3% decrease in Iraq you. Thank you.
Thank you. Thank you so much.
Second question was about so.
Right now so after the consolidation of <unk> and then I'll go off what will be our strategic.
A strategic partnership with especially with Argo since we currently have only the other o'brien as our luxury.
Second one so does it mean that we will move away from luxury segment and just focus on our eastern Med deep sleep and also our three.
G B brands up on.
And upscale so small about me.
To upscale and also luxury strategy going forward. Thank you.
Okay.
I'll kick off with a question okay. Thanks, Dan.
<unk>.
At the core of a clarification.
One more comment.
Yes.
Think that the with the deconsolidation, we hope that we'll see.
Improvement of the bottom line and even though with.
A small loss of the revenue on the top line with the deconsolidation.
So.
The decision the board.
Hum.
Is going to be.
Great.
Oh for everybody. So we can recall.
Council consolidations Argyle.
And our.
Our focus for all continue to develop.
<unk>.
Including what you just said that.
The five brands, we have currently I think that they're all going.
Improving rapidly.
In addition, we are also.
Developing.
Our higher end brands, our joint venture partners and we have several law.
Our joint venture partners.
Cool.
He has experience and expertise along with US all along with also some chatter.
Bulks down all of them in service.
Our style of hotel brand. So we'll continue trying to.
And expand to cover the full rent.
Brands.
Segment.
Coating.
And you can see.
Sure.
Oh, Oh Oh.
From.
Economy off away.
Four or five star.
That's how our long term strategy.
Hum.
The current immediate focus so.
We have to capitalize on the experience and the insights we have gained given the lives of three years operation.
On the call.
And you flagged that until you.
Actually improve our system and the operating efficiency, because we think that 2023, the first half of the six miles according to the school.
Challenging.
And with that then.
We are also going to utilize it.
Hi.
Actual.
Working closely with many of our regional.
Tom Ridge Hill partners.
To improve our products and to have products and services.
Quality.
And.
We still have capital available.
During the three years challenging time.
And I think to explore more strategic investments to phonetic.
All of our.
Partner Sam Shaw.
Our.
Yes.
Uh huh.
To long term strategy.
Thanks, Dan.
Okay.
Thank you thank you Alex.
Thanks.
Our next question comes from Peter Yang of Goldman Sachs.
Go ahead.
Hi oriented Shanghai management Alpha has already helped me to ask one question.
Just a follow up and to confirm that the ATA general expenses in the second half of 2022, so there will be no more.
Like onetime impair.
Impairment that we can expect is that if I understand correctly. Thank you.
So Dana would you like to pick up that question.
Hi, Mr. Yao Oh this is the Lena.
So D a.
I repeat your question you want to know more detailed information about the general expenses for the year of 2022 and that correct.
Ah yes.
For second half and.
For next year if possible.
Okay. So oh, okay. Thank you for your question I think so far the Peters question, whether we have this one time impairment.
Maybe just on the first half of 2022 do we expect more in the second half do we have any in the second half of the year or the future. So we.
We discussed we took this very seriously Peter it because we want to make sure all of our investments are made.
Thirdly, and we've set the.
Utmost responsibility.
The past three years.
Pandemic pure that and read it last longer than.
We originally expected so there are issues related to that period.
And we take a bond at the caution.
And I think.
As much.
As possible I think for the first half of 2022 and personally I don't expect that to any.
Major any major impairments due in the second half of the year or the future.
The only thing.
We indicated that.
In the first half of 2022, because we took household care.
Ah precautions in terms shell.
A key franchisee rules because of certain project franchisees.
Uh huh.
Gave on franchisee flexibility too.
The financial cost.
And without that our accounting extend them he treated at that okay. So that potentially there should be a probation for.
Receivables so Scott.
Hum.
That's the one area that we.
We took also Uh huh.
Okay.
Portion.
Yeah.
Helena.
Yeah, Yeah, correct, Alex Yeah actually the.
I'll bet you know expenses included many one time call vision.
For the other assets are Justin mentioned by Alex related to our two properties and well also as well as one patent impediments for.
The alcohol or charges for alcohol and the urban related because on Asia. Thank you and no one small Alex do you may have.
Improve your voice a little bit higher so that's otherwise would have heat we cannot hear you very clearly thank you.
Okay. Thanks very much.
Well the two months sharing how much of the.
Franchisee loans impairment were incurred in the first half so that we know how much wood.
Roughly be covered for wood in the second half.
Yeah.
Okay. So.
We believe that we have about 18%.
Of our loan receivables.
And then we don't expect any major impairments.
For the second half of the year.
For the loan receivables so assuming again, please correct me.
I'm, bringing my fun, it's a lot closer so are you able to Jeremy at this time clearly.
Yes, very clear yeah very very.
It's Greg here.
Okay wonderful thanks.
Thank you very much.
And Thats all my questions. Thank you.
Yeah.
Yeah.
The next question comes from Bruce Me of UBS. Please go ahead.
Yeah.
Oh, okay. Thanks, Alexei understanding that so I have a general question on the sector overall.
So given that China has lifted.
Significantly lifted the COVID-19 restrictions.
Check what's your expectations.
The the travel demand and the franchisees.
But we're early days in 2023.
Because I do worry about them.
Travelers may may have concerns of their house and so they may in the short term there may be a winning lead to travel.
And how long will it take for the franchisees to be willing to rig Westbury hotel sectors. Okay. Thank you.
Okay. So selina I'll pick up this question. Okay. So again remind me if I'm.
Speaking to low our mouthwash too low okay. So.
Thanks, Bruce for your question.
By the way it's great question, because we are all looking at the numbers.
For this immediate immediate holiday season, such as the new year and Chinese new year.
And we have detect that pattern right immediately right after the lift.
Of the.
0.2 restrictions.
Although our pod pick up and recover very quickly.
To exceed it.
Level of 'twenty to 'twenty one.
And then you know with a wave of <unk>.
The COVID-19 infections that.
Even though we experienced a lot among that.
Even though our own.
Staff and our guests.
We see our industry I think at least the trough in the face of more cautious.
To travel during this period of time, so we see a drop and you saw that in I think in slide eight.
Forgot one page you see a drop.
Drop in the occupancy and Rob Paul.
And.
I think with the.
With a wave off.
At this time.
Fisher recovery, we'll see the first the two to three miles I believes it should be up and down the regions certain region will recover better.
During this holiday season for usage.
Like high na and on holiday destination area.
We will see.
Big improvement or the product over the same period of last year.
But this is sort of related travel staffing of year end activities for them.
For the businesses.
<unk> will be probably more impacted during this.
During the season.
But we do expect I think whilst this wave passed.
Everything we hope will resume to normal.
And.
We are our immediate focus is also to improve the health of our staff and our cask, we're trying to implement.
A very strict.
Sanitation programs.
And to also.
We improve.
The house of employees, so that all making sure we're able to.
Uh huh.
So that people know our guests during this travel season.
We also have implemented.
Program.
Our own travel.
This holiday season.
Yes.
So we we we think that the different parts will be impacted differently, but after when the spring comes we expect that everything will be back to.
Similar to the pre bend.
Hopefully to recover to close to pre pandemic level okay.
In terms of our franchise franchisees investment.
So we see a.
The increase of confidence.
Although the side, we all have a difficult. The next two to three months I think that both of them.
Our own staff planning and also.
In terms of.
Occupancy side is it going to be challenging but we.
We all are confident and hopeful that Dan.
This is a short period I think that with.
With this time wave all five cases that we experienced.
Fee.
The long term.
Im confident self employed.
Our franchisees are still.
You went there. So we are the second folks out of our company is working even harder with our franchisees with all wash.
Hotel employees.
Two.
Two.
Deal with this new this new challenge.
Okay Thats very helpful.
Okay.
A boost to that.
We do.
Because the reservation times.
In this time period.
Is it going to be short term in the short term. So people probably are not able to plan the holiday travel.
The time, because they have to see the areas.
The impact.
And so and.
So we looked at the numbers I think it towards the.
Two weeks from now we see then the reservation number should even Bachelor fan.
The year off last year in 'twenty to 'twenty, one, but we cannot at this moment detached could see weather.
Fish oil continue depend.
Depending on the rest of the C. T shirt, the rest of the countries how.
The cases have been managed.
But I think that that no matter, how we looked at that this can be a short term phenomenon.
And that this will not be probably to a long term aspect of the Chinese new policy.
We have a different I think a more prudent policy to deal with this.
This COVID-19.
So are we.
We do see.
Both of the franchisee side on the hotel and the restaurant side I think the confidence level.
Much much better.
In the past.
Once again, thank you.
To ask a question. Please press Star then one.
This concludes our question and answer session I would like to turn the conference back over to Selina Yang for any closing remarks.
Thank you operator in closing on behalf of the entire Greentree management team. We thank you for your interest and participation in today's call.
If you require any further information or have passed to read for US Please feel free to contact us.
I'll close our prepared remarks, thank you.
Thank you everyone.
Yes.
The conference has now concluded thank you Gary and attending today's presentation.
Now disconnect.
Okay.
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