Atour Lifestyle Holdings Ltd. Q1 FY2025 earnings call

• Hotel Product Upgrades: In the upper mid - scale segment, Atour 3.6 was launched, and Atour Series 3 and Series 4 will jointly shape the next - generation upper mid - scale hotel portfolio. For existing hotels needing renovation, the Atour 3.5 SE renovation program was introduced. In the mid - scale segment, Atour Light 3.3 was launched, which has comprehensive upgrades in multiple aspects.
• Retail Product Innovation: Atour Planet developed a standardized user - driven product iteration model, continuously driving innovation in product materials and manufacturing technologies, and establishing end - to - end quality control.
• Membership Business and Channel Development: Registered individual members exceeded 96 million by the end of the first quarter, a year - over - year increase of 35.4%. The core CRS channel accounted for 65.1% of total room nights sold in the first quarter. Cross - promotional campaigns were introduced to drive cross - consumption between hotel and retail businesses.
• ESG Report: The 2024 ESG report was released, with the company strengthening ESG governance and fulfilling social responsibilities through various programs.

Hotel Business

• RevPAR in the first quarter of 2025 reached RMB 304.4, representing 92.8% of the same period in 2024. OCC was 95.8% and ADR was 97.2% compared to the same period in 2024. For mature hotels in operation for more than 18 months, RevPAR in Q1 2025 was 92.8% of the same period in 2024, with OCC and ADR reaching 95.6% and 97.4% of 2024's levels respectively. In the first quarter, 121 new hotels were opened, a year - over - year increase of 24.7%. By the end of the first quarter, there were 1,727 hotels in operation, a year - over - year increase of 32.6%, and 755 hotels were under development.

Retail Business

• Retail business GMV reached RMB 845 million in the first quarter, up 70.9% year - over - year. Online channels contributed over 90% of total GMV. The deep sleep memory foam Pillow Pro series of Atour Planet accumulated sales exceeding 6 million units. In March, the Deep Sleep Thermal regulating Comforter Pro 2.0 summer season was launched, ranking first in sales in its category on Tmall and Douyin in the first month and exceeding RMB 100 million GMV within 48 days.

• Full - year 2025 total net revenue is expected to increase by 25% to 30% compared with 2024.
• Retail business full - year revenue growth forecast is raised to 50% year - over - year.
• Declared the first cash dividend in 2025 of USD 0.14 per ordinary share or USD 0.42 per ADS, and announced a 3 - year share repurchase program with an aggregate value of up to USD 400 million.

• Market environment is complex and volatile, leading to uncertainties in RevPAR.
• Intense market competition may bring challenges to business development.

Q: Could you please share the performance of RevPAR since Q2 and provide outlook on RevPAR for the full year?

A: In Q1, overall market had volatility. RevPAR decreased by 7.2% year - over - year, and OCC and ADR also had varying degrees of decline. Entering Q2, market demand diverged. Business travel recovery was uncertain, but leisure travel demand was resilient. Anticipated RevPAR pressure might ease in Q2 compared to Q1. Full - year RevPAR performance still faces considerable uncertainty due to ongoing market volatility, but will adhere to Atour's differentiated experience advantages and adopt balanced revenue management strategy.

Q: Could you please share your view on the new signings momentum and also new hotel openings for the full year of 2025?

A: In the first quarter, had positive signing momentum. New openings in Q1 were 121 hotels. Maintained full - year opening guidance of 500 new openings, and will impose stricter quality requirements from multiple dimensions to ensure hotels grow with quality.

Q: My question is related to the company's retail business. We saw retail business revenue growth in the first quarter was outstanding at 67% year - on - year. Previously, the company guided full year retail revenue of no less than 35% growth. I would like to ask the management about any update to the full year revenue guidance on this business and any strategic plan for retail in the coming period?

A: In first quarter, retail business achieved over 70% GMV growth. Confident in full - year performance due to continuous enhancement of Atour Planet product offerings and brand awareness. Now raising full year retail revenue growth forecast to 50% year - over - year. Atour Planet will continue to focus on the deep sleep domain, enhance product R&D, improve product quality, and consolidate supply chain moat.

Q: We noticed that you had just announced dividend and share buyback program. Could you share some thoughts of the overall considerations behind these initiatives?

A: Remain committed to creating long - term value and rewarding shareholders. Implemented 3 - year dividend plan, declared first cash dividend in 2025, and announced 3 - year share repurchase program. Will combine dividend payout and share buyback to enhance shareholder yield and enable shareholders to share in company's growth.

Q: Could you provide an update on the progression of your upscale of brands? And also, we noticed the launch of some new products across both the upper scale and also mid - scale brands. So could you elaborate more on the strategies for them?

A: For upscale brands, adhere to quality - first principle. The [indiscernible] flagship hotel at Binhu of Shenzhen will commence operations on May 28th. In the upper mid - scale hotel segment, Atour 3 and Atour 4 series will coexist to shape the next - generation portfolio. In the mid - scale hotel segment, upgraded Atour Light 3.0 to Atour Light 3.3, which has comprehensive upgrades and adopts modular design applications to create a higher premium and cost - controllable investment model.