Atour Lifestyle Holdings Limited ((ATAT)) has held its Q4 earnings call. Read on for the main highlights of the call.
Atour Lifestyle Holdings Limited’s recent earnings call exuded a positive sentiment, underscored by substantial network and retail business expansion, record net revenue growth, and improved gross margins. Despite these achievements, challenges such as declines in RevPAR and ADR, along with a decrease in profit margin, were noted as areas of concern.
Strong Network Expansion
In 2024, Atour Lifestyle Holdings Limited made significant strides in expanding its network by opening 471 new hotels and signing 670 new projects, surpassing initial targets. This expansion brought the total number of hotels in operation to 1,619, marking a 33.8% year-over-year growth.
Retail Business Growth
Atour’s retail business experienced remarkable growth, with the full-year GMV reaching RMB 2.59 billion, reflecting a 127.7% year-over-year increase. This sector contributed 30% to the group’s revenue in 2024, highlighting its growing importance within the company’s overall business strategy.
Record Net Revenue Increase
For the full year 2024, Atour reported a net revenue increase of 55.3% year-over-year, amounting to RMB 7,248 million. This impressive growth was driven by the expansion of manachised hotels and the booming retail business.
Improved Gross Margins
The company saw a notable improvement in gross margins, with the hotel business margin rising to 37.5% in Q4 2024 from 29.9% in the same period of 2023. Similarly, the retail business gross margin increased to 49.6% from 43.7%.
RevPAR and ADR Decline
Despite the positive growth, Atour faced challenges with RevPAR and ADR, which reached 94.1% and 96% of the 2023 levels, respectively. These declines were attributed to high comparison base effects.
Decline in Leased Hotel Revenue
Revenue from leased hotels decreased by 15.9% year-over-year in Q4 2024. This decline was primarily due to a reduction in the number of leased hotels as part of the company’s product mix optimization strategy.
Decrease in Adjusted Net Profit Margin
The adjusted net profit margin for 2024 was 18%, a decrease of 1.4 percentage points year-over-year. This drop was partly due to a decline in RevPAR and increased marketing expenses.
Forward-Looking Guidance
Atour Lifestyle Holdings outlined an optimistic outlook for the future, setting a target of a 25% revenue increase for 2025. The company plans to open 500 new hotels and further expand its retail business. Additionally, Atour aims to develop its upscale hotel brands and reach a strategic goal of 2,000 premier hotels by 2025.
In summary, Atour Lifestyle Holdings Limited’s earnings call highlighted a positive trajectory with significant growth in network and retail sectors, alongside record net revenue and improved margins. However, challenges such as declines in RevPAR and ADR, and a decrease in profit margin, were noted. The company’s forward-looking guidance reflects confidence in continued expansion and strategic development.