Store proportion and revenue contribution are inverted! Huazhu's new CFO takes office and directly faces the structural dilemma

Ask AI · Why don’t high shares of light-asset store formats translate into stronger revenue contributions?

On March 18, Huazhu Group announced that Chen Hui would step down as the company’s Chief Financial Officer. Arthur Yu (Yu Junrui) will take over as Executive Vice President and will assume the role effective March 18.

Based on the details of this personnel change, the incoming CFO has financial management experience from companies such as Baozun e-commerce and Jaguar Land Rover. In taking up the position, it is expected to help Huazhu Group improve its global financial control and operating governance system.

At the same time as the management reshuffle took effect, Huazhu Group also released its full-year 2025 financial performance announcement on the same day, fully disclosing data such as the operating scale, revenue structure, and profitability performance over the past year.

The financial report shows that, as of the end of 2025, Huazhu Group had 12,858 hotels in operation globally, with 1.264 million rooms in operation.

In 2025, revenue increased 16.4% year over year to RMB 108.1 billion (RMB, the same below), and the overall transaction volume maintained steady growth.

In the same period, revenue increased 5.9% year over year to RMB 25.3 billion. Of this, revenue from the Legacy-Huazhu (Huazhu China) segment was RMB 20.5 billion, up 7.9% year over year; revenue from the Legacy-DH (Huazhu International) segment was RMB 4.8 billion, down 1.8% year over year.

In terms of regional performance, Huazhu China remains the foundation of revenue, while its Europe business is still in a recovery and adjustment stage.

As can be seen in the split business performance, Huazhu Group’s light-asset transformation has achieved significant results. During the period, revenue from leased and owned hotels was RMB 12.9 billion, down 6.5% year over year; revenue from managed, franchise, and franchised hotels was RMB 11.7 billion, up 23.1% year over year.

However, it is worth noting that as of the end of 2025, Huazhu Group had a total of 573 leased and owned hotels, accounting for about 4%; and a total of 12,285 managed, franchised, and franchised hotels, accounting for as high as 96%.

But in terms of revenue contribution, the revenue from the owned, heavy-asset segment makes up more than half of total revenue, which stands in sharp contrast to the segment’s share of store count. This also reflects that while the group has rapidly expanded the scale of light assets, operations still rely heavily on the heavy-asset segment.

On the profitability side, in 2025, net profit attributable to Huazhu Group was RMB 5.1 billion, up 66.7%, mainly supported by Huazhu China’s 39.4% year-over-year growth and the positive earnings contribution from Huazhu International. In the same period, adjusted net profit was RMB 4.9 billion, up 32.9%.

As core assessment indicators for the hotel industry, Huazhu Group’s two major core segments show differentiated trends in operational performance.

The financial report shows that in 2025, Huazhu China’s daily average rate (ADR) was RMB 290, up 0.2% year over year; occupancy rate was 80.0%, down 1.2 percentage points year over year; and average revenue per available room (RevPAR) was RMB 232, down 1.3% year over year. Overall, the domestic market continued to operate steadily.

By contrast, Huazhu International demonstrated stronger recovery resilience. During the period, the daily average rate (ADR) was 116 euros, up 1.4% year over year; occupancy rate was 70.5%, up 4.4 percentage points year over year; and average revenue per available room (RevPAR) was 82 euros, up 8.2% year over year.

“Legacy-DH’s average revenue per available room increased 8.2% year over year in 2025. Looking ahead to 2026, we will continue to enhance hotel operating performance, focus on cost reduction and efficiency improvements, optimize our asset structure, and further refine the positioning and value proposition of our core brands,” said Huazhu Group’s Chief Executive Officer, Jin Hui.

For 2026, Huazhu Group has already provided clear performance and expansion guidance.

For full-year 2026, expected revenue will grow by 2% to 6% compared with 2025; if DH is not included, it will grow by 5% to 9%. Revenue from managed, franchise, and franchised hotels is expected to grow by 12% to 16% compared with 2025. In terms of store development, the company expects to open 2,200 to 2,300 hotels and close 600 to 700 hotels.

Market participants believe that, against the backdrop of an imbalance in light- and heavy-asset structures and differing recovery timetables for domestic and overseas businesses, after the appointment of the new CFO, the focus will be on key tasks such as optimizing the revenue mix and improving financial efficiency, helping the company enhance the quality of its operations.

As of the close of trading on the evening of March 20, Huazhu Group-S was at HK$40.6 per share, up slightly 0.35%, with a total market capitalization of HK$126.1 billion.