Q2 2026 H World Group Ltd Earnings Call Transcript
Key Points
- H World Group Ltd (HTHT) reported strong financial performance in Q2 2026, with group revenue up 10.8% year-over-year to RMB7.1 billion and adjusted net income up 26.9% to RMB1.7 billion.
- The company's asset-light manachised and franchise (MNF) business showed robust growth, with revenue increasing 25.2% year-over-year to RMB3.6 billion and gross operating profit up 18.5%.
- H World Group Ltd (HTHT) achieved its fourth consecutive quarter of positive ADR growth in China, with ADR up 2.6% year-over-year, leading to a 1.1% RevPAR increase.
- The company's hotel network expansion remains on track, with 13,417 hotels in operation in China and a pipeline of 3,054 hotels, supporting its goal of 20,000 hotels in 2,000 cities.
- H World Group Ltd (HTHT) announced a new three-year shareholder return plan of USD2.5 billion, including an ordinary cash dividend of approximately USD275 million, reflecting strong cash flow and balance sheet.
- The company's flagship brands, including JI Hotel and HanTing, achieved top global rankings for single-brand room counts, underscoring brand strength and market leadership.
- H World Group Ltd (HTHT) maintained its full-year RevPAR outlook and hotel opening guidance, despite short-term weather disruptions, indicating management confidence in long-term growth.
- The company's membership program and direct sales capabilities continue to strengthen, with steady growth in member room nights and cross-industry partnerships, including with Accor for international expansion.
- H World Group Ltd (HTHT)'s international business (HWI) saw a 3.8% year-over-year decline in RevPAR in Q2 2026, impacted by the Middle East conflict and ramp-up of Southeast Asia expansion.
- The company's international revenue decreased 5.8% year-over-year to RMB1.3 billion, partly due to the closure of leased hotels, which reduced lease revenue.
- H World Group Ltd (HTHT) experienced slower hotel openings in the first half of 2026, with 1,035 hotels opened, 20% below the same period last year, though management attributes this to normal volatility.
- The company noted that severe weather during the summer holiday season negatively affected operational results in some markets, leading to performance below expectations in the first half of summer.
- H World Group Ltd (HTHT) faces challenges in new markets, such as lower-tier cities and inbound travel, where member contribution to bookings is still ramping up, requiring reliance on OTAs.
- The company's upper midscale segment, while growing, is still in the refinement stage, with brands like Grand Ji being developed cautiously, which may limit near-term expansion speed.
- H World Group Ltd (HTHT) acknowledged that total domestic travel spending growth moderated to 2% year-over-year in the first half, reflecting more prudent consumer spending, which could pressure future revenue growth.
- The company's international margins were negatively impacted by the Middle East conflict, though management noted the impact is controllable and maintains a goal of positive profit for HWI.
Good day, and thank you for standing by. Welcome to the H World Q2 2026 earnings conference call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Ivy Luo. Please go ahead.
Thank you, operator. Good evening, and good morning, everyone. Thanks for joining us today. Welcome to H Wold Group 2026 second quarter and first half earnings conference call. Joining us today is our Founder and Executive Chairman, Mr. Ji Qi; our CEO, Mr. Jin Hui; our CFO, Mr. Arthur Yu. Following our 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. Forward-looking statements may involve inherent risks and uncertainties. As such, our results may be materially different from the views
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