H World Group Ltd (HTHT) 2024 Q3 法說會逐字稿

Good day and thank you for standing by. Welcome to H World third-quarter 2024 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加 H World 2024 年第三季財報電話會議。（操作員指示）請注意，今天的會議正在錄製中。

It is now my pleasure to hand you over to the Senior IR Director of the company, Mr. Jason Chen. Please go ahead.

現在我很高興將您交給公司高級投資者關係總監 Jason Chen 先生。請繼續。

Thank you, Amber. Good morning, and good evening, everyone. Thanks for joining us today. Welcome to H World Group 2024 third-quarter earnings conference call. Joining us today is our Chairman, Mr. Ji Qi; our CEO, Mr. Jin Hui; our CFO, Ms. Chen Hui; and our CSO, Ms. He Jihong. Following their prepared remarks, management will be available to answer your questions.

謝謝你，琥珀。大家早安，晚上好。感謝您今天加入我們。歡迎參加H World Group 2024年第三季財報電話會議。今天加入我們的是我們的主席季奇先生；我們的執行長金輝先生；我們的財務長陳慧女士；以及我們的 CSO 何繼紅女士。在他們準備好發言後，管理層將可以回答您的問題。

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. Forward-looking statements involve inherent risks and uncertainties. As such, our results may be materially different from the views expressed today. A number of potential risks and uncertainties are outlined in our public filings with the SEC. H World Group does not undertake any obligation to update any forward-looking statements, except as required under applicable laws.

在我們繼續之前，請注意，今天的討論將包括根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。因此，我們的結果可能與今天表達的觀點有重大差異。我們向美國證券交易委員會提交的公開文件中概述了許多潛在的風險和不確定性。除適用法律要求外，H World Group 不承擔更新任何前瞻性聲明的義務。

On the call today, we will also mention adjusted financial measures during the discussion of our performance. Reconciliations of those measures to comparable GAAP information can be found in our earnings release that was distributed yesterday. 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.hworld.com. With that, now I will hand over the call to our CEO, Mr.

在今天的電話會議上，我們還將在討論我們的業績時提及調整後的財務措施。這些指標與可比較公認會計準則資訊的調節可以在我們昨天發布的收益報告中找到。謹此提醒，本次電話會議正在錄音中。本次電話會議的網路廣播以及補充投影片簡報可在 ir.hworld.com 上觀看。現在我將把電話交給我們的首席執行官，先生。

Jin Hui, to discuss our business performance in the third quarter of 2024. Mr. Jin, please?

金輝先生，討論我們2024年第三季的經營績效。金先生，請問嗎？

(interpreted) Hello, everyone. Thanks for joining H World Group's third-quarter 2024 earnings conference call.

（譯）大家好。感謝您參加 H World Group 2024 年第三季財報電話會議。

In the third quarter of 2024, the domestic travel demand continued to demonstrate steady growth. The hotel industry saw some year-over-year pullback in RevPAR from high base ADR last year. In addition, Shanghai and its surrounding regions experienced the two typhoons right before and after the mid-autumn holidays, which affected travel demand in September.

2024年第三季度，國內旅遊需求持續呈現穩定成長。飯店業的 RevPAR 較去年的高基數 ADR 有所回落。此外，中秋假期前後，上海及週邊地區經歷了兩次颱風，影響了9月的旅遊需求。

On top of this, in the quarter, we proactively adjusted our operational strategies, especially on optimization of our sales channels, which I will elaborate later. This proactive adjustment caused some negative impacts on the quarter's performance. However, it is strategically crucial to ensure the healthy sustainable growth of the company in the long term.

除此之外，本季我們也主動調整了營運策略，特別是銷售管道的最佳化，我稍後會詳細說明。這種主動調整對本季的業績造成了一些負面影響。然而，確保公司長期健康永續發展具有策略意義。

Please turn to page 3, on Legacy-Huazhu's operational performance in the third quarter. In the third quarter, Legacy-Huazhu's RevPAR decreased 8.1% year-over-year to RMB256 of which ADR was down 7% year-over-year to RMB301 from high base last year. Despite our rapid hotel network expansion, our occupancy rate still maintained at a healthy 84.9% declined only marginally by 1 percentage point.

請翻至第3頁，了解力獅華住第三季的經營績效。第三季度，力獅華住的RevPAR年減8.1%至人民幣256元，其中ADR較去年高基數年減7%至人民幣301元。儘管我們的飯店網路擴張迅速，但入住率仍維持在 84.9% 的健康水平，僅小幅下降 1 個百分點。

Please turn to page 4. In the third quarter, we continued our accelerated network expansion in China, and the number of hotel openings reached a record high of 774 hotels in the quarter. At the same time, we uphold our philosophy of high-quality growth putting quality ahead of pure quantity increase and continuously raise the standard of our hotel. In the third quarter, we closed 217 hotels excluding the low-quality soft economy brand and HanTing 1.0 version, we closed 123 hotels. Going forward, we will continue sorting out our existing hotel and phasing out low-quality ones to ensure further enhancements of the product and the service quality of our overall hotel portfolio.

請翻到第4頁。第三季度，我們持續加速在中國的網路擴張，季度新開飯店數量達到774家，創歷史新高。同時，我們秉持高品質成長理念，以質勝量，不斷提升飯店水準。第三季度，我們關閉了217家飯店，除去低品質的軟經濟品牌和漢庭1.0版本，我們關閉了123家飯店。未來，我們將繼續清理現有酒店，淘汰低品質酒店，確保整體酒店產品和服務品質的進一步提升。

As of the end of third quarter, the number of hotels in the pipeline decreased slightly year-over-year and quarter-over-quarter to 2,899 mainly due to the rapid opening pace in the third quarter as well as the clean up some of the pipelines, given we continuously raise our quality standards for not only new open soft pipelines (inaudible) Our interest level and the new signings momentum remains strong. In fact, new signings in this quarter still exceeded 800 hotels. We continue focusing on economy and the middle scale segment for mass market penetration and development.

截至三季度末，在建酒店數量同比和環比略有下降，至 2,899 家，主要是由於第三季度開業速度較快以及清理了部分酒店。軟管道（聽不清楚）我們的興趣水平和新簽約勢頭仍然強勁。事實上，本季新簽約酒店仍超過800家。我們繼續專注於經濟和中型市場，以滲透和發展大眾市場。

Please turn to page 5. As of the end of third-quarter 2024, economy and middle scale hotels accounted for 91%, 80% and 90% of our hotels in operation, hotels in pipeline and hotel openings, respectively. We believe the mass market remains the largest and the most promising market in China, and it is also the foundation of our business. Going forward, we will consistently roll out high quality and good value for money limited-service hotels and products, expanding our coverage nationwide and solidify our leading position in the limited-service segment. We keep penetrating into the lower-tier cities.

請翻到第5頁。截至2024年第三季末，經濟型飯店和中型飯店分別佔營運飯店、籌建飯店和開幕飯店的91%、80%和90%。我們相信大眾市場仍然是中國最大、最具潛力的市場，也是我們業務的基礎。未來，我們將持續推出高品質、高性價比的有限服務飯店及產品，擴大覆蓋全國範圍，鞏固有限服務領域的領先地位。我們不斷向低線城市滲透。

Please turn to page 6. At the end of third-quarter 2024, around 42% of our hotels in operations were in Tier 3 and below cities, up 2 percentage points year-over-year. In the pipeline, hotels in Tier 3 and below cities accounted for 53%, 11 percentage points higher than that in operation.

請翻到第6頁。截至2024年第三季末，約42%的營運飯店位於三線及以下城市，較去年同期成長2個百分點。在建飯店中，三線及以下城市酒店佔比53%，較已營運飯店高11個百分點。

At the same time, as the new signings picked up in Southern China, along with our regional strategy and as our upper midscale segment grow, the proportion of pipeline hotels in Tier 1 cities increased 2 percentage points year-over-year. As of the end of third quarter, the number of cities we covered reached 1,324 (sic - see slide 6, "1,334"), around 117 more cities than a year ago. Our upper-mid segment development continued in the third quarter. Our key upper middle scale brands have been gaining recognition and attractions among customers and franchisees.

同時，隨著華南地區新簽約飯店的增加，加上我們的區域策略以及中高端市場的成長，一線城市在建飯店的比例比去年同期增加了2個百分點。截至第三季末，我們所涵蓋的城市數量達到 1,324 個（原文如此 - 參見投影片 6，「1,334」），比一年前增加了約 117 個城市。第三季我們的中高端市場持續發展。我們的主要中高端品牌已贏得客戶和特許經營商的認可和吸引力。

Please turn to page 7. As of the end of third-quarter 2024, the number of up-mid segments hotels in operation exceeded 800, up 33% year-over-year. And the number of hotels in pipeline reached 487, up 36% year-over-year. One of our core brands in that segment, Intercity, had 125 hotels in operation and in the pipeline. Recently, Crystal Orange, the co-brand for our upper mid segment launched its 2.5 version.

請翻到第7頁。截至2024年第三季末，營運中高階飯店數量超過800家，年增33%。籌建飯店數量達487家，年增36%。我們在該領域的核心品牌之一 Intercity 擁有 125 家正在營運和籌建的酒店。最近，我們中高端市場的聯合品牌Crystal Orange推出了2.5版本。

Please turn to page 8. Crystal Orange 2.5 version is an upper-midscale products that we designed and tailored for elite business travelers. The harmonious integration of lights and the colors, the usage of high-quality bedding facilities and the special crystal designed fragrance diffuser offers a comfortable relaxing and high-quality space for the busy business travelers working and living in the fast-paced metropolis. The hotel also has launched space with special corporate tile offerings, which is a public area that is suitable forecast either to enjoy their private time or to hang out with their friends.

請翻到第8頁。水晶橘2.5版是我們為菁英商旅人士量身打造的中高階產品。燈光與色彩的和諧融合，高品質的床品設施以及特殊水晶設計的香薰機，為在快節奏的大都市中工作和生活的商務旅客提供了一個舒適放鬆的高品質空間。酒店還推出了具有特殊企業瓷磚產品的空間，這是一個適合享受私人時間或與朋友閒逛的公共區域。

After several years of development, our upper-midscale segment is starting to bear some fruit in this year. However, we think there are still more polishing and improvements needed in areas such as branding, product, customer insights, customers' experiences and services and so on, especially under the background of our service excellence strategy stated since the beginning of the year. Therefore, we will continue working and improving, and we aim to become one of the leading brands in the upper-midscale segment in the near future.

經過幾年的發展，我們的中高端細分市場今年開始取得一些成果。但我們認為，在品牌、產品、客戶洞察、客戶體驗和服務等方面還需要更多的打磨和改進，特別是在我們年初以來提出的卓越服務策略的背景下。因此，我們將繼續努力和改進，我們的目標是在不久的將來成為中高端市場的領導品牌之一。

Please turn to page 9. Affected by the macro economy, the recovery of China's overall business travel demand is still relatively stagnant. To offset the impact from some missing demand from individual business travelers and to maintain a relatively stable occupancy rate during the low season of leisure travel, we have been improving our direct B2B capabilities.

請翻到第9頁。受宏觀經濟影響，我國整體商旅需求復甦仍較停滯。為了抵​​銷部分散客需求缺失的影響，並在休閒旅遊淡季維持相對穩定的入住率，我們一直在提升直接B2B能力。

In the third quarter of 2024, the number of room nights booked directly via our B2B platform exceeded 7.5 million, up 41% year-over-year and 19% quarter-over-quarter. The number of active corporate clients exceeded 4,500, up 45% year-over-year and a 23% quarter-over-quarter. We have always been emphasizing the importance of membership and direct sales.

2024年第三季度，透過B2B平台直接預訂的間夜數超過750萬間，較去年同期成長41%，較上季成長19%。活躍企業客戶數量超過4,500家，較去年成長45%，較上季成長23%。我們一直強調會員制和直銷的重要性。

Please turn to page 10. The membership base of our H Rewards continue increasing. As of the end of third quarter, H Reward had close to 260 million members. As we rapidly expand our hotel networks, entering into new regions and breaking through in some new segments, it will naturally take some time for us to accumulate new members and improve the direct sales contribution for those new hotels.

請翻到第10頁。我們的 H Rewards 會員數量持續增加。截至第三季末，H Reward擁有近2.6億會員。隨著我們酒店網路的快速擴張，進入新的地區，突破一些新的細分市場，我們自然需要一段時間來累積新會員，提高新酒店的直銷貢獻。

As a result, in the short term, we do need traffic support from other channels during the ramping up pace of the new hotels. Nevertheless, members and the direct sales remain the most important and the most sustainable sales channel for us. In the third quarter, we rolled out around our targeted optimization of our sales channel. We urged our hotel managers to improve their hotel level, customer acquisition and the sales capabilities, and we reemphasized the importance of membership and direct sales capability for the company's long-term sustainable growth. In the third quarter, our CRS contribution improved by 2.2 percentage points year-over-year and 4.3 percentage points quarter-over-quarter to 64.2%.

因此，短期內，我們在新酒店的加速推進過程中，確實需要其他通路的流量支援。儘管如此，會員和直銷仍然是我們最重要、最永續的銷售管道。第三季度，我們圍繞銷售管道進行了有針對性的最佳化。我們督促飯店管理者提升飯店水準、獲客能力和銷售能力，並再次強調會員和直銷能力對公司長期永續發展的重要性。第三季度，我們的CRS貢獻率年增2.2個百分點，季增4.3個百分點至64.2%。

All above conclude our third-quarter 2024 business updates for Legacy-Huazhu. Now I will hand over the call to our CSO, Ms. He Jihong, to give an update on Legacy-DH's business.

以上就是我們對力獅華住 2024 年第三季業務更新的總結。現在我將電話轉接給我們的CSO何繼紅女士，介紹Legacy-DH的最新業務狀況。

Thank you, Jin Hui. I'm happy to give everybody an overview on the overseas business by H World. Please turn to page 11. We are very happy to report that the blended ADR from DH increased 2.5% from EUR114 to EUR117 in the third-quarter 2024. With 0.8 percentage points increase in occupancy, RevPAR increased 3.7% from EUR79 to EUR82.

謝謝你，金輝。我很高興為大家介紹一下H World的海外業務。請翻到第11頁。我們非常高興地報告，2024 年第三季 DH 的混合 ADR 成長了 2.5%，從 114 歐元增至 117 歐元。隨著入住率增加 0.8 個百分點，每間可用客房收入 (RevPAR) 成長 3.7%，從 79 歐元增至 82 歐元。

Please turn to page 12. We restructured our economy brand and Zleep business in this quarter as well. We exited a joint venture with entrepreneur Peter Haaber and took over 100% ownership of the Zleep brand. As a part of the asset-light strategy, we exited 14 leased and owned hotels in Denmark. This transaction has a minimum impact on our financial statement.

請翻到第12頁。我們在本季也重組了經濟品牌和 Zleep 業務。我們退出了與企業家 Peter Haaber 的合資企業，並接管了 Zleep 品牌 100% 的所有權。作為輕資產策略的一部分，我們退出了丹麥的 14 家租賃和自有飯店。本次交易對我們的財務報表影響最小。

Please turn to page 13. In the third quarter, we also started a major restructuring effort in DH business. First of all, we streamlined the headquarters and reduced at least 30% of the headquarter nonoperational staff. We stepped up our efforts to reduce G&A non-personnel costs. We continued to scrutinize hotel performance and optimize the hotel operations.

請翻到第13頁。第三季度，我們也啟動了DH業務的重大重組工作。首先，我們對總部進行了精簡，減少了至少30%的總部非業務人員。我們加強降低一般管理費用非人員成​​本。我們持續審視酒店表現並優化酒店營運。

All these restructuring efforts incurred around RMB81 million one-off expense in this quarter. The negative impact on financial performance of Deutsche Hospitality in this quarter is largely due to this restructuring cost, which you will see later. We will start to observe full year savings in 2025, and we are confident that our overseas business is on a successful trajectory. With this, I conclude the overview of the International business. And hand over to our CFO, Chen Hui, for the financial performance review.

所有這些重組工作在本季度產生了約人民幣 8,100 萬元的一次性費用。德意志酒店集團本季財務業績受到的負面影響很大程度上是由於重組成本造成的，稍後您會看到。我們將在 2025 年開始觀察全年節省情況，我們相信我們的海外業務正走上成功的軌道。至此，我對國際業務的概況進行了總結。並交給我們的CFO陳輝進行財務績效審查。

Thank you, Jihong. Good morning, and good evening, everyone. Let me talk you through our operational and financial review for the third quarter of 2024.

謝謝你，季紅。大家早安，晚上好。讓我向您介紹我們 2024 年第三季的營運和財務回顧。

Please turn to page 15. Our hotel network continues to expand. The overall number of rooms increased 20% YoY to close to 1.1 million as of end Q3 this year compared with 886,000 rooms a year ago. Total turnover for the third quarter of 2024 was RMB26 billion, representing 11% YoY increase, of which Legacy-Huazhu's hotel turnover grew 11% YoY to RMB24 billion, and the Legacy base DH turnover grew 8% YoY to RMB2.1 billion.

請翻到第15頁。我們的酒店網絡不斷擴大。截至今年第三季末，客房總數年增 20%，接近 110 萬間，去年同期為 886,000 間。2024年第三季總營業額為人民幣260億元，年增11%，其中力獅華住酒店營業額年增11%至人民幣240億元，力獅基地DH營業額年增8%至人民幣21億元。

Page 16. In the third quarter of 2024, our hotel revenue for the group increased 2.4% YoY to RMB6.4 billion, in line with our guidance. Revenue from Legacy-Huazhu grew 1% YoY to RMB5.2 billion, of which revenue from Huazhu leased and our owned hotels decreased 10.4% due to the closure of leased hotels.

第 16 頁。2024 年第三季度，集團飯店營收年增 2.4% 至 64 億元，符合我們的指引。傳統華住的收入年增1%至人民幣52億元，其中華住租賃及自有酒店的收入因租賃酒店的關閉而下降10.4%。

We net closed 22 leased hotels in the quarter, and the number of leased and owned hotels decreased by 38 or 6.3% on a year-over-year basis. Revenue from Huazhu manachised and franchised grew 14.7% YoY driven primarily by our strong hotel opening but was negatively affected by the decline in RevPAR from the high base last year. Legacy-DH revenue rose 9% YoY to RMB1.3 billion, which was attributed to both business recovery and hotel network expansion.

本季我們淨關閉 22 家租賃飯店，租賃和自有飯店數量年減 38 家，即 6.3%。華住的管理和特許經營收入年增 14.7%，主要是由於我們的酒店開業強勁，但受到去年高基數的 RevPAR 下降的負面影響。Legacy-DH營收年增9%至人民幣13億元，得益於業務復甦和飯店網路擴張。

Please turn to page 17. We have been committed to grow and as a line model, expanding our hotel network using manachised and franchised hotels. As a result, revenue from our manachised and franchised hotels continue rising. In the third quarter of 2024, revenue contribution from manachised and franchised hotels reached 50% of our Legacy-Huazhu revenue, up from 44% a year ago. We expect this trend to continue as we become more and more asset light. We believe this will drive a gradual and continuous margin expansion as well as help us to become more resilient when navigating through economic cycles.

請翻到第17頁。我們一直致力於發展，並作為一個線路模型，利用管理和特許經營酒店擴大我們的酒店網絡。因此，我們的管理和特許經營酒店的收入持續增長。2024年第三季度，管理和特許經營飯店的營收貢獻達到傳統華住營收的50%，高於一年前的44%。隨著我們變得越來越輕資產，我們預計這一趨勢將持續下去。我們相信，這將推動利潤率逐步持續擴張，並幫助我們在經濟週期中變得更有彈性。

Please turn to page 18. Hotel operating costs were RMB3.8 billion in the third quarter of 2024, up 5% YoY. The increase was due to rising personnel costs from our continued hotel network expansion. Preopening costs remained at a low level as we continue moving towards the asset-light model and staying selective on opening leased and owned hotels.

請翻到第18頁。2024年第三季飯店營運成本為人民幣38億元，較去年同期成長5%。這一增長是由於我們持續的酒店網路擴張導致人員成本上升。隨著我們繼續轉向輕資產模式並選擇性地開設租賃和自有酒店，開業前成本仍保持在較低水平。

SG&A expense or RMB975 million in the third quarter of 2024, up 18% YoY, of which next quarters increased 9% YoY, and the Legacy-DH rose 42% YoY. The 8% YoY increase in Legacy-Huazhu's SG&A was mainly due to a high share-based compensation to attract and retain core employees who are key to our sustainable long-term business growth.

2024年第三季SG&A費用為人民幣9.75億元，年增18%，其中下一季年增9%，Legacy-DH年增42%。力獅華住的SG&A年增8%，主要是由於高額股權薪酬，以吸引和留住對我們可持續長期業務成長至關重要的核心員工。

Excluding share-based compensation, SG&A expense for Legacy-Huazhu increased 2.5% YoY. The 42% YoY increase in Legacy-DH SG&A was due primarily to RMB81 million one-off restructuring costs. Excluding the nonrecurring restructuring costs, SG&A expense for Legacy-DH increased 7% YoY. As a result, our income from operations in the quarter was RMB1.7 billion, which representing a 10% YoY decline but a 10% Q2 growth.

不計入股權激勵，力獅華住的SG&A費用年增2.5%。Legacy-DH SG&A 年成長 42%，主要是由於一次性重組成本 8,100 萬元。不包括非經常性重組成本，Legacy-DH 的銷售、管理和行政費用年增 7%。因此，本季我們的營運收入為人民幣 17 億元，年減 10%，但第二季成長 10%。

Please turn to page 19. For our profitability and the cash flow during the quarter. In the third quarter of 2024, our adjusted EBITDA decreased 9.5% YoY to RMB2.1 billion. By segment, Legacy-Huazhu's adjusted EBITDA was down 7.5% YoY to RMB2.1 billion due to the RevPAR decline from the high base last year and SG&A normalization.

請翻到第19頁。對於我們本季的獲利能力和現金流。2024年第三季度，調整後EBITDA年減9.5%至人民幣21億元。以業務分部來看，由於RevPAR較去年高基數下降以及SG&A正常化，力獅華住的調整後EBITDA年減7.5%至人民幣21億元。

Our DH business generalized -- generated RMB21 million adjusted EBITDA, which was down YoY due primarily to the nonrecurring restructuring costs mentioned previously. However, after this round of restructuring, we believe our DH business will be in leaner and its profitability should see some improvements -- improvement next year. In the quarter, our group generated RMB1.4 billion adjusted net income and RMB1.7 billion operating cash flow.

我們的DH業務全面發展－調整後EBITDA為人民幣2,100萬元，較去年同期下降主要是由於前面提到的非經常性重組成本。不過，經過這一輪重組，我們相信我們的DH業務將會更加精簡，盈利能力應該會有所改善——明年會有所改善。本季，集團調整後淨利為人民幣 14 億元，經營現金流為 17 億元。

Page 20 for our liquidity position. As of end of September 2024, the group had RMB9.3 billion cash, cash equivalent, restricted cash and time deposits and was in a solid net cash position of RMB4 billion, including time deposits. We also had RMB3.6 billion unutilized bank facilities as of end September. Next page, please.

第 20 頁顯示我們的流動性狀況。截至2024年9月底，集團擁有人民幣93億元現金、現金等價物、受限現金及定期存款，並擁有穩健的淨現金部位達人民幣40億元（包括定期存款）。截至 9 月底，我們還有 36 億元未使用的銀行融資。請下一頁。

As part of our total shareholder return plan, we continued buying back shares. As of September year-to-date, we have bought back roughly USD270 million worth of shares from the market. In the first nine months, we have returned around USD470 million to the shareholders through both dividend and share repurchase, which accounted for more than 80% of our free cash flow generated in the same period.

作為股東總回報計劃的一部分，我們繼續回購股票。截至今年 9 月份，我們已從市場回購了價值約 2.7 億美元的股票。今年前9個月，我們透過股利和股票回購等方式向股東返還約4.7億美元，占同期自由現金流的80%以上。

Lastly, page 22, on guidance. For the fourth quarter of 2024, apart from the ongoing RevPAR pressure, we will continue closing some leased and owned hotels as we are committed to our asset-light strategy. The closure of more leased and owned hotels will definitely bring some negative impact on our revenue in the quarter. Therefore, we expect our group revenue to grow between 1% to 5% compared to Q4 2023, and also 1% to 5%, if excluding DH, in the fourth quarter. With that, we are ready to take your questions.

最後，第 22 頁，關於指導。2024 年第四季度，除了持續的 RevPAR 壓力外，我們將繼續關閉一些租賃和自有酒店，因為我們致力於輕資產策略。更多租賃和自有酒店的關閉肯定會對我們本季的收入帶來一些負面影響。因此，我們預計與 2023 年第四季相比，我們的集團營收將成長 1% 至 5%，如果不包括 DH，第四季的營收也將成長 1% 至 5%。這樣，我們就準備好回答您的問題了。

Operator, please open the line for Q&A.

接線員，請開通問答線。

(Operator Instructions) We will now take our first question from the line of Ronald Leung from Bank of America.

（操作員指示）我們現在將回答來自美國銀行的 Ronald Leung 的第一個問題。

(interpreted) Let me translate the questions in English. My first question is about RevPAR. May I ask what -- how is the RevPAR trends in October and November? And what is your expectation for the RevPAR growth in 4Q? My second question is about the management of the membership system.

（口譯）讓我把問題翻譯成英文。我的第一個問題是關於 RevPAR。請問 10 月和 11 月的 RevPAR 趨勢如何？您對第四季 RevPAR 成長有何預期？我的第二個問題是關於會員制度的管理。

May I ask what is the company's strategy to enhance the membership's loyalty so as to increase the direct sales ratio?

請問公司有什麼策略可以提升會員忠誠度，進而提高直銷比例？

(interpreted) Okay. Let me answer your first question regarding to the RevPAR. So clearly, as you may see from the market. So this year, the business traveling activity remained a bit weak compared to the leisure and that caused a major ADR impact and the pressures for this year on a year-over-year basis as well as the high base from the last year. And also, we are seeing the up mid and upscale segment was underperforming and ADR has even higher pressures, which also going to have some of the pressures to our segment in terms of the ADR.

（解釋）好的。讓我回答您關於 RevPAR 的第一個問題。正如您從市場上看到的那樣，很明顯。因此，今年商務旅行活動相對於休閒活動仍然略顯疲軟，這對ADR產生了重大影響，對今年的同比壓力以及去年的高基數造成了影響。此外，我們看到中高檔細分市場表現不佳，ADR 面臨更大的壓力，這也將為我們的細分市場帶來一些 ADR 壓力。

However, on the positive side, we still see a pretty good demand for the overall traveling. And therefore, we still can mention a relatively healthy and high occupancy rates despite our fast pace of hotel network expansion. And therefore, we remain committed to ensure our high-quality growth strategy. And for the fourth quarter, according to our estimate, mainly due to the ADR pressure, the RevPAR for the fourth quarter will be around middle single-digit year-over-year decline. Thank you.

不過，從正面的一面來看，我們仍然看到整體出行的需求相當不錯。因此，儘管我們的飯店網路擴張速度很快，但我們仍然可以提到相對健康和較高的入住率。因此，我們仍然致力於確保高品質成長策略。而對於第四季度，根據我們的預測，主要是由於ADR壓力，第四季的RevPAR年減幅度將在中個位數左右。謝謝。

So in regarding to your second question about membership, so as we are penetrating into different regions as well as break through some of the new segment. So it takes some of the time to creating some of the synergy from our existing membership and the new regions and segment coverage from our membership program. And also, there's a lot of new demand from the leisure market as well. So we are doing -- we are putting a lot of efforts to enhance our membership program, to provide more variety in terms of the products due to different group of customers and to ensure the membership program further growth.

關於你關於會員資格的第二個問題，我們正在滲透到不同的地區並突破一些新的細分市場。因此，我們需要一些時間來從我們現有的會員資格以及我們的會員計劃的新區域和細分市場覆蓋範圍中創造一些協同效應。此外，休閒市場也產生了大量新需求。所以我們正在做——我們正在付出很大的努力來增強我們的會員計劃，根據不同的客戶群提供更多種類的產品，並確保會員計劃的進一步發展。

Okay. We are also working on improving the membership's benefits and ensure the lowest pricing through our direct sales channel and the membership program. And therefore, we can further improve the off-line membership conversion as well as improve the retention rates.

好的。我們也致力於改善會員福利，並透過我們的直銷管道和會員計畫確保最低的價格。因此，我們可以進一步提高線下會員轉換率並提高保留率。

We are also seeking some of cooperation with cross different segments such as working with the airline company such as Juneyao Airlines as well as the car-hailing companies, which is DiDi, to seeking more cooperation among different industries.

我們也尋求一些跨領域的合作，像是和吉祥航空這樣的航空公司以及滴滴這樣的叫車公司合作，尋求更多不同產業之間的合作。

We have been putting a lot of efforts over the last several years in terms of the B2B direct sales and the corporate customers. And we believe a stronger capability on the B2B direct sales and corporate customers will further help us to improve the membership program.

過去幾年我們在B2B直銷和企業客戶方面做了很多努力。我們相信，更強的B2B直銷和企業客戶能力將進一步幫助我們完善會員計畫。

Our next question comes from the line of Simon Cheung from Goldman Sachs.

我們的下一個問題來自高盛的 Simon Cheung。

(interpreted) So let me translate into English. So two questions. One, given the high base on the RevPAR this year, we have seen quite a weak performance in the last several quarters continuing into the fourth quarter. But looking into next year, what is your expectation? And maybe in the longer run, what is your RevPAR expectations for the industry?

（翻譯）所以讓我翻譯成英文。那麼兩個問題。第一，鑑於今年 RevPAR 的基數較高，我們看到過去幾季的表現相當疲弱，一直持續到第四季。但展望明年，您的期望是什麼？也許從長遠來看，您對該行業的 RevPAR 期望是多少？

And then secondly, just related to that, there's a lot of investor asking about investments or the supply situation in China, and we have heard from [TCOM] that their listing numbers in the third quarter has actually seen a quite noticeable deceleration. So wondering what management are thinking in terms of the supply situation going into next year?

其次，與此相關的是，有許多投資者詢問中國的投資或供應情況，我們從[TCOM]那裡聽說，他們在第三季的上市數量實際上出現了相當明顯的減速。那麼想知道管理階層對明年的供應情況有何看法？

(interpreted) Let me answer your first question in regarding to the next year RevPAR expectation. I think looking to this year's RevPAR performance, clearly, that was -- there was a high base from last year, especially during the summer holiday season as well as some of the peak leisure seasons. There was a mix of the reasons for the last year, either from the pent-up demand and the temporary shortage of the supply due to the reopening from the COVID. And overall, we think the RevPAR should gradually enter in a more stabilized and growth cycle, starting from next year. And we think China, overall, the leisure market is going to have a very good potential going forward.

（解釋）讓我回答您關於明年 RevPAR 預期的第一個問題。我認為，從今年的 RevPAR 表現來看，很明顯，去年的基數很高，特別是在暑假期間以及一些休閒高峰期。去年的原因有很多，要嘛是被壓抑的需求，要嘛是因為新冠疫情重新開放導致供應暫時短缺。總體而言，我們認為從明年開始，RevPAR應該逐漸進入一個更穩定且成長的周期。我們認為，整體而言，中國的休閒市場未來將具有非常好的潛力。

And we are clearly seeing a very strong government support on the leisure traveling to boost and stimulus domestic consumption, not only the domestically, but also I recently gave a lot of visa freight policies to a lot of foreign countries, which both not only drive the domestic demand, but also the inbound, which is an incremental value or volume for us to further develop the leisure market in China. So therefore, overall, we think the RevPAR should go to be stabilized and upward trend starting from next year. So we think the RevPAR for next year for us should at least remain stable. And to answer your second question in terms of the supply. And clearly, as we always mentioned, China laundry market never lack of supply but lacks of high-quality supply.

我們清楚地看到政府對休閒旅遊的大力支持，以提振和刺激國內消費，不僅是國內，而且我最近給了很多外國國家很多簽證貨運政策，這不僅帶動了國內需求，還有入境需求，這是我們進一步開發中國休閒市場的增量或增量。因此，總體而言，我們認為從明年開始，RevPAR 應該會趨於穩定並呈上升趨勢。因此，我們認為明年的 RevPAR 至少應該保持穩定。並回答你的第二個問題，即供應方面。顯然，正如我們一直提到的，中國洗衣市場從來不缺乏供應，而是缺乏高品質的供應。

And we observed several clear trends happening in the market. One is those historically driven by the property booming. A lot of traditional old 5-star hotels has been gradually existed market, like, for example, the Great Wall Hotels in Beijing and the Marriott, [Yingtong Hotels] in Shanghai, which is showing good examples. And secondly, we think those low-quality small scale and independent hotels are gradually going out of the market in the near future. But overall, the hotel market is a very market-driven, very mature markets and always adjust by demand-supply dynamics.

我們觀察到市場上發生的幾個明顯趨勢。一是歷史上受房地產繁榮推動的因素。許多傳統的老牌五星級酒店已經逐漸存在市場，例如北京的長城酒店和上海的萬豪酒店、【英通酒店】就是很好的例子。其次，我們認為那些低品質的小規模獨立酒店將在不久的將來逐漸退出市場。但總體而言，酒店市場是一個非常市場驅動、非常成熟的市場，並且始終根據供需動態進行調整。

And we think there is -- in the near future, the demand-supply will reach some of the equivalent. And that's our views on the demand-supply going forward.

我們認為，在不久的將來，供需將達到一定水準。這就是我們對未來供需的看法。

(interpreted) Okay. Let me add one more point. Through the economic cycle and over the last several years, clearly, we are seeing under the two trends. One is for the investment is becoming more rational. And from the customer side, they are seeking for better value for money products.

（解釋）好的。讓我再補充一點。透過經濟週期和過去幾年，我們清楚地看到了兩種趨勢。一是投資更加理性。而從顧客方面來說，他們也在尋求性價比更高的產品。

I think these two changes actually helped us to leverage on our cost -- very high efficiency in terms of the operational capability as well as the cost leadership capability to remain high-quality growth and further providing some of the good quality products, but for value for money seeking customers. Thank you.

我認為這兩個變化實際上幫助我們利用了我們的成本——在營運能力以及成本領先能力方面非常高的效率，以保持高品質的成長，並進一步提供一些優質的產品，但為了價值為尋求金錢的客戶。謝謝。

Our next question comes from the line of Lydia Ling from Citi.

我們的下一個問題來自花旗集團的 Lydia Ling。

(interpreted) Management, this is Lydia from Citi. So I have two questions. And so first one is on the store opening and like you actually accelerated the store opening in the third quarter. So could you share your latest target for your full year opening for this year? And how about the signing momentum in the fourth quarter to date?

（口譯）管理階層，我是花旗銀行的莉迪亞。所以我有兩個問題。第一個是關於開店，就像你們實際上在第三季加快了開店速度一樣。那麼您能分享一下今年全年開幕的最新目標嗎？迄今為止第四季的簽約勢頭如何？

And could you also share your plan for the opening and store closure for the next year. And my second question is on the competition landscape in the midscale and also the upper-midscale segment. As we see the supply in this segment -- this segment also increased, do you expect some pricing pressure looking ahead? And also, do you face actually more competition on the quality of property resources for this segment?

您能否分享一下您明年的開店和關店計畫？我的第二個問題是關於中階和中高檔細分市場的競爭格局。正如我們看到該細分市場的供應量——該細分市場也有所增加，您預計未來會出現一些定價壓力嗎？此外，您在該細分市場的房地產資源品質方面實際上面臨更多競爭嗎？

(interpreted) Let me answer your questions in regarding to the opening and closures. For this year, as you may see, the new signings as well as the new openings have both reached a record high year. And also, as I mentioned previously in my prepared remarks, in the third quarter, we also signed up over 800 new hotels during the quarter. Therefore, for the full year, the new opening for the 2024 should be somewhere around 2,400, which is slightly higher than our previous guided 2,200 new openings. And going into 2025, we think that the overall new opening should remain within a relatively healthy range and that was benefited from our branding as well as our strategy on the regional penetration and which is to further increase the brand recognition and awareness among the franchisees.

（口譯）讓我回答您有關開業和關閉的問題。正如你所看到的，今年的新簽約和新空缺都創下了歷史新高。此外，正如我之前在準備好的發言中提到的，在第三季度，我們還簽了 800 多家新酒店。因此，就全年而言，2024年的新開工數量應該在2,400個左右，略高於我們先前指導的2,200個新開工數量。進入2025年，我們認為整體新店開幕率應保持在相對健康的範圍內，這得益於我們的品牌推廣以及區域滲透策略，即進一步提高加盟商的品牌認知度和認知度。

And in terms of the closures, under the background of high-quality growth as well as the service excellence strategy. So we're going to continue to clean up some of the low-quality unqualified hotels in our existing portfolio. However, over the last several years, we have been doing this already. So the total closures pressures should last going forward.

而就關閉而言，是在高品質成長以及卓越服務策略的背景下。所以我們會繼續清理現有的一些低品質不合格酒店。然而，在過去的幾年裡，我們已經在這樣做了。因此，全面關閉的壓力應該會持續下去。

In regarding to the competition, firstly, I would like to discuss in the middle scale segment. In this particular segment, we have been established our very industry-leading brands, which is JI Hotel and Orange, which have been again a very strong brand recognition as well as the wellness, which we are very confident to compete in this segment. Especially, we are seeing that we are previously less penetrated areas such as the Southern China as well as some of other regions have been growing very rapidly.

關於競爭，首先我想討論一下中規模的部分。在這個特定的細分市場中，我們已經建立了非常行業領先的品牌，即全季酒店和橙子，這兩個品牌再次獲得了非常強的品牌認知度以及健康，我們非常有信心在這個細分市場中競爭。特別是，我們看到以前滲透率較低的地區，例如華南地區以及其他一些地區，成長非常迅速。

In terms of the upper mid segment, we are thinking this industry is also doing a consolidation and especially under the trend that the customers are seeking more value-for-money products. And our key brands like Crystal Orange and Intercity actually are providing a very high-quality product, which is offering a very good value for money products to the customers. And together with the property market changes and some of the traditional upscale and some of the property driven 5-star hotels, some of the property has been released to the market, which is going to help us to -- which is going to be benefiting us for further developing this segment.

就中高端市場而言，我們認為這個產業也在進行整合，特別是在顧客尋求更多物有所值產品的趨勢下。我們的主要品牌，如 Crystal Orange 和 Intercity，實際上提供了非常高品質的產品，為客戶提供了非常物有所值的產品。隨著房地產市場的變化，一些傳統的高檔酒店和一些房地產驅動的五星級酒店，一些房地產已經投放市場，這將幫助我們——這將受益我們進一步發展這一領域。

Leveraging on our improvement on the branding as well as the management capability, we have been achieving over 30% of the -- 30% growth in terms -- in that particular segment. And we believe we are very confident that we can further develop this market in a relatively rapid speed. From a mid- to long-term perspective, we are also hoping to be one of the leading brands in this upper to mid segment. Thank you.

憑藉我們在品牌和管理能力方面的改進，我們在該特定領域實現了超過 30% 的成長（按比例計算為 30%）。而我們相信我們非常有信心能夠以比較快的速度進一步開發這個市場。從中長期來看，我們也希望成為這個中高端市場的領導品牌之一。謝謝。

Our next question comes from the line of Dan Chee from Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Dan Chee。

(interpreted) This is Dan from Morgan Stanley. My question is about Legacy-Huazhu's leased and operated businesses. We saw 25 hotel closures and selected closure of underperforming leased and owned hotels. Can management share more insights on the leased and owned business strategy? Is this proactive closing one-off? Or is a longer-term plan strategy? If this is the latter, how many leased and owned hotels in our current portfolio will get impacted?

（翻譯）我是摩根士丹利的丹。我的問題是關於Legacy-華住的租賃和經營業務。我們看到 25 家酒店關閉，並選擇性地關閉了表現不佳的租賃和自有酒店。管理階層能否分享更多關於租賃和自有業務策略的見解？這種主動關閉是一次性的嗎？還是更長期的計劃策略？如果是後者，我們目前投資組合中有多少租賃和自有飯店會受到影響？

(interpreted) Okay. Let me answer your questions. First of all, our company is a presentation from -- to asset -- more asset-light model. And also, you are right, in the third quarter, we closed the 25 leased and owned hotels, which is more than the first half of this year. Out of this 25 leased and owned hotel closures, around 8 of them are transferred to manachised hotel and the remaining are basically closed due to the lease contract expired.

（解釋）好的。讓我回答你的問題。首先，我們公司呈現的是一種從──到資產──更輕資產的模式。而且，你說得對，第三季度，我們關閉了 25 家租賃和自有酒店，比今年上半年還要多。在這25家關閉的租賃和自有酒店中，約有8家被轉移到管理酒店，其餘的則因租賃合約到期而基本關閉。

Some of them are not meeting us in terms of the operational performance or some other issues that we are not able to renew the contract. In the fourth quarter and next year, we're going to continuously to close more leased and owned hotels. But in terms of the quantity, it should be higher than the first half, but less than the third quarter. Thank you.

其中一些在營運績效方面不符合我們的要求或其他一些問題，我們無法續約。第四季和明年，我們將繼續關閉更多租賃和自有飯店。但從數量上看，應該高於上半年，但低於第三季。謝謝。

We have reached the end of the question-and-answer session. Thank you, all, very much for your questions. I'll now turn the conference back to the management team for closing comments.

我們的問答環節已經結束。非常感謝大家提出的問題。現在我將把會議轉回給管理團隊以徵求結束意見。

Thank you, everyone, for taking your time with us today, and we look forward to see you in upcoming quarters. Thank you, and bye-bye.

感謝大家今天抽出時間與我們在一起，我們期待在接下來的幾季見到您。謝謝你，再見。

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。