H World Group Limited (NASDAQ:HTHT) Q1 2023 Earnings Call Transcript

So, we think we should give the market a bit patience in terms of the sustainable recovery going forward. As mentioned before, so we observed actually the airline, the occupancy rates for the airline is not recovering to the pre-COVID level, but the railway station is performing very – railway business is recovering very well. And we’re still seeing a lot of traveling demands here and there. And we didn’t see any statistic on the self-driving, traveling activities, but we strongly believe it should be quite strong. So, therefore no matter during the COVID or post the COVID, we’re still seeing the people are keen to traveling around no matter on the leisure or business side. And in a longer-term, we think the hotels with relatively lower price will be more resilient no matter during COVID or financial crisis or any other crisis condition.

So, basically talking about the like, for example the economic segments will be more resilient, compared to the upscale, and the recent consumption trend was very interesting taking the an example, we observed that people are generally wants to spending a little bit money and to buy a big happiness and people who are willing to spend big chunk of money at this condition and this condition are not very, very high, and therefore, we think that upscale segments will be taking even longer time to recover. For us, we are not only caring about ADR. We care more on building up core competencies and the Intel ecosystem. And we want to provide the benefits to all our partners, no matter our customers and franchisees, in our ecosystem and everyone will be getting benefitted.

So, we think we should be a little bit patient for the long-term growth potential for the long-term market. And we are not only striving to increase the ADR and because it is also very difficult to expect ADR or predict the ADR trends in the future because as there’s a lot of factors, kind of affected ADR movements. Thank you.

Operator: Right. Thank you. Our next question comes from the line of . Please go ahead.

Unidentified Analyst: Thanks for the opportunity. Can you explain how the organization structure supports the developments of the new brands such as Orange 3.0 or Orange Crystal InterCity, are there any problems in the operation of this organizational structure? And how can the management solve them? Thank you.

Jin Hui: Thanks for your questions. I’m very glad you asked about our organizational restructuring. So firstly, I would like to clarify our – it is just one year since we conducted our organizational restructuring since last year. So, I would elaborate more on the purpose of building up this . So, as you may know that one of our core strategy is to fully penetrating in China market in the limited service segment together with our sustainable quality growth strategy. So, by doing this – by setting up this six regional headquarters, we are very happy to see a very initial good outcomes over the last year. The regional headquarters are more close to our franchisees and customers and achieving a higher operational optimization, as well as the synergy.