H World Group's 2024Q4 Earnings Call: Conflicting Signals on RevPAR, Asset Disposal, and Strategic Direction

These are the key contradictions discussed in H World Group's latest 2024Q4 earnings call, specifically including: RevPAR Growth Expectations, Disposal of Asset-heavy Businesses in DH, and Strategic Direction for the DH Segment:



Revenue Growth and Asset-Light Strategy:
- H World Group reported a 9.2% year-over-year increase in total revenue for the full-year of 2024, reaching RMB23.9 billion.
- This growth was driven by the success of the asset-light strategy, with the revenue contribution from manachised and franchised hotels reaching 40% for the group, up from 35% a year ago.

Hotel Network Expansion:
- The company achieved a record high of 2,442 new hotel openings in 2024, with Legacy-Huazhu contributing 2,430 new openings.
- This expansion was supported by the acceleration of lower-tier cities penetration and the focus on the mass market for growth opportunities.

Domestic Travel Demand and Leisure Travel Growth:
- Domestic travel demand continued steady growth, with railway passengers up 11.9% and air passenger traffic up 8.8% year-over-year in 2024.
- Leisure travel outperformed business travel, with domestic tourists reaching 5.6 billion, up 14.8% year-over-year.

RevPAR and ADR Trends:
- Legacy-Huazhu's blended RevPAR decreased by 3% to RMB235 in 2024, with an occupancy rate improvement of 0.2 percentage points to 81.2%.
- The ADR was down 3.2% to RMB289 due to a high base last year and supply increase in some regions.

Fiscal Performance and Cash Flow:
- The company generated an operational cash inflow of RMB7.5 billion in 2024, driven by the transformation to a more asset-light portfolio.
- H World Group maintained a solid net cash position of RMB6.5 billion by the end of 2024, with RMB11.9 billion in cash equivalents and time deposits.