Atour Lifestyle Holdings Limited Q3 FY2025 earnings call

• Hotel business: In the third quarter, RevPAR was RMB 371.3, 97.8% of the same period in 2024; OCC nearly recovered to prior year level at 99.9% of the same period in 2024, ADR reached 98.1% of the same period in 2024. Mature hotels in operation for more than eight months had RevPAR 95% of the same period in 2024, OCC 98.5% and ADR 96.6% of the same period in 2024. Opened 152 new hotels in the third quarter, total operating hotels reached 1,948 by end of third quarter, with a pipeline of 754 under development. ATURE 3.6 opened 19 hotels, Atour 4.0 hotels in operation for more than three months had RevPAR over RMB 500, Saka Hotel had robust performance with RevPAR exceeding RMB 900, ATURE Lite's RevPAR of Series three hotels in operation surpassed year-ago levels.
• Retail business: GMV in third quarter was RMB 994 million, up 75.5% year over year. Online channels contributed over 90% of total GMV. Atour Planet performed well in Double Eleven, led in pillow category on major platforms, launched new products like DeepSleep Thermal Regulating Comforter Pro 2.0, released Atour Planet Deep Sleep Standard.
• Membership and channel: Registered individual members exceeded 108 million by end of third quarter, year-over-year growth over 30%. Core CRS channel accounted for 62.4% of total room nights sold in third quarter, contribution of room nights sold to corporate members was 20% during the quarter.
• Focus areas: Continue to deepen focus on user, employee, and fundamental capabilities. Adhere to user-first philosophy, pay close attention to employees' growth, leverage digital solutions and granular operations management to drive efficiency and customer experience upgrade.

For the hotel business, net revenues in 2025 grew by 38.4% year over year and 6.5% quarter over quarter to RMB 2,628 million. Revenues from monetized hotels in 2025 were RMB 1,560 million, up 32.3% year over year and 20.1% quarter over quarter. Revenues from leased hotels in 2025 were RMB 164 million, a decrease of 13.4% year over year but an increase of 9.7% quarter over quarter. For the retail business, revenues in 2025 were RMB 846 million, reflecting a 76.4% year-over-year increase but a 12.3% quarter-over-quarter decline. Retail GMV in the third quarter reached RMB 994 million, a 75.5% year-over-year increase, with online channels contributing over 90% of total GMV.

• Full-year 2025 net revenues expected to increase by 35% compared with 2024. - Retail revenue growth outlook raised to at least 65% year on year and adjusted group's full-year revenue guidance to a growth of 35% year on year. - Declared second cash dividend for 2025 totaling approximately USD 50 million. - Confident of achieving full-year guidance of 500 new hotel openings and reaching 2,000 premier hotels by end of 2025. - Formally commenced share repurchase program in September and will continue to execute according to three-year plan.

• Macro environment volatility, industry hotspots shifting rapidly and uneven recovery across regions. - Intensifying competition in the retail business.

Q: Could the management share the RevPAR trend since October? And also, if it's possible, can you provide your outlook for RevPAR in the fourth quarter and also potentially next year?

A: Since the beginning of this year, RevPAR has shown a trend of progressive improvement on a year-over-year basis. During the National Day holiday, leisure travel demand remained robust but market had structural divergence. Driven by stronger ADR, RevPAR achieved year-on-year growth. After the holiday, market returned to business-dominated environment, but benefiting from active exhibitions and business travel activities, demand in core cities demonstrated strong resilience. Expect pressure from year-on-year decline in RevPAR to further ease in the fourth quarter. Looking ahead, market will continue to show divergence, with still some challenges and uncertainties remaining.

Q: Could you please share more about the recent new hotel signing trends and whether there are any changes to the full-year hotel opening and closure targets?

A: In recent years, we maintain strategic focus on premier hotels, concentrate on core locations for expansion, strictly control quality. New hotel signings this year are generally in line with last year. Opened 152 hotels in the third quarter. Have full confidence in achieving the full-year guidance of 500 new openings and reaching our strategic target of 2,000 premier hotels by the end of this year. Expect approximately 80 closures entirely for this year.

Q: Could the management share your perspective on the competition in the retail business? In addition, given the consistent performance of the retail business, would you consider any adjustments to your full-year retail revenue guidance?

A: Since Atour Planet entered the sleep industry, there has been a rise in imitators and fierce competition. However, we focus on user needs and have launched the Atour Planet Deep Sleep Standard. Based upon our strong performance in Q3 and the Double Eleven, we are now raising our full-year retail revenue growth outlook to at least 65% year on year and accordingly adjust the group's full-year revenue guidance to a growth of 35% year on year.

Q: Could management provide an update on the planning and progress regarding shareholder returns?

A: Our second dividend distribution this year amounts to approximately USD 50 million. We formally commenced our share repurchase program in September and will continue to execute them in accordance with our established three-year plan. Will continue to implement our comprehensive shareholder return program, combining dividends and repurchases, targeting a payout ratio of 100% based upon the previous fiscal year's GAAP net income.

Q: Could you share your plan for Atour Lite in the next step? And any plan for accelerating the store expansion?

A: In the third quarter, the RevPAR of operating Atour Lite Series three hotels surpassed the level from the same period last year. We will systematically build a dedicated operational system for Atour Lite, strengthening its differentiated positioning. Expect the scale of Atour Lite Series three hotels in operation will be reaching 170 to 180 by the end of this year and steadily advance towards hitting the 1,000 hotels milestone for the Atour Lite brand in the long term.