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Atour's Q1 2026: A Journey of Growth and Innovation

Navigating China's Evolving Consumer Landscape

Entering 2026, China's service consumption sector is undergoing a profound transformation. The focus is shifting from sheer expansion to enhancing quality and value, driven by an increasing consumer demand for superior experiences. Government policies are refining to support this evolution, fostering a more stable and rational competitive environment. This backdrop presents significant opportunities for companies that prioritize innovation and a 'User First' philosophy.

Robust Performance in Hotel Operations

Atour's hotel division demonstrated strong sequential improvement in the first quarter of 2026. The company's RevPAR (Revenue Per Available Room) saw positive year-over-year growth, primarily fueled by a steady rise in Average Daily Rate (ADR). This performance underscores a healthy return to value-based competition and the increasing strength of Atour's brand equity. By the end of Q1, Atour had expanded its network by 110 new hotels, bringing the total to 2,088 operational properties, with a robust development pipeline of 751 projects.

Advancing Through Brand Differentiation and Product Excellence

Atour continues to pioneer and lead in the upper-midscale hotel segment with its differentiated brands. Atour 3.6, the latest product offering, has received positive market feedback, validating its competitive edge. Atour Origin is expanding the possibilities within the upper-midscale segment, integrating cultural elements and refined services, achieving RevPAR exceeding RMB 400. For the upscale market, Sahe Hotel is gaining visibility and attracting a diverse customer base, with RevPAR over RMB 910 and ADR surpassing RMB 1000. Atour Lite is also steadily growing, appealing to younger users and business travelers, with its 3.3 version demonstrating stronger pricing power.

Sustained Momentum in the Retail Business

Atour's retail business maintained impressive growth in Q1 2026, with revenue reaching RMB 1,071 million, marking a 54.4% year-over-year increase. This growth is attributed to strong performance in core categories, successful product innovation, and a deeper understanding of user needs, particularly in sleep solutions. Atour Planet continues to lead the bedding category on major platforms, with its Deep Sleep series of pillows and comforters consistently achieving high sales and positive user feedback. The company's methodology of transforming user sensations into measurable technical standards drives continuous product improvement.

Expanding Membership and ESG Commitments

By the end of Q1, Atour's registered individual members reached 116 million, a 20% increase from the previous year. The company focuses on deepening the synergy between its hotel and retail businesses to enhance membership value, exploring partnerships to expand quality lifestyle experiences. Atour is also committed to ESG principles, as detailed in its 2025 ESG report. The company actively engages in community support, notably through the Atour Foundation and programs assisting frontline housekeeping staff, reflecting its mission to foster goodwill and warmth.

Solid Financial Performance and Shareholder Returns

Atour Lifestyle Holdings reported net revenues of RMB 2,811 million for Q1 2026, a 47.5% year-over-year increase. This growth was driven by managed hotels and retail businesses, despite a decrease in leased hotels due to portfolio optimization. Gross profit for hotel businesses grew by 29.5% to RMB 550 million, while retail gross profit increased by 58.3% to RMB 564 million. The adjusted net profit margin was 17.4%, and adjusted EBITDA margin increased to 25.5%. The company declared a cash dividend of approximately US$72 million and plans to continue its comprehensive shareholder return policy, targeting a 100% payout ratio based on GAAP net profit.

Strategic Outlook and Operational Adjustments

Atour maintains a cautiously optimistic outlook for Q2 RevPAR, acknowledging market volatility but also the positive impact of policies supporting service consumption. The company is not pursuing short-term performance aggressively but is focused on expanding its reach to business and leisure travelers and refining services to be a reliable choice. In response to a higher pace of hotel closures in Q1, attributed to carry-over projects from the previous year, the full-year closure target remains at 80 hotels. Atour is implementing long-term mechanisms and support for older hotels to enhance their competitiveness and is maintaining its full-year hotel opening target, emphasizing quality-led expansion in core cities and promising growth markets.