H World Group Limited

In Q2 2026, H World reported group revenue of RMB 7.1 billion, up 10.8% year over year. China revenue increased 14.9% to RMB 5.9 billion, while international business revenue decreased 5.8% to RMB 1.3 billion. Adjusted EBITDA was RMB 2.7 billion, up 20%, with adjusted EBITDA margin expanding to 38.3% from the prior year, and adjusted net income was RMB 1.7 billion, up 26.9%, with margin at 24%. In China, ADR increased 2.6% and RevPAR increased 1.1%; in HWI, blended RevPAR fell 3.8%, with ADR up 0.9% and occupancy down 3.5 percentage points. For the asset-light M&F business, revenue grew 25.2% to RMB 3.6 billion and gross operating profit increased 18.5% to RMB 2.2 billion. For the outlook, management said full-year 2026 RevPAR expectations remain unchanged, full-year opening guidance remains unchanged, and HWI full-year goal remains a positive profit.

CEO Jin Hui emphasized that China travel demand remains resilient, supported by leisure travel, inbound tourism, and government policies, but he also noted softer summer performance in some regions due to severe weather. He framed H World’s strategy around high-quality growth: expanding into lower-tier cities, defending core urban locations, upgrading products like Hanting and JI, and using membership and direct sales as key competitive advantages. His tone was constructive but measured, repeatedly calling the outlook “cautiously optimistic” and stressing long-term discipline over pure scale.

CFO Arthur Yu said the quarter showed both revenue growth and margin expansion, driven by the asset-light business mix and controlled expenses. He cited group revenue of RMB 7.1 billion, adjusted EBITDA of RMB 2.7 billion with a 38.3% margin, and adjusted net income of RMB 1.7 billion with a 24% margin; he also said hotel operating costs rose 7.4% and SG&A rose 6.1%, both slower than revenue growth. On capital allocation, he said the company completed its 2024 shareholder return plan one year early, announced a new 3-year shareholder return plan totaling USD 2.5 billion, and approved an ordinary cash dividend of about USD 275 million.

Analysts focused on RevPAR trends into the second half, hotel openings versus last year, the Hanting product upgrade, upper mid-scale supply-demand balance, membership channel mix, and margin trends in China versus overseas. Management said July was hurt by severe weather in some markets but August trends were recovering, and it kept full-year RevPAR unchanged; for openings, it said first-half softness reflected base effects and supply chain issues, but full-year opening guidance was unchanged. On membership, management said OTA contribution is stable around 20% to 25%, while it is pushing better member benefits, cross-industry partnerships, and international cooperation such as with Accor. On margins, CFO Arthur Yu said profitability should stay “very stable” in the second half and reiterated the goal of positive full-year profit for HWI despite Middle East-related pressure.