GreenTree Hospitality Group Ltd. Q3 FY2023 earnings call

• Hotel RevPAR recovered significantly, reaching over 110% of 2019 levels in July and August, though slowed in September. - Expanded mid-to-upscale hotel segment with 455 hotels (10.9% of total portfolio) and increased penetration in Tier 3 and lower cities in South China. - Restaurant ADS continued upward trend, reaching a long-time high. - Membership programs saw growth: individual hotel members up to 88 million, corporate up to 2.02 million; restaurant individual members up to 2.67 million.

Hotel Segment: Total hotel revenues in the third quarter increased 40.4% year-over-year to RMB 339.1 million, primarily due to RevPAR recovery and more hotels. RevPAR was RMB 156, up 30.5% year-over-year. Total revenues from F&M hotels were RMB 186 million, up 20.8% y-o-y, while total revenues from L&O hotels increased 83.1% to RMB 151.8 million. Restaurant Segment: Total restaurant revenues were RMB 121.8 million. ADS continued an upward trend, reaching RMB 6,548, up 7.4% y-o-y. The number of individual members grew to 2.67 million, up 1.6% y-o-y.

• Revised full-year 2023 guidance for organic hotel revenues to grow 36% to 38% year-over-year. - Expect total combined revenues from restaurant and organic hotel business for 2023 to grow 17% to 19% over 2022 levels, accounting for restaurant closures. - In October 2023, repurchased 554,158 ADS at USD 4.40 per ADS under a USD 10 million share repurchase program authorized by the Board.

Q: About RevPAR outlook, especially post-national holiday and November trends, and 2024 outlook?

A: Selina Yang and Alex Xu discussed RevPAR comparison to 2019, post-holiday slowdown, and 2024 expectations around economic recovery, leisure travel sustainability, and system-wide RevPAR growth from new mid-to-upscale hotels.

Q: Regarding hotel opening plan for 2024 and RevPAR assumption for 2024 Q1?

A: Selina Yang said 2024 hotel sign-ups expected to be 650-680, openings 450-470. Alex Xu mentioned RevPAR in Q1 2024 expected to aim for same level as 2019, with leisure travel continuing but not as strong as summer 2023, and system-wide growth from new mid-to-upscale hotels.

Q: On hotel opening numbers, fourth quarter RevPAR and margin outlook?

A: Alex Xu and Selina Yang clarified hotel opening numbers (sign-ups vs. openings), fourth quarter RevPAR projection to maintain 2019 levels, and margin improvement through franchise model changes, cost savings, and efficiency improvements.