China’s hotel industry is presenting a striking contrast.
On one side, hotel networks continue to reach new highs. Jin Jiang Hotels and H World have both surpassed 10,000 properties, while BTG Homeinns Hotels is approaching the 8,000-hotel mark. Major hotel groups are still accelerating franchise signings, openings, and expansion into lower-tier cities.
On the other side, the shares of several major publicly listed hotel companies have remained under pressure.
As of around July 21, 2026, Jin Jiang Hotels’ stock price had fallen about 38% from its 52-week high, while BTG Homeinns Hotels was down around 35%. H World’s Hong Kong-listed shares had declined about 26%, and SSAW Boutique Hotel Group saw a drop of more than 50%.
Judging solely by their first-quarter 2026 financial results, however, China’s leading hotel groups did not perform poorly.
Jin Jiang Hotels reported a 6.09% year-on-year increase in revenue, while net profit attributable to shareholders surged 280.09%. BTG Homeinns Hotels saw revenue rise 0.66% and attributable net profit increase 18.51%. H World reported an 11.1% increase in revenue, with adjusted net profit growing 38.6%.
RevPAR at Jin Jiang Hotels’ limited-service hotels in mainland China increased 3.68% year on year in the first quarter. But excluding newly opened properties, RevPAR across its 11,175 comparable hotels grew by only 0.71%.
The divergence was even more pronounced at H World. In the first quarter, revenue from managed and franchised hotels increased 20.3% year on year, largely driven by the expansion of its hotel network.
However, among H World’s China hotels that had been open for more than 18 months, same-store RevPAR declined 2.3%, while occupancy fell 2.8 percentage points. During the same period, H World opened 537 new hotels in China and maintained its full-year target of 2,200 to 2,300 new openings.
BTG Homeinns Hotels showed a similar trend. In the first quarter, RevPAR across its entire hotel portfolio increased 0.8%, but RevPAR at mature hotels open for more than 18 months declined 4.0%.
RevPAR at mature midscale and upscale hotels fell 3.9%, while mature hotels under its light-management model dropped 6.7%. All 218 hotels opened during the quarter adopted the franchise model, while revenue from hotel management services increased 13.63%.
Taken together, these figures reveal a widening gap between hotel groups’ revenue growth and franchisees’ profitability.
For hotel groups, every additional opening brings new franchise fees, management fees, opportunities to acquire new loyalty-program members, and greater network scale. For existing properties, however, the arrival of another brand in the same market and price segment often means that customer demand is simply redistributed.
Even when new openings involve the conversion of existing hotels, demand does not automatically grow just because a new sign is installed. Hotel groups can expand their networks through brand conversions, but the overall volume of accommodation demand in a region may not increase at the same pace.
The asset-light model has enabled hotel groups to reduce their investment in properties, but it has not eliminated the underlying risks of hotel investment. Rent, renovation costs, labor expenses, energy costs, and operational volatility are increasingly being borne by the franchisees.
