In 2024, the domestic tourism market has continued its growth momentum. According to data from the Ministry of Culture and Tourism, in the first half of this year, the total number of domestic trips in the country was 2.725 billion, a year-on-year increase of 14.3%; the total expenditure of domestic tourists was 2.73 trillion yuan, a year-on-year increase of 19.0%. Both key indicators in the second quarter exceeded the level of 2019.
The booming tourism industry has driven the hotel industry to a new growth trend. According to the monitoring data of Aowei Cloud Network, in the first half of 2024, there were 0.023 million newly opened hotels, close to 59% of the total number of stores opened in 2023; the number of rooms reached 1 million, accounting for 61% of the total number of rooms opened in 2023. And due to the increasing pursuit of high-quality accommodation and services by consumers, the mid-to-high-end hotel market has also shown strong growth momentum. The exploration and release of the potential of this blue ocean market by hotel brands will be the key to driving future capital market valuation recovery.
In this logic, the author found that atour lifestyle holdings, as a representative of mid-to-high-end hotels, delivered a very impressive second-quarter report. Using this latest performance data as a starting point, we can explore the company's value opportunities, which also have a strong reference significance for the industry's development direction.
The second quarter set a record high for new store openings, and strong demand for mid-to-high-end hotels supported by the strong tourism nation.
The cultural tourism market continues to recover, with tourist demand fully released, combined with the recovery of business travel demand, leading the hotel industry into a new stage of strong recovery and high-quality development, from which atour lifestyle holdings fully benefits.
According to the financial report, atour lifestyle holdings achieved a total revenue of 1.797 billion yuan in the second quarter of this year, a year-on-year increase of 64.5%; the adjusted net income was 0.328 billion yuan, an increase of 31.6%; the adjusted EBITDA was 0.443 billion yuan, a year-on-year increase of 28.6%.
In terms of the hotel performance indicators that investors are most concerned about, in the second quarter, the average revenue per available room (RevPAR) of atour lifestyle holdings' hotels was 359 yuan; the average daily room rate (ADR) was 441 yuan; the occupancy rate (OCC) reached 78.4%, an increase of 1.3 percentage points year-on-year, demonstrating strong operational resilience and market influence.
It can be seen that atour lifestyle holdings has a stable occupancy rate, coupled with providing high-quality product services and excellent bargaining power, resulting in a high degree of income elasticity. As atour lifestyle holdings has long been deeply cultivating the mid-to-high-end market segment, during the strong recovery phase of the hotel industry, the success of its business model, along with performance growth, has been further validated.
From the perspective of industry development, the mid-to-high-end hotel market has always existed, but with the upgrading of consumer experiences, the complexity of consumer demands has become more prominent, putting higher demands on brands in terms of design, products, and services. With the performance in the second quarter of this year, as well as the demonstrated product strength and brand influence, Atour Lifestyle Holdings can be said to provide a good reference to the industry, greatly enhancing market confidence.
And under the policy drive this year, the tourism and hotel industry is also undergoing positive changes.
There is continuous effort in policy to improve the modern tourism industry system, promoting China to accelerate the construction of a powerful tourism country, with the tourism industry becoming a new engine for economic growth. The policy will have a strong positive effect on the development of the supply side of the tourism industry, combined with the steady increase in demand expectations on the demand side of the tourism industry, resulting in a sustained upward trend in the prosperity of the tourism industry. In the future, the hotel industry is expected to indirectly benefit from the policy dividends, with an increase in the number of guest stays and transaction volume, further accelerating development.
Furthermore, it can be foreseen that hotel investments and the confidence of hotel franchisees will be comprehensively boosted. With the increasing number of Atour Lifestyle Holdings stores, its core business continues to show strong growth with high certainty. Based on Atour's leading position in the mid-to-high-end hotel market, its profitability is likely to remain at a high level, market share will further increase, attracting more investors' attention and market funds.
"Experience" is the underlying logic of supply-side development, Atour Lifestyle Holdings provides a sample reference.
Returning to the hotel itself, the success and enduring nature of mid-to-high-end hotel brands always comes down to the consumer experience. Will customers want to make repeat purchases and become long-term loyal users of the hotel? From the investor's perspective, this will truly impact and determine the hotel's performance, user base, and user stickiness, thereby changing the capital market's value judgment of hotel brands.
According to a research report, in the post-epidemic era, consumers are paying more attention to lifestyle and personalized experiences. Mid-to-high-end brands with a focus on service experiences are likely to benefit first. This means that, to capture the needs of business travelers and leisure vacationers, "experience" will be the key for hotel brands to break through in the competitive second half.
In this aspect, Atour Lifestyle Holdings has already embarked on a unique path worth industry reference. To date, Atour has extended the 'China experience' from daily hotel operations to covering multiple scenarios including clothing, food, lodging, transportation, entertainment, etc., through in-depth operation of demographics. At the same time, the operation of the entire store process from booking to check-out has been segmented into 17 service touchpoints.
In the second quarter of this year, Atour Lifestyle Holdings continued to expand its hotel network to better meet consumers' experiential needs. In the second quarter, 123 new hotels opened, further accelerating from the previous quarter's 97, setting a new quarterly record. By the end of the second quarter, Atour Lifestyle Holdings had a total of 1412 operating hotels, a year-on-year increase of 36.6%, with 712 hotels in the pipeline for development.
The retail business extended from its core experiential focus has also experienced rapid development. Financial data shows that in the second quarter, Atour Lifestyle Holdings' retail business GMV reached 0.62 billion yuan, a 157.6% year-on-year growth.
The increasing recognition of Atour's proprietary brands by users has led to continuous growth in Atour A-Card membership. By the end of the second quarter, the number of registered Atour members surpassed 76 million, a 72.5% year-on-year increase. Having a high level of direct customer sources allows for effective reduction of OTA commission rates, enhancing single-store profitability. This essentially results from the positive feedback brought by the upgraded user experience.
Looking ahead, with Atour continuously enhancing user experience, there will be a synergistic effect between the hotel and retail businesses. The membership system will further optimize costs, opening up broader growth opportunities for the company's performance.
Therefore, whether it is in the development of the mid-to-high-end hotel industry or for investors to make investment decisions, Atour's differentiated operational strategy, diversified layout, and brand management approach provide valuable reference for value.
Conclusion:
Looking to the future, the growth potential of the mid-to-high-end hotel market is quite certain. In the short term, summer cultural and tourism consumption is hitting new highs, making Atour's performance in the third quarter still worth anticipating. In the long term, the mid-to-high-end hotel market currently has relatively low brand penetration rates and insufficient chainization, offering ample room for industry development.
It is worth mentioning that after the financial report was released, Atour Lifestyle Holdings also announced a three-year dividend policy, planning to distribute dividends annually not less than 50% of the previous fiscal year's net income. This year, the company will distribute cash dividends at a ratio of $0.15 per ordinary share or $0.45 per ADS, totaling approximately $62 million, with payments expected around September 30th.
Having a clear future dividend plan provides shareholders with clear expectations, effectively boosting market confidence in the company's future development. In the context of being a strong tourism country, policies will be successively introduced from the national to the local level to promote the development of the cultural and tourism industry. The hotel industry is expected to rise with the momentum, and Atour Lifestyle Holdings is expected to be favored by investors in the long term.