Atour Retail May Beat Estimates; Hotel OTA Performance Diverges

Overview

This research report provides an earnings preview for the Chinese hotel and online travel agency (OTA) sector for the second quarter of 2026. Goldman Sachs believes that amid rising airfare prices suppressing travel demand, revenue and profit growth across covered companies are generally slowing. Among them, Atour Lifestyle, driven by explosive growth in its retail and supply chain businesses, is expected to be the only name to beat estimates, while other companies largely meet market expectations. The report emphasizes that despite low fares benefiting demand recovery, Q3 faces challenges from a high base and extreme weather. Investors need to closely monitor each company's guidance for H2 RevPAR, store expansion pace, and changes in commission rates under Ctrip's new merchant cooperation model.

Core views

Atour's retail business emerges as the biggest highlight in 2Q26, likely driving overall results to beat estimates. Goldman Sachs forecasts Atour's 2Q26 revenue to grow 38% YoY, primarily driven by strong performance in retail sales (+57% YoY) and supply chain business (+40% YoY), while hotel business revenue also maintains steady growth of 25%. Online retail tracking data shows significant GMV growth for its Deep Sleep series bedding on Tmall/Taobao platforms, making it the category leader. Although the increasing share of retail business may cause EBITDA margin to dip slightly by 1 percentage point year-over-year to approximately 31%, there is upside risk to management's full-year retail revenue growth guidance of 30-35%. In contrast, Huazhu's 2Q26 revenue is expected to grow only 6%, mainly dragged down by its overseas DH business; Jinjiang and BTG Hotels' EBITDA growth is expected to be +4% and -2% respectively, showing stable performance. Hotel industry RevPAR growth slows, with declining occupancy being the main drag. According to STR data, China's hotel industry RevPAR declined by 2% YoY in June, leading to an overall 2Q26 increase of only 2% (down from +3% in 1Q26). This is mainly due to a 1 percentage point year-over-year decline in occupancy, while average daily rate (ADR) remained resilient with a 3% increase. High-end hotels performed better than mid-scale hotels. Although Huazhu and Atour stated at their end-of-June corporate days that they maintained positive RevPAR growth in 2Q26, Goldman Sachs models only provide a modest growth expectation of 0-1%, reflecting efforts to offset same-store declines through room upgrades and new brand introductions. For 3Q26, although falling airfare prices benefit demand, high-frequency data for July-August shows that recovery still has bumps, mainly constrained by the high base starting from September last year and adverse weather such as Typhoons "Noul" and "Dolphin" affecting Guangdong and East China regions. OTA platform results are expected to align with conservative guidance, but profit margins face short-term pressure. Both Ctrip and Tongcheng provided conservative guidance for 2Q26 revenue growth of 3-8% YoY. Ctrip's overseas Trip.com platform continues to maintain high growth of over 50%, but domestic transportation ticketing business is expected to decline 20-30% YoY, and it needs to recognize a 122 million RMB reduction in hotel deposit refund income, impacting hotel revenue for the quarter by about 2%. Additionally, antitrust investigations may result in a one-time fine of 5.2 billion RMB, although gains from fair value changes due to MakeMyTrip's stock price rise may offset this. For Tongcheng, adjusted net profit is expected to be 835 million RMB. Both companies' EBIT margins are expected to decline year-over-year; Ctrip drops 3.3 percentage points to 28.2%, and Tongcheng drops 0.6 percentage points to 19.4%, mainly due to operational deleveraging and personnel adjustments. Store expansion slows but reserves are sufficient; prefer names with structural growth drivers amidst valuation divergence. Year-to-date, industry new hotel supply grew 5% YoY, lower than the 7% growth in the same period last year. Huazhu opened approximately 500 new hotels in 2Q26, and Atour opened approximately 100. Although slower than previous periods, the pipeline of signed stores continues to increase, indicating that signing has not significantly decelerated. In terms of valuation, Huazhu and Atour currently have FY26E EV/EBITDA multiples of 9.0x and 8.9x respectively, with free cash flow yields of 6.8% and 5.9%. They have committed to distributing all FCF for dividends or buybacks, making their valuations attractive. Among OTAs, Goldman Sachs prefers Ctrip due to its strong execution and long-term upside from overseas expansion. Currently, Ctrip's valuation discount relative to Booking.com is close to 40%, at a historical high. Based on the latest trends, Goldman Sachs has fine-tuned earnings forecasts and lowered target prices for Tongcheng to 24.5 yuan, Jinjiang to 25.0 yuan, and BTG Hotels to 15.5 yuan, while maintaining unchanged target prices for Ctrip, Huazhu, and Atour.

Analysis framework

The research report adopts a comprehensive analytical framework of 'high-frequency data verification + segment business breakdown + relative valuation comparison'. First, it uses STR industry data and self-developed online retail GMV trackers to verify hotel RevPAR and Atour's retail performance in real-time, compensating for the lag in financial reports. Second, it breaks down company revenues into segments such as hotel operations, retail/supply chain, and overseas business, combining management guidance and high-frequency trends for differentiated predictions rather than simple linear extrapolation. Finally, at the valuation level, it applies the SOTP (Sum-of-the-Parts) method, using EV/EBITDA or P/E multiples for core businesses and book value or independent valuation for non-core investments, and compares current pricing safety margins against historical valuation ranges of global peers (such as Booking).

Methodology notes

• Company Fundamentals & Financial FrameworkVolume-price decomposition

  RevPAR = ADR × Occupancy Rate

  The core hotel industry indicator RevPAR can be decomposed into two factors: Average Daily Rate (ADR) and Occupancy Rate. By distinguishing the changes in these two factors, this report identifies that the slowdown in industry RevPAR in 2Q26 was mainly caused by a decline in occupancy rather than a drop in prices, thereby judging that weak demand is the main contradiction, while pricing power still retains resilience.

• Valuation MethodSOTP Segment Valuation

  Sum-of-the-Parts Valuation

  For diversified companies (such as Ctrip and Atour), different business segments (core hotel/OTA, retail, overseas, investment portfolio) are assigned the most appropriate valuation multiples or methods, which are then summed to derive the target price. This method more accurately reflects the true value of each business line, avoiding the masking of structural differences by a single multiple.

• Industry/Industrial Analysis FrameworkPenetration Rate S-Curve

  Chain Ratio and Industry Consolidation

  The report mentions 'industry consolidation accompanied by rising chain penetration,' implying S-curve analysis logic: when the industry's chain penetration rate is in a rapid climbing phase, leading enterprises can achieve unit growth exceeding the industry average through asset-light franchise models. Even if single-store RevPAR is under pressure, total volume growth can still be maintained. This is an important industrial logic supporting the long-term valuation of Huazhu and Atour.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Atour Lifestyle Holdings (ATAT)

  Beneficiary: Rapid growth in retail and supply chain businesses; 2Q26 results expected to beat estimates

  Strengths

  Strong retail GMV, hit effect of Deep Sleep series, sufficient store expansion pipeline, FCF yield of 5.9%

  Weaknesses

  Retail business drags down overall margins, mid-scale market expansion may dilute RevPAR

  Comparison

  Compared to Huazhu, Atour's retail incremental growth is more significant; compared to traditional hotels, it has stronger consumer attributes

  Risks

  Intensified online competition in retail leading to profitability volatility, sluggish recovery in business travel demand, fierce competition among franchisees

• Trip.com Group (TCOM)

  Beneficiary: Overseas Trip.com platform grows >50%; clear long-term upside space

  Strengths

  Strong execution, high overseas growth, valuation discount at historical highs, new commission model optimizes supply

  Weaknesses

  Decline in domestic transportation ticketing, risk of antitrust fines, short-term EBIT margin pressure

  Comparison

  Superior to Tongcheng in overseas layout and scale effects; valuation discount relative to Booking is nearly 40%

  Risks

  Regulatory risks, intensified competition (especially Douyin), weaker-than-expected recovery in outbound tourism

• H World Group (HTHT)

  Neutral to Positive: Reasonable valuation, benefits from consumption upgrade and industry consolidation

  Strengths

  Leading product strength, FCF yield of 6.8%, commitment to fully distribute FCF, improvement in China business mix

  Weaknesses

  Overseas DH business drags performance, 2Q26 revenue growth only 6%

  Comparison

  Weaker retail elasticity than Atour, but main business is more stable; more cost-effective valuation than Jinjiang/BTG

  Risks

  Macroeconomic weakness causing RevPAR decline, restricted financing channels for franchisees, DH cash burn

• Tongcheng Travel Holdings

  Neutral: Results align with conservative guidance, but profit margins under pressure

  Strengths

  High dependence on WeChat traffic, extensive coverage of lower-tier markets

  Weaknesses

  Risk of declining take rate for transportation ticketing, slight margin decline due to personnel adjustments, valuation controversy due to reliance on Tencent ecosystem

  Comparison

  Domestic ticketing growth outperforms Ctrip, but lacks overseas presence; valuation multiples lower than Ctrip

  Risks

  Inability to share in ASP increases for transportation, weak macro environment, changes in Tencent relationship

Key data

• Atour 2Q26E Retail Revenue Growth+57% YoYCore factor driving overall revenue to beat estimates; Deep Sleep series bedding GMV ranks first in category
• China Hotel Industry 2Q26 RevPAR Growth+2% YoYSlowed from +3% in 1Q26; June single month -2% YoY; occupancy down 1ppt, ADR +3%
• Ctrip 2Q26E EBIT Margin28.2%Down 3.3 percentage points YoY, impacted by operational deleveraging and 122 million RMB deposit refund reduction
• Huazhu/Atour FY26E EV/EBITDA9.0x / 8.9xCorresponds to FCF yields of 6.8%/5.9%; valuation is at a reasonable to low range
• Ctrip vs Booking FY26E P/E DiscountApprox. 40%At the widest end of historical valuation spreads; relative valuation is attractive

Impact & implications

The report believes that the explosive growth of Atour's retail business validates the scalability of the 'hotel + lifestyle' business model, providing it with a second growth curve beyond traditional hotel cycles. This may prompt the market to re-evaluate its valuation system. For the OTA sector, Ctrip's transition to a new merchant tiered cooperation model may temporarily disrupt effective commission rates in the short term, but in the long run, it helps optimize supply structure. The widening gap in valuation compared to global peers means that if overseas business continues to deliver high growth, there is room for valuation repair. Meanwhile, the阶段性 (periodic) pressure on industry RevPAR under a high base, combined with uncontrollable factors such as extreme weather, suggests that investors should maintain rational expectations for 3Q26 earnings elasticity. The focus should shift from short-term data fluctuations to the enterprise's determination regarding full-year guidance and its ability to realize long-term structural advantages.

Risks

• Weak macroeconomic conditions leading to hotel RevPAR recovery below expectations
• Intensified competition from platforms like Douyin eroding OTA market share and commission rates
• Extreme weather (e.g., typhoons) and high base effects suppressing 3Q26 demand rebound
• Atour's retail business faces intense online competition, increasing profitability volatility
• Ctrip's antitrust investigation may bring large one-time fines
• Tightening financing channels for franchisees delaying hotel group store expansion pace

What to watch

• Whether each company adjusts its 3Q26 RevPAR and full-year store growth guidance
• The actual impact of Ctrip's new merchant tiered cooperation model on effective hotel commission rates
• Whether Atour's retail business GMV and margin trends can continue to beat estimates
• The recovery slope of high-frequency travel data after typhoons in July-August
• The growth rate and loss narrowing progress of Ctrip's overseas Trip.com platform