The following is a summary of the GreenTree Hospitality Group Ltd. (GHG) Q3 2024 Earnings Call Transcript:
Financial Performance:
Total revenues for Q3 2024 were RMB 357 million, marking a 22.5% decline.
Hotel revenues dropped by 15.4% to RMB 286.9 million primarily due to a decrease in RevPAR of 13.6%.
Net income decreased by 44.4% to RMB 65.2 million.The total operating costs and expenses for the hotel business decreased by 4.9% to RMB 201.9 million.
Business Progress:
Hotel business saw a strategic adjustment with new openings and a focus on growing pipeline especially in mid to upscale segments primarily in Tier 3 cities and some expansion into Tier 2 cities.
Transformation strategy in the restaurant business is largely complete, with an emphasis on more favorable locations such as street stores and franchise models.
Opportunities:
Growth in membership programs reflects strong direct sales potential, with individual memberships increasing to 100 million from 88 million.
Anticipated stronger performance in FY 2025 with many new hotels in the pipeline and improved RevPAR especially in lower-tier cities.
Risks:
Decrease in historical RevPAR figures due to higher proportion of legacy hotels negatively affecting performance compared to peers with newer hotel portfolios.
Strategic review and operational adjustments lead to the closure of 9 hotels which also contributed to the revenue decline.
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