Q1 2025 H World Group Ltd Earnings Call
Only mode. After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on one on your telephone you will then hear an automated message advising Johan is raised to withdraw your question. Please press star one on one again, please be advised that.
Today's conference is being recorded I would now like to hand, the conference over to your speaker today, Jason Chan head of IR. Please go ahead.
Operator: With that, we are ready to take your questions. Operator, please open the line for Q&A. Thank you.
Thank you.
Speaker Change: And good evening, everyone. Thanks for joining us today welcome to Etch What group 2025 first quarter earnings conference call. Joining us today is our chairman Mr. Chi Chi our CEO, Mr. Jean Cui, our CFO, Ms Ching Wei and always see Us August Kochi home.
Operator: As a reminder to ask a question you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 and 1 again.
Candice Zhang: Our first question comes from the line of Candice Zhang from Bank of America. Please go ahead, your line is open.
Following their prepared remarks management will be available to answer your questions. Before we continue. Please note that the discussion today will include forward looking statements made under the safe Harbor provision of the United States Private Securities Litigation Reform Act of 1995.
Ronald Leung: Good evening, I am Ronald Leung from Bank of America. I have two questions. My first question is about Rothpard. I would like to ask, what is your expectation of the second quarter and the entire year of 2025 for Rothpard?
Speaker Change: Forward looking statements involve inherent risks and uncertainties.
Speaker Change: As such our results may be materially different from the views expressed today.
Ronald Leung: This is the first question. The second question I would like to ask is about business travel. Since this year, we have seen that business travel is still under some pressure due to the technology of the last year. Can you share with us why business travel is relatively weak?
Speaker Change: Of potential risks and uncertainties are outlined in our public filings with the SEC.
Speaker Change: <unk> group does not undertake any obligations to update any forward looking statements except as required.
Speaker Change: The applicable laws on the call today, we will also mention adjusted financial measures during the discussion of our performance reconciliation of those measures to comparable GAAP information can be found in our earnings release that was distributed earlier today.
Ronald Leung: Let me translate my questions into English. I have two questions. My first question is about RAFPA expectations. So what is management latest expectations on RAFPA for 2Q25 and also full year 2025?
Speaker Change: As a reminder, this conference call is being recorded the webcast of this conference call as well as supplementary slide presentation is available at IR Dot etch, what dot com with that now I will hand over the call to our CEO, Mr. Jim <unk> to discuss our business performance in the first quarter of 2025, Mr. Jing. Please.
Ronald Leung: This is my first question. My second question is about the business travel. So the business travel has been under pressure even though off an easy base last year. Could management share with us any specific weakness behind, any specific reasons behind the weakness?
Speaker Change: Yeah.
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Hui Jin: Thank you very much.
Speaker Change: D G to EOG.
Speaker Change: Hello, everyone. Thanks for joining <unk> first quarter of 2025 earnings conference call. So as you know was a franchise element to it and this is an issue of quanta.
Hui Jin: 好的,我先回答一下,然后请我们CF部门... Sponsored ADR Sponsored ADR Sponsored ADR We are working hard to implement the regulations and growth of our RELPA, but it is true that China-US tariffs have affected small and medium-sized enterprises and export-oriented enterprises. There is uncertainty.
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Hui Jin: Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR Okay, that's the first question. The second question is about the business world. Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR I think this year's business trip is mainly a matter of supply, not a demand-driven challenge. I am also concerned about the impact of the Chinese government on many small and medium-sized enterprises and private enterprises.
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Speaker Change: First of all I'd like to share some of our observations on the industry during the quarter.
Speaker Change: The first quarter, we saw the overall travel demand was still resilient and grow steadily. According to the data released by railway and airline industries. However, revpar remained under some pressure, especially on ADR. We believe it was largely due to the overall supply surge last year. Therefore, our revpar declined by three.
Hui Jin: Sponsored ADR Sponsored ADR So, let me do the translation for you. So, in terms of the first question regarding to the REF PAR, so, as we mentioned in our prepared remarks, so basically the tariff issue happened in April at some of the uncertainties and the volatilities for the overall market outlook. But again, overall, year-to-date, we still see the demand is growing steadily. But, you know, the business, of course, because of the tariff, well, under some kind of the pressures, but we are trying very hard to navigate the difficulties and trying to, you know, increase our REF PAR to a more stabilized level.
Speaker Change: 9% year over year with ADR decreased by two 6% year over year and occupancy rate declined slightly by one percentage points. The slight decline in occupancy rate was mainly because those hotels newly opened in the last several quarters, we're still ramping up.
Speaker Change: Entering into the second quarter, the tariff issues starting from April brought some uncertainty as to the market outlook.
Speaker Change: Also we saw some temporary solution on tariff issues recently, we remain cautious on potential future volatility and uncertainties. However on the leisure traveling front, we are still relatively optimistic as we saw the overall issue targeting demand in welding. This remains strong for instance, we saw both number of travelers.
Speaker Change: The total spending grow mid to high single digit year over year for Chinese new year Holiday Shaming Festival holiday and the Labor day holidays more importantly, according to third party data the industry Revpar recorded a positive year over year growth during the labor day holiday. Therefore, we have been developing differentiated strategies.
Hui Jin: However, on the leisure traveling demand side, from various data, you know, as we observed over a year to date, so we think the leisure traveling demand is still being very strong and is still growing very steadily as the people's willingness to do traveling is still very strong. So, in terms of the number, in terms of the REF PAR for the second quarter, we think the REF PAR will decline at low single digit but narrowed on a sequential basis. And for the full year, again, because of the And in terms of the second questions on the business traveling, we don't think it is the demand issue.
Speaker Change: Our product and service offering with targeted sales and marketing program to better capture the rising leisure demand, especially those emerging travelers such as silver haired tourists and inbound tourists.
Speaker Change: Also we are still facing some uncertainties and challenges we will insist on implementing our core strategy with long term focus with that I will share with you more data on our operational performance during the quarter to <unk> this year.
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Hui Jin: It is more like the supply issues as, you know, over the last two years, there was a lot of, you know, supply increase, which adds a lot of pressures to the real estate, especially on the ADR. However, you know, we try to leverage more on our corporate customers and B2B business to overcome some of the uncertainties and a shortage of the demand from the individual.
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Speaker Change: Please turn to page four in the first quarter of 2025, we opened 695 hotels and close to 155 of hotels, respectively pipeline was 2865 hotels by Coty and the slight quarter over quarter decline is mainly due to foster new hotels opening in a proactive pipeline.
Hui Jin: Thank you for your attention.
Hui Jin: Thank you.
Operator: We'll now move on to our next question.
Speaker Change: <unk> to improve quality, the new signings in the quarter remains stable and healthy.
Lydia Ling: Our next question comes from the line of Lydia Ling from Citi. Please go ahead, your line is open. Hello everyone, I am Lydia from Huazhi Group. Thank you for giving me the opportunity to ask questions. I have two questions to ask. One is about DH. We have seen some progress in the first quarter. So I would like to ask, in the next few quarters, including this year, what specific progress plans are there on DH's financial asset strategy? And then to improve our overall DH's profitability. We have also seen some lease-and-own franchises. Are there any plans to move more hotels to DH?
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Jeff: Three questions. Please.
Jeff: Please turn to page five the propulsion of upper Midscale and above hotels increased meaningful our pipeline by the end of first quarter and it was mainly due to the faster new signings of our upper mid hotels as well as the different different length of construction period and timing of new hotel openings. However in.
Lydia Ling: This is my first question about DH.
Lydia Ling: The second question is about the overall competitive structure of the industry. As mentioned earlier, the industry faces some pressure from the supply side. What does the management team think about the current competitive structure of the market in some service hotels, including the supply side of the industry? We have also seen that the hotel management in the pipeline is lagging behind. What is the main reason? And what is the current opening situation at the door?
Jeff: Terms of the hotels in Operation Limited service segment hotels remains our core market.
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Lydia Ling: Let me translate. Hi, management. I have two questions. The first one is on the DH side. And so we saw some progression on SLI strategy in the first quarter. So what's your further plan on the DH strategy to further improve the profitability? And, for example, how many lease-and-own hotels do you plan to transfer to franchises looking ahead?
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Jeff: And yet as I mentioned earlier, we maintained our strong growth momentum in the upper mid scale segment. Please turn to page six as of the first quarter. The number of upper mid scale hotels in operation increased by 36% year over year to 933, and the pipeline grew by 22.
Lydia Ling: And my second question is more on the industry supply. And so how do you evaluate the competition landscape currently in the limited service? We see some pipeline sequential decline in the first quarter. So what's the reason? And how is the franchise sentiment on the opening so far? Thank you.
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Jihong He: Okay, let me take the first question about the DH. So, to improve the profitability of a DH, legacy DH. for us today.
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Jeff: Over the past several years, we have been seeing a clear trend that customers are seeking high quality products and services with good value for money. Therefore, we have been continuously upgrading products in our core brands to better meet our customers' evolving demands. Please turn to page seven the propulsion of newer products and our.
Jihong He: There are several discussions currently in the pipeline and we will disclose as when it comes through. Other than an asset-light transaction, we are also further looking into reducing our overhead costs, restructuring our business, streamlining our processes. Sponsored ADR We are confident that with the second and third quarter coming, our profitability, especially … will increase.
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Speaker Change: <unk> full gas slowdown utterly chin sandbaggers sugar totally be seen as an impediment in terms of original expansion our penetration into lower tier cities continued progressing please turn to page eight as the end of first quarter of 2025, 54% of the Companys hotels.
Speaker Change: In pipeline were located in tier three and below cities 11 percentage points higher than the propulsion and operating hotels. Additionally by the first quarter. We are now covering 1394 cities and countries 100 for more than a year ago.
Hui Jin: I will answer the second question about the company car. Huazhu Group actually... Sponsored ADR Sponsored ADR China is going through a pacifist experience this year But at the same time, I want to express a few points of view. Sponsored ADR Sponsored ADR Sponsored ADR In the past few years, we have seen a steady decline in the cost of housing rentals. So the biggest fixed cost for us, Jiamen Group, is that the housing rentals have always been affected by the macroeconomic situation.
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Speaker Change: Membership program and direct sales capability at the most critical aspects for our business to achieve long term sustainable development. Please turn to page nine at the end of first quarter of 2025, our member base further increased to nearly $280 million.
Speaker Change: <unk> generated through the central reservation system accounted for 65, 1%, representing an increase of five four percentage points year over year.
Speaker Change: Is that just the Hudson were already on the AEP through the year, which is one of the things in semi ocean enrollment.
Hui Jin: This is the first point. In terms of operating costs, it involves manpower costs, marketing costs, and supply chain costs.
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Speaker Change: All above concludes the first quarter of 2025 operational updates for legacy module now I will hand over the call to our CFO misfortune.
Hui Jin: In these aspects, Huazhu has always been an industry Sponsored ADR Sponsored ADR Sponsored ADR To answer your second question in terms of the demand-supply dynamic for the industry, as you may notice, I know a lot of people are concerned about our REF PAR decline or the REF PAR pressure because of the oversupply or the supply surge over the past several years. But let me share with you, Edgeworld has been doing what we call the reform of the overall supply side, reform of the supply side of the China laundry industry. And we have been building several capabilities to ensure that our franchisees do achieve a pretty good return in terms of the opening of the hotels.
Speaker Change: An update on <unk>. Thank you.
Speaker Change: Thank you clay.
Speaker Change: Please turn to page 10, first quarter 2025, Revpar Aframax Eth improved to 12, 7% to 65 65 Euro with ADR improved two 8% and occupancy increase of five three percentage points.
Speaker Change: This increase of Revpar is a mixture of different end markets, we have seen particularly strong performance in North Africa and middle East.
Please turn to page 11.
Speaker Change: In first quarter 2025, we did have several transactions to change the leased hotel contracts to franchise contracts. Therefore, our managed and franchised hotel increased to 46%. This is a significant improvement compared to 38% in the first quarter 2000.
Speaker Change: 94.
Speaker Change: The percentage of asset light hotels in our pipeline is 57% in first quarter 2025.
Speaker Change: Which is also an improvement compared to the same period last year.
Speaker Change: With this I conclude the discussion about legacy D H and at what time to CFO, Mr. Chen from <unk>.
Hui Jin: First of all, from the franchisee document front, there are several key costs. One is the fixed cost. As you may see that over the past several years, the biggest fixed cost is the rental cost, which has been gradually declining over the past several years. And another key cost of running a hotel is the OPEX. So the OPEX is the combination of the label cost, sales and marketing cost, as well as the supply cost. However, you know, H1 has been putting a lot of efforts to improve the efficiency, operational efficiency and achieve the lowest cost and trying to be leading in the overall industry.
Speaker Change: Financial performance.
Speaker Change: Yes.
Speaker Change: Thank you Jerome good evening and good morning, everyone.
Speaker Change: Walk us through our financial review for the first quarter of <unk>.
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Speaker Change: Please turn to page 13.
Speaker Change: We continue and expanding our hotel network.
Speaker Change: Remember our loans increased 10% year over year.
Speaker Change: Our one time on one meeting at the end of the quarter.
Speaker Change: Oh in the first quarter grew 14% year over year.
Speaker Change: Revenue grew steadily in the quarter.
Speaker Change: Please turn to page 14.
Hui Jin: And by leveraging our very strong capability of supply chain management, you know, our, you know, loyalty program or membership program as well as the technology capability.
Speaker Change: Our revenue increased to opine.
Speaker Change: Philips and year over year to MB five one for bidding in.
Speaker Change: With our guidance.
Hui Jin: So in conclusion, what I can share with you now is, you know, the overall sentiment has been quite stable and healthy for our existing franchisees. Thank you.
Speaker Change: Revenue from legacy agile.
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Speaker Change: <unk> revenue decreased 11, 3% year over year, mainly due to that transformation of tenant leased hotels.
Dan Chee: Next question, please. Thank you. Our next question comes from the line of Dan Chee from Morgan Stanley. Please go ahead, your line is open. Thank you for giving me this opportunity to ask questions. I have two questions here. One is about DH, and the other is about domestic business.
Speaker Change: The franchised hotels.
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Dan Chee: I will ask about DH first, and then I will ask more detailed questions about what Lydia just mentioned. After the first phase of the cost optimization project last year, how much cost optimization is there this year? Can we say that the sales management fee fell by 11% this time, which is a relatively common cost situation after no one-time costs? Another question is that after the cost optimization project, the loss of EBITDA from the 66 million loss last year has increased to 77 million. In fact, the cost of hotel operations seems to have increased. Can you tell us where it has increased?
Speaker Change: Driven by our strong network expansion.
Speaker Change: Without our revenue contribution from our asset light model further enlarge it at 246% for the growth and the 55% for the legacy of collateral as shown on page 15.
Speaker Change: Moving into cost and expense side.
Speaker Change: Our total operating cost.
Speaker Change: And SG&A expenses.
Speaker Change: We have managed during the quarter.
Speaker Change: Please turn to page 15 in the first quarter hotel operating costs.
Speaker Change: Only grew by one 1% year over year.
Speaker Change: Slower than our revenue growth.
Speaker Change: Our continued asset light transformation.
Speaker Change: Although SG&A expenses decreased one 8% year over year.
Speaker Change: Yeah are reduced by four 6%.
Speaker Change: Year over year, excluding SBS.
Speaker Change: SBC.
Speaker Change: Benefiting from 11, 1% and well yeah.
Speaker Change: G&A expenses decreased from Nexium exit DH is that its out of restructuring and the cost optimization that in a second half after yet.
Dan Chee: After the cost savings in SG&A, together with the 11 asset-heavy hotel changing to asset-light, adjusted EBITDA loss still widened a little bit by 11 million RMB. What's the main reason for such hotel operating cost increase?
Speaker Change: Our growth in adjusted EBITDA.
Speaker Change: Five 3% year over year.
Speaker Change: RMB, one five bidding in the fourth quarter.
Speaker Change: Of which.
Speaker Change: Let's say wireless adjusted EBITDA increased five 8% year over year to RMB, one 6 billion.
Dan Chee: Next question, I would like to ask about the management level in China. We saw a drop of 3.9% in the first quarter, but a drop of 8.3% in the same period. There are four points of difference. We also saw four points of difference in the fourth quarter last year, but the difference is greater than in the previous quarters. What is the main reason for the difference? What is the reason for the gap widening? Thank you Dan.
Speaker Change: Moving to our cash flow and liquidity position on page 17.
Speaker Change: In the first quarter, we generated RMB 580 meeting operating cash flow.
Speaker Change: After the quarter end.
Speaker Change: <unk> ahead.
Speaker Change: <unk> 11, 8 billion cash and cash equivalent.
Speaker Change: <unk> started a cash net cash position of RMB six 5 billion.
Speaker Change: Lastly, turning to page 18 on guidance.
Speaker Change: For the second quarter of <unk>.
Speaker Change: We expect our revenue to grow 1% to 5%.
Speaker Change: Add it to the same quarter last year.
Speaker Change: The 3% to 7% excluding.
Speaker Change: Excluding DH <unk>.
Speaker Change: <unk> franchise revenue is expected to grow in that range of 18% to attend <unk>, 2% compared to the same quarter last year.
Hui Chen: Let me take the first question about the EDGE. So the restructuring is still ongoing. Last year, we announced 30% Reduction of Overhead. Sponsored ADR Still needs to be reflected gradually in our culture. Sponsored ADR from the last. Sponsored ADR so that we can continue our effort in streaming. So, to your question about whether the numbers and SG&A are clean as of now, I would say not completely yet, and we will see some of the effects coming through the But we are very sure that with this kind of measures, you know, this will only improve our sGNA in the mid and long term.
Speaker Change: With that we are ready to take your questions.
Speaker Change: Operator, please open the line for Q&A.
Speaker Change: As a reminder to ask a question you will need to press star one on one on your telephone and wait for your name to be announced.
Speaker Change: To your question. Please press star one and one again.
Speaker Change: Our first question comes from the line of Kennedys Shang from Bank of America. Please go ahead. Your line is open.
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Hui Chen: Please do not look at only quarter-to-quarter results. We will reflect the whole year when we come to almost the end of our restructuring effort mid-2020. And to your second question about the first quarter loss, so this is actually a very special event in the first quarter that caused this higher loss on the paper. We gave up Davos as a lease hotel, and we turned it into a franchise. And you know that Davos is a very, very... Sponsored ADR Actually, the whole year of EBITDA focused on this one week of FN and conference. So, that's why the first quarter...
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Speaker Change: Two questions.
Speaker Change: My first question is about Ralph how expectations. So what is management latest expectations on <unk> five and also full year two to five this is my first question.
Speaker Change: My second question is about the business travel business travel has been under pressure, even though off easy base last year could management share with us any specific weakness behind any specific reasons behind the weakness. Thank you very much.
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Hui Chen: It's very much skewed by this one-time event. So this year, taking out the divorce event, actually, our EBITDA is comparable to last year, even with the continued. Restructuring What I wanted to say with this answer to... is that we are very conscious of our EBITDA. Commitment and we are very conscious also in streaming line, our unnecessary overhead cost. You know, please bear with us in a short term. You know, we will still see some of the variation in the SG&A and some of the other costs as well. But we are very sure that in the mid and long term we are on.
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Hui Jin: Hello, everyone. Let me answer your second question. Why is our copper-plated Rare Part weaker than our copper-plated Rare Part? This is because our Huazhu Group's upgrade of product structures and continuous upgrading of products have helped our Group's overall performance better than the copper-plated Rare Part. This is also the reason why we have been constantly upgrading our products, eliminating the old and cleaning up the old, Sponsored ADR Sponsored ADR To answer your second question, regarding to the gap between the blended Revpa and the like-for-like Revpa, so you are right, the like-for-like Revpa was underperforming compared to the blended Revpa.
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Hui Jin: There were two reasons behind. One is because of the product, because we keep upgrading, as we mentioned earlier, we continuously upgraded our products and continuously do clearance of those older versions of products in order to improve the overall product quality. So that's one of the reasons why there was a gap or enlarged the gap between the blended Revpa and the like-for-like Revpa. And secondly, in certain areas, because of the surge of the supply over the several years, indeed, there was some of the pressure on the Revpa in both ADR and occupancy rate. But we have already noticed that and we are doing a lot of optimization in terms of our revenue management to set up a more rational ADR and occupancy rate in these particular regions.
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Speaker Change: So let me do the translation for you. So in terms of the first question anything being in regarding to the Revpar.
Speaker Change: So as.
Speaker Change: As we mentioned in our prepared remarks, so basically the tariff issue it happened in a pro at some of the uncertainties and volatilities for the overall market outlook.
But again overall year to date, we still see the demand is growing steadily.
Speaker Change: But you know.
Speaker Change: The business of course because of the tariff.
Speaker Change: And there's some kind of the precious but we are trying very hard to navigate the difficulties in the 'twenty two.
Hui Jin: Thank you.
Speaker Change: Increased our revpar to a more stabilized level.
Speaker Change: However, on the leisure traveling demand side.
Simon Cheung: Our next question comes from the line of Simon Cheung from Goldman Sachs. Please go ahead, your line is open. Hey, thank you for sharing. I have two questions. The first question is, I saw that your first quarter of this year, you started your business at a pretty fast pace, about 700 stores. Last year, you increased by about 20% compared to last year, but I remember your annual direct sales were still 2,300 stores, which is a little bit lower than last year. I want to know if there was any time or timing issue in the first quarter.
By Roche data you know as we observed a year to date. So we've seen studies are probably demand still being very.
Speaker Change: Strong and still growing very steadily.
Speaker Change: People's willingness to travel.
Speaker Change: Traveling is still very strong so in terms of the number or in terms of the revpar for the second quarter.
Speaker Change: We think that Revpar will decline at a low single digit, but narrowed on a sequential basis and for the full year again because of the uncertainties out there some of the Volatilities and also two sets of hat, we will try our best to achieve our full year guidance.
Simon Cheung: Also, is there any chance that your annual sales will be too low, with only 2,300 stores?
Speaker Change: And in terms of the second question is on the business traveling.
Simon Cheung: This is the first question. The second question is, I saw that you did very well in the past year or two, and now you have about 1,000 stores. I remember Yaduo shared with us that he now has about 1,500 stores and has set up in about 2,000 cities, and has not yet entered a new field or a new city. I would like to ask you, how many cities are there in 1,000 stores now, and what are your thoughts on future growth?
Speaker Change: We don't think it is a demand issue. It is more like the supply is U S.
Speaker Change: Over the last two years there was a lot of you know supply increase without a lot of pressure to the revpar, especially on the ADR.
Speaker Change: However, you know we try to leverage more.
Speaker Change: All of our corporate customers and B to B business to overcome some of the uncertainties and the shortage of the demand from the individual traveling thank.
Speaker Change: Thank you.
Speaker Change: Good morning.
Speaker Change: Keith will now move on to our next question.
Simon Cheung: Let me translate that into English. So, the first question is in relation to the hotel opening. We noticed that your hotel opening was actually quite fast in the first quarter, almost 700, and that compared to full-year 2,300, that was actually tracking ahead of the momentum last year, just checking to see whether there's any timing issue here and whether there's going to be some upside risk to the full-year 2,300 hotel additional guidance. And then the second question is in relation to the meet-up scale hotel, whereby I think H2O has done a great job in terms of adding the hotel almost 1,000 by now.
Speaker Change: Our next question comes from the line of Lithia Ling from Citi. Please go ahead. Your line is open.
Oh go ahead <unk>.
Speaker Change: Thank you I'd now like today on that will then J P. J, yes, EBIT nausea by ADH, Nathan I'll, maybe turn Daiichi Doyle.
Speaker Change: Equal to 18 now Michelle Linn.
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Speaker Change: At the edge that Keith I think this is Jenny as John Neale ECS, you might see today you didn't.
Speaker Change: Yes, taking that equal Dupont might have hoped.
Speaker Change: John Mckenzie the ph D. He thought you mean oh.
Speaker Change: Uh-huh depend on Egypt.
Speaker Change: Yes.
Simon Cheung: I think Artur did mention that out of the 1,500 hotels, they are only exposed to 200 cities and have no intention to go into other new cities.
Speaker Change: Oh that dealt with franchise Matthews at Ohio Mill, what you can do that you know again, just you've got labor.
Speaker Change: Thank you.
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Simon Cheung: Just wondering the strategy for H2O and where would they see growth going forward?
Speaker Change: <unk> was on pace to dollar tissue.
Hui Jin: Thank you. I will answer this question. I am from Qingdao. First of all, I am very happy to see that we have recorded a very good start of the year. Sponsored ADR Sponsored ADR Sponsored ADR We are looking forward to the scale, and at the same time, we emphasize that every store we open is a good place to make money. Sponsored ADR So I'm very happy to see we achieved a quite good number of hotel new openings in the first quarter. As one of the key strategies, we are looking for a high-quality scale growth. And we hope every newly opened hotel can be profitable.
Glenda: Thank you Glenda good day.
Speaker Change: Hi, Bonnie thank him attacks within that didn't go she campaign.
Speaker Change: Tien tsin.
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Amit: Thank you Amit just what is that telling them to ash meeting.
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Glenda: Yes.
Speaker Change: Hi management I have two questions. The first one is on the Dx side and so we saw some progression on S ally strategy in the first quarter. So what's the plan on that.
Speaker Change: Our strategy to further improve the profitability and for example, how many like Dr. Nathan <unk> hotels, you plan to transfer to.
Speaker Change: Franchise looking ahead and then my second question is more on the industry.
Speaker Change: Supply and if so how you evaluate the.
Speaker Change: Competition landscape currently in limited.
Hui Jin: And therefore, in terms of the new opening, the quality of the hotel is much more important than purely scale growth. So everyone has heard about our vision for the future. Sponsored ADR Starting this year, we will focus on brand management and manufacturing. Sponsored ADR We are not only looking for to achieve a leading position in terms of the market share But also trying to achieve a leading position for each of the brands in different segments So that's we are looking for in the longer term to both achieve in terms of the skill in terms of you know The number one or the leading in the market share, but also, you know in each of different segments we want to be you know, top one or two at least for the Although our opening and our current contract are very good, but at the moment we don't want to Although we are seeing pretty good in terms of new openings and new signings, but we want to stay at the conservative, not changing the full year opening target.
Speaker Change: Service and adult all and we see something like that pipeline a sequential decline in that first quarter as to what the reason and how is the same high school gentlemen on opening.
Speaker Change: Yeah.
Speaker Change: Okay. Let me take the first question is about about it at the edge.
Speaker Change: To improve the profitability of a D. H legacy ph business is of course, our priority I'm. You know there are different measures and different strategies and asset light transaction is one of the part that we can reduce the negative impact. So we will continue to.
Speaker Change: We're very happy that we were.
Speaker Change: We finished the their transaction of 10 hotels in the first quarter.
We will continue to look for opportunities. There are several discussions currently in the pipeline and we will disclose them you know and.
Speaker Change: When it comes true.
Speaker Change: I didn't know at that time I said like the transaction. We are also looking for that looking into reducing our overhead cost.
Speaker Change: Restructuring our business streamline our processes.
Speaker Change: So first quarter you see a negative EBITDA contribution. This is because we continued our restructuring effort and first quarter is traditionally a very weak first quarter as well and so we're confident that with the time, especially with the second quarter coming.
Hui Jin: I am also very happy about the Chinese version. Sponsored ADR Sponsored ADR We have been putting a lot of effort since last year to break through the upper mid-segment and I'm very happy to see that you are looking in detail in terms of our upper mid-segment development over the last several quarters. We do see a lot of, you know, market opportunity, especially, you know, to reform those traditional upper-mid-scale sectors. Sponsored ADR At the current state, we would like to focus only on Tier 1 and Tier 2 cities, especially those prime areas, to establish stronger brands.
Speaker Change: I like our profitability, especially that adjusted EBITDA will increase over the time.
Speaker Change: So we're left with our shipyard and then to your point of view quantitatively.
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Speaker Change: So this all goes to your question.
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Speaker Change: Mm 100 yamauchi, that's in good shape on this.
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Hui Jin: Sponsored ADR Sponsored ADR The demand actually is very concentrated in the Tier 1, Tier 2 cities, especially for those upper mid-segment hotels. Therefore, in those particular areas and cities, we would like to take the most prime location to establish a brand. From the perspective of China Airlines, we are very satisfied with China Airlines' Huazhu Group Ltd. In a longer-term perspective, we are very confident to, you know, chase the leading company right now or even surpass them.
Yeah about somebody who had according to them but.
Speaker Change: And what kind of onto the timberland acquisition.
Speaker Change: So you will mcdonalds on the SEDAR.
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Speaker Change: It is how are you Jim.
Speaker Change: Well I'm going to show these results and then three theaters.
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Operator: Thank you.
Sijie Lin: Next question, please. Thank you. Our next question comes from the line of Sijie Lin from CICC. Please go ahead, your line is open. Thank you, Management Team. I'd like to ask about the mid-to-high-end. As I mentioned earlier, the demand for commodities is lower than the demand for resources. But why is the mid-to-high-end, which has higher demand for commodities, performing better in both REFPAR and PIPELINE? One reason is that the mid-to-high-end PIPELINE is more cost-effective. As we mentioned earlier, the chip is faster. In addition, the copper-coated REFPAR is more competitive than the mid-to-high-end PIPELINE. So we talked about the mid-to-high-end plan.
Speaker Change: So.
Speaker Change: So and critique idea on them attending the union children. She's also the quad to Fuji Shang Guang G&A mean tumor cells, where you really can do.
Speaker Change: Told it see it.
Speaker Change: I think that you're right that in good gentlemen.
Speaker Change: If you do that kind of I suppose if we don't think of it you see the illegal right.
Speaker Change: Okay. So.
Speaker Change: To answer your second question is in terms of the amount of supply dynamic for the industry. So as you may notice that.
Speaker Change: No.
Speaker Change: A lot of people are concerned about our revpar decline or the revpar pressure because of the oversupply or the supply surge over the several past several years, but let me share with you.
Speaker Change: <unk> has been doing whether it be called the reform of the off road.
Sijie Lin: How do we look at the market situation of the mid-to-high-end? And how do we improve the competitiveness? So this year, we see relative bigger pressure on business demand compared with leisure demand. But meanwhile, why is it that the upper-mid-scale segment performs better on both REFPAR and PIPELINE? Because first, our upper-mid-scale PIPELINE stays flat quarter over quarter. Second, the same-store REFPAR of mid-scale and above segments also perform a bit better than economy segments. I don't know if this is correct. I'm trying to understand the reason behind this. And what is our view towards the upper-mid-scale market conditions?
Lifesize reform of the supply side on the China luxury industry.
Speaker Change: And.
Speaker Change: That's you know we have computing several capabilities to ensure that our franchisees do achieved a pretty good return.
Speaker Change: In terms of the opening of the hotels are first of all you know from the franchisees 19 months front.
Speaker Change: There are several key cost.
Speaker Change: One is the fixed cost as you may see that over the past several years.
Speaker Change: Is the fixed cost is the rental cost with just us being a gradually declining over the past several years and are another key cost of running a hotel is the opex. So the opex is the combination of the label.
Sijie Lin: And how do we strengthen our competitiveness in these segments? Thank you.
Hui Jin: Let me answer this question again. This confirms what I said earlier, that China's mid-to-high-end car industry is in dire straits. Huazhu Group, through the past few years, has built up its product capabilities in China. Copyright Ard Equipment Ltd. Sponsored ADR Sponsored ADR Sponsored ADR As I mentioned earlier, we see plenty of opportunity to reform the existing very traditional upper-middle-scale segment. Therefore, we have been putting a lot of efforts in terms of the products and the service offering as well as, you know, the sales and target sales and marketing, especially for those upper-middle segments, to establish our overall capability to do the breakthrough in this particular segment.
Speaker Change: Labor cost.
Speaker Change: Marketing cost as well as you know the supply supplies cost.
Speaker Change: However, you know that's why that's been putting a lot of efforts to improve the efficiency operational efficiency and achieved the lowest cost and are trying to be leading in the in the overall industry and by leveraging on our very strong capability of our supply chain management our.
Speaker Change: Loyalty program or our membership program as well as Oh, sorry, as well as the <unk>.
Speaker Change: Technology capability. So in conclusion, what I can share with you now is you know the overall sentiment has been quite stable and healthy for our existing franchisees.
Speaker Change: Thank you our next question please.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Our next question comes from the line of Dan <unk> from Morgan Stanley. Please go ahead. Your line is open.
Speaker Change: CCA Glenn is under way to go.
Hui Jin: Sponsored ADR Sponsored ADR Leveraging our good product design to improve our product power, as well as leveraging our very strong membership program and to accumulate a lot of repeated customers for our upper mid-segment products. Therefore, to increase the recognitions and the acceptance of the products by the customers. We are looking forward to more investors coming to our mid-to-upper segment to meet the expectations of the mid-to-upper segment market. We have continued to improve our membership experience in the mid-to-upper segment. These are all very important factors for the growth of our mid-to-upper segment performance. We have been keep upgrading and optimizing, you know, the membership, especially for the uppermost segment.
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Speaker Change: EBITDA.
Jake: Please Jake.
Speaker Change: Okay.
Speaker Change: <unk> and Luciano about why questions. He sits in the <unk>, but I wanted to tell you man Joe again unique.
Speaker Change: Okay.
Speaker Change: This is something that should be fun.
Speaker Change: Mike. Thank you management for the opportunity. My question. My first question is about the H after restructuring program in second half 'twenty 'twenty four SG&A costs of DH declined 11% year on year.
Hui Jin: And we hope, you know, you can have a look going forward and you will see the progress. Thank you.
Jui Liu: Next question. Thank you. Our next question comes from the line of Jui Liu from CiticX. Please go ahead, your line is open. Hello, Management. I have a question about the mid-to-high-end. From this point of view, the brand reputation of Chengji Hotel is quite good.
Speaker Change: Do you any one off restructuring costs embedded in this quarter and going forward.
Speaker Change: I assume this quarter's SG&A is clean and normalized.
Speaker Change: After the cost savings in SG&A.
Speaker Change: With the 11.
Speaker Change: So heavy hotel changing to asset light.
Speaker Change: Adjusted EBITDA loss do widen a little bit by 11 million RMB.
Speaker Change: The main reason for such a hotel operating cost increase.
Jui Liu: So I would like to ask the management to share more details about Chengji Hotel's project, including the single-chamber model, this year's or five-year plan for the opening goal. Let me translate my question. Hi, Management. The in-the-city brand has received strong consumer reputation.
Speaker Change:
Speaker Change: Where should I go with yellow, what's the other one just wondering J P. F chang's <unk> tend to see it.
Speaker Change: Tom Pyle, well, so all the best.
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The revpar being up in Japan.
Speaker Change: The Magellan Tapia Youll, Cynthia young opinions as to dws at Kendall you'll.
Jui Liu: Can Management share some more insights regarding the franchise profile, single-store model, and store opening target plans for this year or the next five years? Thank you.
Speaker Change: So the idea that you should be a opinion, Jim as you could see to see core dollar that just took a topnotch LTE when he's out there.
Speaker Change: The top quartile of that shortage, we all CECO somebody other venue.
Hui Jin: Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR License Placement But I am particularly happy to tell everyone that Chengji has opened a batch of landmark flagship stores in many key E-commerce cities. This will have a great impact on the future development of the brand's food and energy infrastructure and future development. Sponsored ADR So in terms of the intercity brand, actually the growth momentum started from last year. And intercity brand actually redefined the overall upper-middle-scale segment, and it's kind of a combination with Chinese as well as the Western design.
Speaker Change: Let me translate my second question is.
Speaker Change: It's about legacy Bob.
Speaker Change: Blended revpar.
Speaker Change: Three 9% year on year in Q1, but like for like.
Speaker Change: Declined eight 3% year on year, the gap was full percentage point.
Speaker Change: Fourth quarter 24 vessels saw four percentage point gap.
Speaker Change: This wider than the previous quarters, what's the reason for the gap widening thank you.
Dan: Thank you Dan.
Speaker Change: Let me take the first question about at the edge.
Speaker Change: So and the restructuring is still ongoing last year, we announced a 30% reduction of overhead cost in one go and did that kind of a cost effect.
Speaker Change: Steel still needs to be reflected gradually in our cost you know this year quarter by quarter because of some of the restructuring effort I'm I'm not completely done yet even from the last year's restructuring.
Speaker Change: <unk> measures.
Speaker Change: And this year we continue.
Speaker Change: Some of the not that this kind of 30% in one month, but we still identify possibilities in different departments and different processes. So that we can continue our effort in streaming line.
So and to your question about whether the numbers and SG&A are clean as of now I would say not completely yet.
Hui Jin: And I'm happy to see that probably by the end of 2025, we can have around 100 intercity hotels in operation. And more importantly, we have been seeing that there's a lot of intercity hotel has been located in very important key areas and cities, which we call flagship hotels in very prime locations, that will bring a longer term benefits to for the brand. Huazhu is a multi-brand company in China. Sponsored ADR Sponsored ADR Sponsored ADR Sponsored ADR For the entire uppermost scale segment, we actually used a multi-brand strategy. Apart from the InterCity, we still have Crystal Hotel, as well as Mercure and Novotel, for example.
Speaker Change: And we will see some of the effects coming through this year, but it will very sure that with these kind of measures. You know this will only improve our eastern U S. G&A, Inc. In the meeting on time so.
Speaker Change: So please do not look at the only really quarter to quarter results.
Speaker Change: We were reflected the whole year, you know when when when we come to almost the end of our restructuring effort I'm you know mid this year.
Speaker Change: And then to your second question about the first quarter loss.
Speaker Change: So and there is this actually a very special and event in the first quarter that caused that this.
Speaker Change: Higher loss on the paper.
Speaker Change: We gave up Davos as I said hotel for us as a leased hotel and we've Tony that you know franchise hotel and you know that the taboos system very very.
Speaker Change: Even though our event actually the whole year of that'd be that focus on these one week of EF and conference effort. So and that's why the first quarter results is very much skewed by this one time event every year. So this year taking out at the time.
Operator: So the key strategy is definitely the multi-brand strategy, but with core brand focus. And I think for those foreign brands within our portfolio, such as Mercure and Novotel, are going to benefit from a rising inbound tourist in the future. Thank you. Next question. Thank you.
Speaker Change: This event actually Oh, Oh, IP that is comparable to last year, even with the continued restructuring effort, which I wanted to see you know we just answer to you is that we are very conscious of our epic EBITDA mm mm commitment.
Speaker Change: And we are very conscious so so in streaming line unnecessary overhead cost him you know please bear with us in a short 10, you know we will see some of them are off the variation is in SG&A and some of the other costs as well, but we are very sure.
Jason Chen: There are no further questions at this time so I'll hand the call back to Jason for closing remarks.
Jason Chen: Okay, thank you everyone for taking your time with us today and we look forward to see you in the upcoming quarter. Thank you and bye bye.
Speaker Change: That didnt meet that long time, we are on a better way.
Yeah.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change: Thanks.
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Speaker Change: The more she choose I couldnt get as an industry.
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Speaker Change: How long are they each are in short on time and be able to see that.
Speaker Change: Okay to answer your second question regarding to the gap between the blended revpar and the like for like Revpar. So you are right. So the like for like Revpar was underperforming.
Speaker Change: On the performing compared to the blended Revpar. There were two reasons behind why is because of the you know the product.
Speaker Change:
Speaker Change: Because we keep upgrading as we mentioned earlier, we upgraded continuously upgraded our products and are continuously do clearance of those all the virtual toward that in order to improve the overall product quality. So that's the one of the reason why there was a gap or enlarge the gap between the blended revpar on a like for like.
Speaker Change: Revpar and secondly, you.
Speaker Change: You know in certain area because of the search of the supply over the several years indeed.
Speaker Change: Indeed, there were some of the pressure on the RF PA.
Speaker Change: In both ADR and occupancy rates are but you know we have already noticed that and we are doing a lot of the optimization in terms of our you.
Speaker Change: You know our revenue management to set up a more rational ADR and occupancy in these particular regions. Thank you.
Speaker Change: Next question please.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Simon Cheung from Goldman Sachs. Please go ahead. Your line is open.
Simon Cheung: Hey, Glenn.
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Tom: Tom If you can tell me.
Tom: It seems like you can go to Ethan again EMEA without guy.
Tom: Hello.
Tom: How we lay that inbound.
Tom: That does sound passes at me out.
Tom: Let me translate that into.
Tom: Great. So the first question is in relation to the hotel opening.
Tom: We look at it is that your hotel opening where were actually quite fast in the first quarter almost 700.
Tom: And thats compared to full year 2300, <unk> of 2300 <unk>.
Tom: That was actually tracking ahead of our.
Tom: The momentum last year, just checking to see whether there's any timing issue here and thats, whether theyre going to be some upside risk to the full year 2003 hundred hotel additional.
Tom: Our guidance and then the second question is in relation to the meat upscale hotel.
Tom: I think <unk> has done a great job in terms of adding the hotel almost one thousands by now.
Artur: I think Artur did mentioned that all of the 135 and Joe.
Tom: Hotel there.
Tom: They are only exposed to 200 <unk> have no intention to go into other new cities, just wondering the strategy for <unk> and where would they see growth going forward.
Tom: Yeah.
Tom: Yeah.
Tom: All up without doing switching quick.
Tom: Gotcha.
Tom: You too.
Tom: So you kind of hard to tell you this was.
Tom: Changes to the assembly with Hitachi.
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Tom: Couldn't changzhou normal Kevin makes it here.
Tom: Zinc in a heartbeat.
Tom: We do a P&C legend she needs are and then Muslims on people to groom.
Tom: <unk> you can do it.
Tom: So I'm very happy to see we achieved quite good number of hotel openings in the first quarter.
Tom: Well one of the key strategies, we are looking for a high quality scale gross and we hope every newly opened hotel can be profitable and that therefore, you know in terms of the new openings.
Tom: Alrighty off the hotel as much important.
Tom: Purity scale gross.
Tom: Tino who'll woman dual entity shall I too soon.
Tom: Sure.
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Tom: Pinpoint.
Tom: Virginia in high school mandates and painting suits are.
Tom: Maybe this is hard and good totally immune to Samsung pay element that quanta can do with it once we do we'll miss you upped the accrual nordson medical scientists results when he was who used to shippers.
Tom: We are not only looking for them to achieve a leading position in terms of the market share, but also trying to achieve a leading position for each of the brands in different segments. So that's we are looking for in the longer term to those achieved in terms of the scale in terms of the number one or the leading market share.
Tom: But also you know in each of different segments, we want to be you know top one or two at least for the.
Tom: Brent.
Speaker Change: And Acadia.
Tom: So you don't see it on the mature hotel in Brazil.
Tom: The total AUM in the switching of the pay them. Although we are seeing a pretty good things for themselves and you opened near the new signings, but we want to stay at the conservative and not changing the full year opening target for now.
Tom: Some other yeah.
So you seem to be good.
Tom: So that added some other odds with some of the uncertainty of the ones who are the switches being private so their input.
Tom: <unk> toll treating has lots of Wilsonville town center and EDA tool.
Tom: We have been putting a lot of efforts last year since last year or two breakthrough with the outcome of these segments and I'm very happy to see that.
Tom: Looking in details in terms of where you go up in my second month settlement developments over the last several quarters.
Tom: Oh boy that's fun.
Todd: Jordan. This is Todd eloquently said this to you.
Todd: We do see a lot of you know market opportunity, especially you know to reform those traditional upper mid scale segment. She knew that a woman can she won't they choose yes.
Speaker Change: And should the Guangzhou Cushing Woods <unk>.
Todd: <unk>.
Todd: At the current stage, we would like to focus only on tier one tier two cities, especially those prime area.
Todd: Two is probably a stronger brand early your U S modernization usual uses to Georgia unions and since we <unk>.
Todd: See the Susana <unk> cultural sons, who assist Hondo, Cindy do when I joke, sometimes with.
Todd: The demand actually is very concentrated in the tier one tier two city assist especially for those up in the segment.
Todd: Therefore in those particular areas in the cities, we want to take the most a prime location to establish a breath. So is it one or the other Ccs Vega and told them in Tysons.
Todd: In a longer term perspective, we are very confident to.
Todd: Chase, the leading company right now or even surpass them.
Todd: Thank you.
Speaker Change: Next question please.
Todd: Thank you.
Todd: Yeah.
Speaker Change: Our next question comes from the line of C. J Lynch from C. ICC. Please go ahead. Your line is open.
Speaker Change: Hello. This is everybody's Hollywood charges. So that's really what it is how quickly do you think this will go down.
Speaker Change: Hey, you should hit all its interesting as I always do.
Speaker Change: So to answer your telco I'm, saying I said, Oh, that's Jewish in literature.
Speaker Change: Do you, sometimes you can call the telephone call done a couple of bunch of Revpar Hershey pipelines I'm Gonna Black rock type that go far beyond simple how is it I know you guys have kind of jumbo pipeline, how should one be shooting them Oh, okay sure.
Speaker Change: Jason Kenney, Michigan, only why not just use a pilot this year she told us Sean how shall we think is unique.
Speaker Change: So you've got going on that I saw that you thought you could someone other than I can see why no. One was in Macau and she was one of our negotiation with Lansing.
Speaker Change: Mr Something Philadelphia, only because it seems to me that you signed up.
Speaker Change: So so so this year, we see relative a bigger pressure on business demand from here with leisure demand, but Meanwhile, why do you think that's all permits go segment performed better on both Revpar and pipeline.
Speaker Change: Because the first hour upscale.
Speaker Change: Upper Midscale pipeline stay flat quarter over quarter second the same store revpar of Midscale and above took advantage also pro forma is bad for the economy segment.
Speaker Change: Don This is correct and trying to understand reason behind this and what is our view towards the upper midscale market conditions, and how we strengthen our competitiveness in this segment. Thank you.
Speaker Change: But with us.
Speaker Change: If at all.
Speaker Change: <unk> came in at a hot she says or that's more than the Zipcar fleet Huntsville cheaply.
Speaker Change: Part of the tool.
Speaker Change: That's more than the timing them either docs or.
Speaker Change: Pune, India that's all.
Speaker Change: <unk> seen some of our children any thoughts all transactions and so pushing so hard to assist them.
Speaker Change: Lee the accordion.
Speaker Change: With the seasonal nature, which L parcel that's another some minutes with Peru Assortments. He gave you an email.
Speaker Change: As I mentioned earlier, we see plenty of opportunity to reform the existing very traditional upper Midscale segment, a tearful we have been putting a lot of efforts in terms of the products and service offering as well as you know the sales are targeted sales and marketing, especially for those upper mass segments.
Speaker Change: To establish our overall capability to do the breakthrough in this particular settlement for Windows 10 teams.
Speaker Change: Okay.
Speaker Change: So I'm attending the call.
Speaker Change: Absolutely yeah.
Speaker Change: So.
Speaker Change: Well done.
Speaker Change: So that's the hope.
Speaker Change: In the Haynesville.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Leveraging all work with product design to improve our.
Speaker Change: Product power as well as leveraging on our very strong membership program and accumulate a lot of repeated customers for our upper upper upper mid segment products and therefore.
Speaker Change: <unk> increased our recognition and acceptance of our products by the customers that didn't go to the table.
Speaker Change: What does that do them.
Speaker Change: Yeah.
Speaker Change: So there's a lot of us is obviously to do that.
Speaker Change: They're going to do this she got her blends with performance.
Speaker Change: Yeah.
Speaker Change: So here it goes.
Speaker Change: Syndrome.
Speaker Change: Sure.
Speaker Change: We have been upgrading and optimizing the membership, especially for the up in the segment and we hope you know you can have a look going forward and you will see the progress.
Speaker Change: Thank you.
Speaker Change: Next question please.
Speaker Change: Thank you.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Julie Li from Citi can you. Just go ahead. Your line is open.
Speaker Change: Alright.
Speaker Change: Thank you, Chris Allen Theater Julien.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: So is that true.
Speaker Change: Hi, this is all vertical.
Speaker Change: Holiday based on.
Speaker Change: Davidson.
Speaker Change: Okay.
Speaker Change: So local Italian with your local it sounds good yeah.
Speaker Change: Anything at all due to that long term I didn't build the group we are going to.
Speaker Change: So there you go.
Speaker Change: Oh, thank you.
Speaker Change: Hi management in the <unk> brand has received strong consumer reputation.
Charlotte: Management is Charlotte.
Charlotte: More insight regarding the franchise profile single store model.
Speaker Change: <unk> targeted.
Speaker Change: Our next five years.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: I think those are the ones who are simply.
Speaker Change: <unk> and Novartis are sort of the Chilean peso.
Speaker Change: And you can go to go to a lot of things.
Speaker Change: Total rewards Walton.
Speaker Change: Sure.
Speaker Change: Oh man if I may.
Speaker Change: The C suite and that's good.
Speaker Change: All lines with political and policy agenda this year.
Speaker Change: Sure she triangle it somewhat later than to Cook, who the shoulder months.
Speaker Change: C.
Speaker Change: Excuse me hooks into the cochlea are.
Speaker Change: Eliminates anyway.
Speaker Change: Daniel.
Speaker Change: G N genius only O.
Speaker Change: And then this year.
Speaker Change: Tablets have what you baked yet so this is a year that's.
Speaker Change: That's what what could be causing that causes that jets and he'd say couldn't do in the U N C U E.
Speaker Change: <unk> India.
Speaker Change: <unk> I will.
Speaker Change: This did you go with it but to enjoy it.
Speaker Change: So would you freeze on shoulder.
Speaker Change: Isn't it.
Speaker Change:
Speaker Change: So in terms of the intercity grants you know actually the gross momentum started from last year and the interest it depends actually redefine the overall upper Midscale segment, and it kind of a combination with Chinese as well as the Western design and you know you know survey.
Speaker Change: Just to provide a more suitable product and service to the Chinese customers and I'm happy to see that probably by the end of 2025, we can't have Iran.
Speaker Change: 100.
Speaker Change: Inter city hotels are in operation.
Speaker Change: More importantly, we have been seeing that you know I'm curious a lot of you know intercity hotel has being located in a very important key areas in our cities, which are we call flagship hotels being a very prime locations that.
Speaker Change: That will bring our longer term benefits to for the brand establishment.
Speaker Change: The quadriceps modern sitting on top of medicine.
Speaker Change: It's volatile.
Speaker Change: I have four wireless switching.
Amit: GE on Ohio, Amit you North Dakota, this year fees on Chinese GDP.
Speaker Change: The others are the elements of the <unk> team.
Speaker Change: So reshaping that you're talking about Benoit, yes.
Speaker Change: So it's a lot of coordination so they use it to LNG.
Speaker Change: It's <unk>.
Speaker Change: Uh huh.
Speaker Change: More than half creates and you can do the routine Korea you'd be a little more can do or what you can tell me Chi.
Speaker Change: No because as she is so low that.
Speaker Change: It means that even if you said that you see the thought there.
Speaker Change: She's had that's all of it.
Speaker Change: Photo Intel or upper mid scale segment, we actually use the multi brand strategy apart from the intercity used to have a crystal hotel as well as Mercury and the Novotel for example, so the key strategy is definitely in the multi brand strategy, but we you know core brands for Chris.
Speaker Change: And I think for those you know foreign brands within our portfolio, such as Mercury and the novotel going to benefit from a rising inbound tourists in.
Speaker Change: In the future.
Speaker Change: Thank you.
Speaker Change: Next question please.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time, so I'll hand, the call back to Jason for closing remarks.
Speaker Change: Okay. Thank.
Jason: Thank you everyone for taking your time with us today, and we look forward to upcoming quarter. Thank you and bye bye.
Jason: This concludes today's conference call. Thank you for participating you may now disconnect.