Atour Lifestyle Holdings Reports Robust Q1 2025 Growth

Atour Lifestyle Holdings Limited ((ATAT)) has held its Q1 earnings call. Read on for the main highlights of the call.

Atour Lifestyle Holdings Limited’s recent earnings call presented a balanced view of the company’s performance, highlighting strong growth in certain areas while acknowledging challenges in others. The sentiment was generally positive, driven by significant expansion in the hotel network and robust retail business growth, although concerns were raised over decreased RevPAR and increased marketing expenses.

Expansion of Hotel Network

In the first quarter of 2025, Atour made significant strides in expanding its hotel network, opening 121 new hotels. This represents a 24.7% increase compared to the previous year, bringing the total number of operational hotels to 1,727, marking a 32.6% year-over-year growth. This expansion underscores Atour’s commitment to strengthening its presence in the hospitality sector.

Strong Retail Business Growth

Atour’s retail business exhibited impressive growth, with GMV reaching RMB 845 million, a 70.9% increase year-over-year. This surge was fueled by enhanced brand strength and customer loyalty, with online channels contributing over 90% of the total GMV. This highlights the company’s successful adaptation to digital retail trends.

Financial Performance Improvement

The company’s financial performance improved significantly, with net revenues for the first quarter of 2025 growing by 29.8% year-over-year. Adjusted net income rose by 32.3% to RMB 345 million, and adjusted EBITDA increased by 33.8% to RMB 474 million, showcasing Atour’s effective financial management and operational efficiency.

Dividend and Share Repurchase Program

In a move to return value to shareholders, Atour announced a cash dividend of USD 0.14 per ordinary share. Additionally, the company launched a 3-year share repurchase program with an aggregate value of up to USD 400 million, reflecting confidence in its long-term growth prospects.

Membership Growth

Atour’s membership base saw substantial growth, with registered individual members surpassing 96 million by the end of the first quarter, a 35.4% increase year-over-year. This growth in membership is indicative of the company’s expanding customer base and brand appeal.

RevPAR Decrease

Despite the positive developments, Atour faced challenges with a 7.2% year-over-year decrease in RevPAR in Q1 2025. Both occupancy and average daily rate declined compared to the previous year, highlighting areas that require strategic attention.

Challenges in Leased Hotels

Revenues from leased hotels decreased by 23.5% year-over-year and 21.6% quarter-over-quarter. This decline was attributed to a decrease in the number of leased hotels due to product mix optimization, indicating a strategic shift in the company’s operations.

Selling and Marketing Expenses Increase

Selling and marketing expenses rose to 14.8% of net revenues in Q1 2025, up from 11.9% in Q1 2024. This increase was mainly due to investments in brand recognition and online channel development, reflecting Atour’s focus on strengthening its market position.

Forward-Looking Guidance

Looking ahead, Atour’s management provided optimistic guidance, anticipating a full-year 2025 total net revenue growth of 25% to 30% compared to 2024. Despite a volatile market environment, the company remains confident in its growth trajectory, supported by its expanding hotel network and robust retail business.

In summary, Atour Lifestyle Holdings Limited’s earnings call painted a picture of a company on a growth path, with strong performances in hotel expansion and retail business. While challenges such as decreased RevPAR and increased marketing expenses were noted, the overall sentiment remains positive, with forward-looking guidance suggesting continued growth and strategic focus.