If one were to summarize the tourism market in the first three quarters of 2023, it would be described as “a steady start and a steady rise, continuing to pick up”.

After experiencing the pandemic, a large number of people chose to “give life a trip to nature” and started the travel mode one after another. According to the data center of the Ministry of Culture and Tourism, during the 11th period, the number of domestic travelers was 826 million, an increase of 71.3% over the same period; domestic tourism revenue reached 753.43 billion yuan, an increase of 129.5% over the same period on a comparable scale.

According to the China Institute of Tourism Research, the number of domestic tourists is expected to reach 5.5 billion throughout the year. The popularity of the tourism consumer market continues to rise, driving the rapid development of the hotel industry.

Although embracing growth has become the main theme of the hotel industry, the nourishment of dividends has not always been “spread by rain and dew.” After three years of being baptized by the pandemic, with the new middle class as the main consumer force, they have long regarded “rejection as one of their core needs.” As a result, varied and cost-effective high-end hotel products have become an ideal choice for consumers who can continue to spend in a “mobile lifestyle.” As a result, high-end hotels have become the fastest-growing market segment, and may usher in a new wave of development.

On the other hand, on the supply side, the reaction rate and adjustment ability of different players vary greatly, and the “Matthew effect” of the industry will accelerate and expand as a result. “Those who seek well win, those who seek prosper”. The middle and high-end industry leader that just released the Q3 financial report, ATAT.US (ATAT.US), has taken the lead in prominent dominance with its more sensitive commercial sense of the track, its unique cultural label, and high-quality service. It has also gained a double increase in scale and profit, and has also become one of the reference models for the development of the industry.

1.Leading the high-end hotel industry, Q3Development accelerated across the board

Currently, high-end hotels are still in the early stages of competition. Since consumers have relatively high individualized requirements for middle and high-end products, it is difficult to form an absolute scale advantage and competitive barrier, and there is still plenty of room for development. According to Frost & Sullivan, in 2016-2021, the number of high-end hotels in China grew the fastest among all categories of hotels, with a compound annual growth rate of 35.6%.

After nearly ten years of accumulation and development, Yaduo insists on using a high level of product innovation to continuously bring experiential surprises to users. It is this insistence on experience that has enabled Yaduo to continue to consolidate its differentiated position and competitive advantage in the industry. It is also this persistence. Yaduo has seized a period of opportunity in the industry, grew into a leading brand of middle and high-end hotel chains, and frequently handed over impressive reports.

Financial reports show that in the third quarter of 2023, Yaduo Group's revenue was 1,294 million yuan (RMB, same below), a sharp increase of 93.1% year on year; adjusted net profit (non-GAAP) was 272 million yuan, up 144.7% year on year; adjusted EBITDA (non-GAAP) was 380 million yuan, up 122.4% year on year, and achieved rapid three-digit growth in terms of core financial data.

However, focusing on the level of core business indicators can also further verify Yaduo's high-quality development. Yaduo Group achieved significant growth in several key indicators in the third quarter. RevPAR (average rental room revenue) was 424 yuan, a record quarterly high.

Why Yado's RevPARAble to be far ahead?

On the one hand, it comes from the high ADR (average daily rate). According to the data, Yaduo's ADR in the third quarter exceeded the same period in 2019, and is also far ahead in the industry. Since Yaduo focuses on the middle and high-end hotel market, the quality of products and services is stable, so it has brought greater bargaining power. At the same time, Yaduo stores are distributed in Tier 1 and 2 cities with stronger spending power, which can support higher housing prices and drive further revenue growth.

On the other hand, the OCC (average occupancy rate) is strong, underpinning RevPAR's strong ability to recover. The data showed that in 2020Q1-2022Q4, Yaduo's average occupancy rate recovered about 88%, while OCC had few more than 80% of its peers during the same period. This quarter, Yaduo OCC reached 82.4%, which also exceeded the same period in 2019.

The double growth achieved by Yaduo in terms of ADR and OCC not only validates the company's long-term sustainable high-quality growth capability, but also reflects the long life cycle and enduring market competitiveness of its products.

Overall, Yaduo has now escaped the impact of the epidemic and has fully benefited from the recovery of the current consumption environment and changes in consumption preferences.

II.Redefining the travel lifestyle, a reference model for industry development

As consumers' purchasing power and consumption power increase and demand upgrades continue to change, more and more players are entering the middle and high-end hotel market. How did Yaduo win in the competition with international hotels that “fight for a deer” in the Chinese market and local hotels that develop independently?

Seize customer needs and continue to iterate to improve product experience

In fact, both consumers and brands clearly understand the fundamentals of hotel management and focus on service and experience, but being able to deeply understand user needs and achieve the ultimate in service products is not an easy task. Since its establishment, it can be said that Yaduo has received unanimous praise for its high-quality service and safe experience. It is favored by consumers and has become too addicted to “hot money.”

Photo source: social media

This year, Yaduo proposed a new three-year development strategy of “China Experience, 2,000 Good Stores”, based on its previous high-quality service, to further upgrade the enjoyable, comfortable, and personalized lifestyle experience. The Yaduo Premium APLUS, which continued to be upgraded in the third quarter, also continued to optimize users' accommodation experience through innovative iterations of service products.

The continuous increase in user stickiness brought about by high-quality services and personalized experiences also explains why the compound annual growth rate of Yaduo members can reach 48.7%. As of September 30, 2023, the number of registered Yaduo members has exceeded 54 million, which is expected to continuously send energy to performance.

Show good investment value and empower scale to enhance brand influence

In addition to Yaduo's impressive market performance, which shows Yaduo's investment appeal, stable quality output and a double increase in revenue and reputation are the best results for both investors and brands, and the key to a firm bond between the brand and investors.

Yaduo provides investors with a complete support system in terms of franchise, which greatly helps investors reduce operating pressure and improve operational efficiency and quality. Promote the continued recovery of franchisee confidence. In the third quarter, the number of newly opened hotels in Yaduo reached 81, the number of active hotels reached 1,112, and the number of rooms reached 128,681. According to the number of hotel rooms, Yaduo continues to rank first in the middle and high-end hotel chain in China. The number of hotels that continue to grow at a high rate is better able to create a scale effect, create greater influence, and amplify their long-term value.

epilogue

As Wang Haijun, founder and CEO of Yaduo Group, said, “The new lodging business format pioneered by Yaduo not only provides accommodation and related functions, but is also committed to becoming a hub for traditional cultural heritage. Yaduo takes traditional Chinese culture as its core, forms the spirit of products and experiences, and uses Chinese hospitality to achieve a warm connection between people.”

It is also this inheritance of traditional culture that has enabled Yaduo to achieve significant breakthroughs in performance and business reputation while providing a differentiated advantage. It can be seen as a new banner for the development of the industry, and is worthy of reference and study for all enterprises entering the high-end hotel market.

As competition in the high-end hotel industry intensifies, we are bound to enter into competitive relationships in the future. The only way is to learn from each other, learn from each other's strengths and make up for our shortcomings, and drive out bad money with good money. Therefore, Yaduo, who embodies traditional Chinese characteristics and differentiates itself through innovation, is a more necessary presence in the current development of China's hotel market.