Bruce Mi: So I actually have 2 questions. And first one is regarding the hotel opening. So could you please share with us about your hotel opening plan for 2024 and your long-term hotel operation target? And the second question is still on RevPAR. So — actually, we have observed very strong leisure term demand in the summer travel season and also the national day, The Golden Week. So — but some investors worry that it’s maybe a one-off pent-up demand after the China’s reopening. So do you worry that this leisure travel demand could be sustainable in next year? And what’s your RevPAR assumption for 2024 and Q1 next year?
Selina Yang: Thank you for your question. Okay. Maybe I can answer the first question. Actually, for this year, we have shared the number of signed contracts last time, that is 600 towards end of this year. And we are likely to open more than 400 hotels this year. And for the next year, we plan to sign more than 650, that is about 650 to 680 hotels in the year 2024, and we are likely to open 450 to 470 hotels in the next year. That means about a 12% increase of this year to 15% increase of this year.
Alex Xu: Okay. So with regard to the RevPAR projection, as we discussed earlier, the remaining of the fourth quarter of 2023, we believe the pressure is there. And the RevPAR compared with 2019, we were trying to make it stable and reach the same level, and we do not see a significant increase that will be the same as the third quarter, like during the summer vacation because that is driven by leisure tourism. And regarding the next year, because our hotels are primarily priced at the most affordable value-driven and we do not believe that our system-wide RevPAR will be impacted that much. There will be, I think, still continued demand in the leisure tourism segment, especially on the affordable segment due to the large portion and a larger percentage increase in the retirees and their demand for the leisure travels.
And also, we believe there will be gradually recovery of economic activities result in more business travels, but we certainly do not see the leisure travel will be as strong as the last summer. So in our own assumptions, the same store, the same hotel RevPAR and our goal is to maintain the same. And our system-wide RevPAR increase will be upward because we’ll continue to open more mid- to upscale segment hotels. And that’s right now around 11%, will continue to increase that percentage. And meanwhile, we will — system-wise, we’re closing down certain lease expired hotels. And so because of the way the change, we’ll see the system-wide RevPAR continue to an upward increasing trend for the 2024.
Operator: [Operator Instructions] The next question comes from Simon Cheung with Goldman Sachs.
Simon Cheung: So I was just referring to — I have 2 questions. One is just on the hotel opening numbers that Selina was sharing. I cannot miss that. Is that 650 or 680, and then there were another 450 and 470. Was that one is gross and other one is net for next year and this year? And perhaps maybe just more broadly, given that you have given guidance for specifically the hotel as well as the restaurant segments overall for this year. Perhaps you can give us a sense of your assumption for fourth quarter. What sort of RevPAR are you expecting? What sort of a hotel and then similarly for restaurant? That’s the first question. And then the second question is, when I look at your costs, particularly on a sequential basis, there’s quite a bit of a cost saving across restaurant and hotel business.
Can I — and then I’ve observed that your hotel EBITDA margin back to, what, 47%, 48%, pretty much back to 50%. Just wanted to get a sense how you’re thinking about scope for cost saving and the magnitude or potential further margin expenses, if any?
Alex Xu: Thanks, Simon. I’ll answer the first question. Regarding the margin, I’ll leave that to Selina. So Simon, that — the 650 to 680, I believe that’s what we shared with you, that’s the signing up of the hotels. And the 450 to 480, and so we have an internal projection that’s the opening of hotels. So that’s the number I want to clarify with you. Regarding the next quarter’s RevPAR, and we just reiterated, I think that we continue to project and continue to work hard to achieve at least the same level of that of 2019. And so that’s on fourth quarter of 2023. Okay. So with — regarding the margin, I’ll leave that to Selina.
Selina Yang: Okay. Thank you, Simon. Here, I wrote down 2 questions for you. The first one is about the hotel — the restaurant margin, why is better? Why was better than before? Because in this quarter, the restaurant — the net income of the restaurant was nearly RMB 10 million, that’s much better than before, I think for several reasons. The first one, as for the seasonality reason and as the recovery of the industry, the performance of the restaurants was better than before. Second reason for [Da Niang], we closed 85 unprofitable hotel stores over the past 12 months, and the profitability of the remaining hotels was much better than before. And the third reason is that we changed the franchise model. We have already begun to change the franchise model.
