The Rise of Affordable Hospitality: H World’s Ambitious Expansion in China
June 18, 2025, 5:59 am
Location: United States, Maryland, North Bethesda
Employees: 10001+
Founded date: 1965
Total raised: $251K
In the bustling world of hospitality, a new player is making waves. H World Group, a major hotelier based in Shanghai, is set to revolutionize budget travel in China. With plans to add 9,000 hotels by 2030, the company is betting on the growing demand for affordable accommodations. This ambitious expansion comes at a time when the Chinese economy faces challenges, but H World is determined to carve out its niche.
Founded in 2005, H World has grown rapidly. The company, formerly known as China Lodging Group, operates over 11,600 properties across various brands. Its strategy is clear: dominate the budget hotel segment. The company’s chief strategy officer envisions doubling the number of hotels in China within five years. This is not just a dream; it’s a calculated move in a competitive landscape.
The hotel market in China resembles a funnel. At the top, luxury hotels attract a small crowd. As you move down, budget hotels capture the bulk of travelers. H World aims to fill this gap. The company’s average room rate stands at RMB 272 (about USD 38.1), a price point that appeals to many. In a country where the economy is under pressure, affordability is key.
China’s economic landscape is shifting. The property market is in decline, and consumer confidence is shaky. Despite a year-on-year growth of 5.4% in the first quarter, deflation looms large. The travel industry is growing, but it’s not without its challenges. A recent survey revealed that 33% of hotels in Greater China expect room rates to drop in 2025. This is a stark contrast to other regions in Asia, where expectations are more optimistic.
H World’s strategy includes closing underperforming hotels. The company plans to shut down 500 to 600 locations while adding 2,300 new ones in 2025 alone. This approach allows H World to streamline operations and focus on quality. Maintaining high standards is crucial, especially as the number of franchisees grows. Over 90% of H World’s hotels are built by franchisees, but they are managed by the company’s trained professionals. This “manachised” model ensures consistency across properties.
Competition is fierce. Local chains like Atour Lifestyle Holdings are also expanding, with plans to open 500 hotels this year. International players like Hilton and Marriott are eyeing the Chinese market as well. Hilton aims to open 600 midscale Hampton locations by 2034, while Marriott has a significant presence in the country. The race is on, and H World is determined to stay ahead.
Despite the challenges, H World’s revenue is on the rise. In the first quarter, the company reported a 2.2% increase in revenue, reaching RMB 5.4 billion (USD 756 million). Net profit surged by 35.7% to RMB 894 million (USD 125.2 million). This growth is a testament to the company’s resilience in a turbulent market.
H World’s expansion is not just about numbers. It’s about meeting the needs of a changing consumer base. As business travel evolves, companies are cutting budgets. H World’s affordable offerings cater to this trend. The company’s Ji and Intercity brands are designed for cost-conscious travelers, including investment bankers who are now opting for budget-friendly stays.
The future looks bright for H World. The company’s vision is ambitious, but it’s grounded in reality. The hotel market in China is evolving, and H World is positioning itself as a leader in the budget segment. The goal is clear: to cover China with a network of affordable hotels.
As the company moves forward, it must navigate the complexities of the market. The ongoing US-China trade tensions and a sluggish job market pose risks. However, H World remains optimistic. The company has not revised its guidance for the year, indicating confidence in its strategy.
In conclusion, H World Group is on a mission to reshape the hospitality landscape in China. With plans to add thousands of hotels and a focus on affordability, the company is poised for success. The road ahead may be challenging, but H World is ready to meet the demands of a changing market. As the saying goes, “Fortune favors the bold.” H World is certainly bold, and its journey is just beginning.
Founded in 2005, H World has grown rapidly. The company, formerly known as China Lodging Group, operates over 11,600 properties across various brands. Its strategy is clear: dominate the budget hotel segment. The company’s chief strategy officer envisions doubling the number of hotels in China within five years. This is not just a dream; it’s a calculated move in a competitive landscape.
The hotel market in China resembles a funnel. At the top, luxury hotels attract a small crowd. As you move down, budget hotels capture the bulk of travelers. H World aims to fill this gap. The company’s average room rate stands at RMB 272 (about USD 38.1), a price point that appeals to many. In a country where the economy is under pressure, affordability is key.
China’s economic landscape is shifting. The property market is in decline, and consumer confidence is shaky. Despite a year-on-year growth of 5.4% in the first quarter, deflation looms large. The travel industry is growing, but it’s not without its challenges. A recent survey revealed that 33% of hotels in Greater China expect room rates to drop in 2025. This is a stark contrast to other regions in Asia, where expectations are more optimistic.
H World’s strategy includes closing underperforming hotels. The company plans to shut down 500 to 600 locations while adding 2,300 new ones in 2025 alone. This approach allows H World to streamline operations and focus on quality. Maintaining high standards is crucial, especially as the number of franchisees grows. Over 90% of H World’s hotels are built by franchisees, but they are managed by the company’s trained professionals. This “manachised” model ensures consistency across properties.
Competition is fierce. Local chains like Atour Lifestyle Holdings are also expanding, with plans to open 500 hotels this year. International players like Hilton and Marriott are eyeing the Chinese market as well. Hilton aims to open 600 midscale Hampton locations by 2034, while Marriott has a significant presence in the country. The race is on, and H World is determined to stay ahead.
Despite the challenges, H World’s revenue is on the rise. In the first quarter, the company reported a 2.2% increase in revenue, reaching RMB 5.4 billion (USD 756 million). Net profit surged by 35.7% to RMB 894 million (USD 125.2 million). This growth is a testament to the company’s resilience in a turbulent market.
H World’s expansion is not just about numbers. It’s about meeting the needs of a changing consumer base. As business travel evolves, companies are cutting budgets. H World’s affordable offerings cater to this trend. The company’s Ji and Intercity brands are designed for cost-conscious travelers, including investment bankers who are now opting for budget-friendly stays.
The future looks bright for H World. The company’s vision is ambitious, but it’s grounded in reality. The hotel market in China is evolving, and H World is positioning itself as a leader in the budget segment. The goal is clear: to cover China with a network of affordable hotels.
As the company moves forward, it must navigate the complexities of the market. The ongoing US-China trade tensions and a sluggish job market pose risks. However, H World remains optimistic. The company has not revised its guidance for the year, indicating confidence in its strategy.
In conclusion, H World Group is on a mission to reshape the hospitality landscape in China. With plans to add thousands of hotels and a focus on affordability, the company is poised for success. The road ahead may be challenging, but H World is ready to meet the demands of a changing market. As the saying goes, “Fortune favors the bold.” H World is certainly bold, and its journey is just beginning.