GreenTree Hospitality Group Ltd. Reports Fourth Quarter and Fiscal Year 2024 Financial Results

• Total revenues decreased by 18.2% year over year to RMB304.5 million (US$41.7 million)^[1].
• Net income was RMB-72.8million (US$-10.0 million)^[1] compared to RMB8.6 million for the fourth quarter of 2023.
• Adjusted net income^[2] was RMB77.3 million (US$10.6 million)^[1] compared to RMB60.9 million for the fourth quarter of 2023.
• Cash from operations increased year over year to RMB74.2 million (US$10.2 million)^[1].

Fourth Quarter of 2024 Operational Highlights

Hotels

• A total of 4,425 hotels with 321,282 hotel rooms were in operation as of December 31, 2024.
• The Company opened 143 hotels and had a pipeline of 1,214 hotels contracted for or under development as of December 31, 2024.
• The average daily room rate was RMB169, a decrease of 4.6% from RMB177 in the fourth quarter of 2023.
• The occupancy rate was 68.6%, down from 72.4% in the fourth quarter of 2023.
• Revenue per available room, or RevPAR, was RMB116, a 9.6% year-over-year decrease.

• A total of 182 restaurants were in operation as of December 31, 2024.
• The AC (average check) was RMB46, a 11.0% year-over-year decrease.
• The ADT (average daily tickets) was 93, down from 99 in the fourth quarter of 2023.
• The ADS (average daily sales per store) was RMB4,234, a decrease of 16.8% from RMB5,090 in the fourth quarter of 2023.

In our hotel business we are simultaneously accelerating the opening of new hotels, with a planned 480 in 2025, and upgrading our existing portfolio with an absolute focus on quality to ensure higher standards of products and services. We believe that the rejuvenation of our portfolio that was slowed down by the pandemic will be completed by the Summer of 2026. While Midscale remains our core segment, hotel openings in 2024 and our pipeline highlight our strategic commitment to expanding our Mid-to-upscale segment where we expect growth over the next two years to deliver significant economies of scale. Finally, we will continue the phased closure of leased and managed hotels, retaining only select flagship properties in key cities to serve as showcases of our capabilities for prospective franchisees.

The strategic transformation of our restaurant business made further progress on our two priorities. At the end of the quarter, franchised and managed stores accounted for almost 90% of all stores up from 78% a year ago , and street stores that benefit from more stable consumer traffic accounted for 50% of all stores, up from 40% a year ago. Additionally, we have been rightsizing many of our stores, reflecting the new economic reality, to improve overall profitability. We believe we now have a strong foundation to build on and will grow the overall number of restaurants in 2025 with a particular focus on franchised and managed as well as street stores.

Hotel revenues were RMB240.2 million (US$32.9 million)^[1], a 17.1% year-over-year decrease. The decrease was mainly attributable to a 9.8% decrease in F&M hotels' Revpar and the closure of 12 L&O hotels in 2024 while revenues a year ago benefited from a one-time revenue recognition of requisitioned rooms during COVID and a one-time revenue recognition due to a successful lawsuit against sublease.

Restaurant revenues were RMB65.1 million (US$8.9 million)^[1], a 25.8% year-over-year decrease. The decrease was mainly due to the closure of L&O stores, and a 16.8% decrease in ADS.

Total revenues for the year were RMB1,343.4 million (US$184.1 million)^[1], a 17.4% year-over-year decrease.

Total revenues from leased-and-operated, or L&O, hotels and restaurants were RMB119.3 million (US$16.3 million)^[1], a 31.7% year-over-year decrease.

Total revenues from L&O hotels were RMB91.0 million (US$12.5 million)^[1], a 27.5% year-over-year decrease. The decrease was mainly attributable to the closure of 12 L&O hotels in 2024 while revenues a year ago benefited from a one-time revenue recognition of requisitioned rooms during COVID and a one-time revenue recognition due to a successful lawsuit against sublease. Same L&O hotel revenues in the fourth quarter of 2024 decreased by 2.4% year over year.

Total revenues from L&O restaurants were RMB28.5 million (US$3.9 million)^[1], a 40.8 % year-over-year decrease. The decrease was mainly due to the closure of 24 L&O stores during the year and offset by 47.1% increase in ADS. Same L&O store revenues in the fourth quarter of 2024 decreased by 3.1% year over year.

Total revenues from L&O hotels and restaurants for the year were RMB596.6 million (US$81.7 million)^[1], a 24.3% year-over-year decrease.

Total revenues from franchised-and-managed, or F&M, hotels and restaurants were RMB152.9 million (US$21.0 million)^[1], a 7.1% year-over-year decrease.

Total revenues from F&M hotels were RMB148.2 million (US$20.3 million)^[1], a 9.0% year-over-year decrease, mainly due to a 9.8% decrease in F&M hotels' Revpar.

Total revenues from F&M restaurants were RMB4.8 million (US$0.7 million)^[1], a 182.0% year-over-year increase. The increase was mainly due to the opening of 39 F&M restaurants during the year.

Total revenues from F&M hotels and restaurants for the year were RMB635.4 million (US$87.0 million)^[1], a 9.9% year-over-year decrease.

Total revenues from wholesale and others were RMB32.3 million (US$4.4 million)^[1], a 1.6% year-over-year decrease. Total revenues from wholesale and others for the year were RMB111.4 million (US$15.3 million)^[1], a 17.0% year-over-year decrease.

Total operating costs and expenses

Operating costs of the hotel business were RMB139.9 million (US$19.2million)^[1], a 9.5% year-over-year decrease. The decrease was mainly attributable to the closure of 12 L&O stores in 2024, which resulted in lower rental, consumable, food and beverage, and staff related costs.

Operating costs of the restaurant business were RMB59.9million (US$8.2 million)^[1], a 10.5% year-over-year decrease. The decrease was mainly due to the closure of 24 L&O stores.

For the year, operating costs were RMB822.6 million (US$112.7 million)^[1], representing an 13.2% decrease.

Selling and marketing expenses were RMB17.6 million (US$2.4 million)^[1], a 58.9% year-over-year increase.

Selling and marketing expenses of the hotel business were RMB13.5 million (US$1.8 million)^[1], a 61.7% year-over-year increase.

Selling and marketing expenses of the restaurant business were RMB4.1 million (US$0.6 million)^[1]..

For the year, selling and marketing expenses were RMB67.6 million (US$9.3 million)^[1], a 5.6% decrease.

General and administrative, or G&A expenses were RMB43.0 million (US$5.9 million)^[1], a 25.8% year-over-year decrease.

G&A expenses of the hotel business were RMB39.7 million (US$5.4 million)^[1], a 20.1% year-over-year decrease. The decrease was mainly due to lower consulting fees, lower bad debts from accounts receivables, and lower G&A staff related expenses.

G&A expenses of the restaurant business were RMB3.3 million (US$0.5 million)^[1], a 60.0 % year-over-year decrease. The decrease was mainly due to lower staff related expenses.

For the year, G&A expenses were RMB182.6 million (US$25.0 million)^[1], a 12.4% year-over-year decrease.

Impairment loss of goodwill were RMB81.0million (()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});