Net Profit Growth Nearly 70%! Huazhu Added Record Number of New Hotels Last Year, CFO Changed

Ask AI · What are the key drivers behind Huazhu’s turnaround to profitability in overseas operations?

On the evening of March 18, Huazhu Group disclosed its financial performance report for Q4 2025 and the full year of 2025: In 2025, Huazhu achieved revenue of 25.3 billion RMB, a year-on-year increase of 5.9%; net profit attributable to the parent was 5.1 billion RMB, up approximately 66.7%, thanks to growth in domestic operations and positive adjusted EBITDA in overseas segments.

2025 was Huazhu Group’s year with the most new hotel openings in its history, totaling 2,444 new hotels for the year. As of December 31, 2025, Huazhu Group operated 12,858 hotels, of which 12,740 are in China.

Meanwhile, Huazhu Group announced that former CFO Chen Hui has stepped down, effective March 18, with Arthur Yu succeeding as Chief Financial Officer from the same date.

The financial report shows that in Q4 2025, Huazhu Group achieved total revenue of 6.5 billion RMB, an 8.3% increase year-over-year, surpassing the previously announced growth guidance of 2%–6%, mainly due to better-than-expected performance in domestic hotel average occupancy revenue and rapid network expansion. However, seasonal factors caused a 6.3% decrease in revenue quarter-over-quarter. Currently, revenue from Huazhu China hotels accounts for 81% of total revenue.

In Q4 2025, Huazhu Group’s total operating revenue increased by 18.4% year-over-year to 28.1 billion RMB; net profit attributable to the parent was 1.2 billion RMB, a significant increase from 49 million RMB in the same period last year, mainly driven by last year’s foreign exchange losses and increased withholding taxes, as well as a 170.7% YoY growth in net profit from Huazhu China and positive profitability in Huazhu’s overseas operations (recorded an adjusted EBITDA of 329 million RMB, turning profitable year-over-year).

In Q4 2025, among Huazhu China’s top three operational indicators: average daily room rate was 288 RMB, up nearly 4% YoY but down quarter-over-quarter; hotel occupancy rate was 78.4%, down both sequentially and YoY; and the blended average revenue per available room (RevPAR) was 226 RMB, up 1.8% YoY, ending several quarters of decline, though it decreased quarter-over-quarter. During the reporting period, Huazhu opened 406 new hotels, all managed franchise and licensed hotels, and closed a total of 246 hotels.

In recent years, Huazhu has continued to expand into mid-to-high-end and lower-tier markets. The financial report shows that in 2025, the number of Huazhu’s stores in lower-tier markets (fourth-tier and below cities) increased by 30% YoY, with room nights up 36.3% YoY. The number of mid-to-high-end hotels increased by 17.6% YoY.

“Mid-to-high-end is also a key focus market for the past two years and into the future,” said Jin Hui, CEO of Huazhu, at the earnings conference after the financial release. Unlike other brands, Huazhu develops multiple brands simultaneously in first- and second-tier cities, focusing on four key mid-to-high-end brands: All Seasons Grand, Intercity, Crystal, and Mercure. Each brand has its own characteristics, aiming to realize Huazhu’s strategic goal of moving from lagging behind to surpassing competitors in the mid-to-high-end sector by 2030.

In the economy hotel sector, in early February, Huazhu’s Hanting brand officially launched the “Dual-Engine” strategy, introducing a new sub-brand, “Hanting Express,” which emphasizes “light, fast, and cost-effective” offerings, targeting the existing hotel market and minimizing renovation barriers. Jin Hui explained that the economy hotel market, corresponding to the national population, remains China’s most significant and solid market under the current demographic structure, forming the foundation of Huazhu’s overall business. More high-quality properties are being converted into Hanting hotels, and with Chinese consumers’ strong demand for value for money, Hanting Express is an important part of brand upgrading and streamlining.

Based on the current growth in domestic leisure tourism, the recovery of inbound tourism, and the bottoming out of business travel demand, Huazhu’s management remains cautiously optimistic about overall performance in 2026. Huazhu expects total revenue for 2026 to grow between 2% and 6% (or 5% to 9% if excluding overseas operations) compared to 2025. The company plans to open 2,200 to 2,300 new hotels and close 600 to 700 hotels throughout the year. Jin Hui stated that under the lean development strategy, Huazhu’s overall new openings are expected to remain high, with the goal of reaching 20,000 hotels by 2030.

Reporting by: Nandu N Video Reporter Fu Xiaoling