Chinese major hotelier H World Group aims to add about 9,000 hotels by 2030, mostly on its home turf, betting that demand for affordable stays will continue to grow as the domestic economy faces headwinds.
Headquartered in Shanghai, the group has over 20 hotel brands—in China and overseas—with 11,685 properties as of the end of March, up 538 locations from the previous quarter. In 2025 alone, it plans to add 2,300 hotels, while also shutting down between 500 to 600 underperforming properties, according Jihong He, the company’s chief strategy officer.
The group aims to keep a similar pace of expansion through 2030 and potentially longer.
“In five years time, we would like to double our number of hotels in China,” He told Nikkei Asia in an interview. “After we reach 20,000 hotels, our next goal is 30,000. Our vision is to cover China with our product offering as much as possible.”
By hotel count, H World trails behind the country’s top hotelier, Jin Jiang International, which operated 13,513 hotels as of the end of March. However, the Shanghai municipal government-owned hospitality group added only 97 hotels in the first quarter, meaning H World is poised to overtake Jin Jiang sometime next year if both groups continue to expand at their current pace.
Formerly known as China Lodging Group, H World was founded in 2005 by Qi Ji, who also co-founded travel booking platform Trip.com Group and the Home Inns hotel chain. The Nasdaq and Hong Kong-listed company began with its budget brand HanTing before expanding into the mid-tier segment with its Ji and Orange brands. It also manages several brands of the French hotel group Accor in China, including Mercure and Ibis, and ventured overseas with its 2020 acquisition of Germany’s Steigenberger Hotels.
H World’s expansion comes amid growing headwinds in the Chinese economy, including a property market downturn, a weak job market, and ongoing trade tensions with the US. While the economy grew by 5.4% year-on-year (YoY) in the first quarter, the consumer price index has remained in negative territory since February, extending deflationary pressures that have persisted for the past two years as supply continues to outpace demand. China’s travel industry is growing but it remains vulnerable to intense price competition.
According to a survey by real estate consultant JLL last October, 33% of hotels in Greater China expected the average daily room rate to worsen YoY in 2025, a higher ratio than any other Asian region. In comparison, just 2% of hotels in North Asia and 9% in Southeast Asia anticipated a drop in room rates.
H World’s average room rate, excluding Steigenberger, was RMB 272 (USD 38.1) in the first quarter, down 2.6% from a year ago.
He likened the current hotel market in China to the image of a water drop, where demand is heavily skewed toward budget hotels with limited amenities and narrows toward the most expensive properties. “Our goal is to absolutely dominate the limited-service hotel segment,” He said, while also capturing the cost-cutting trend in business travel with its Ji and upper midscale Intercity brands.
“In the last couple of years, a lot of corporations have cut their spending budget,” He noted, adding that investment bankers now also stay at those properties. She said that while there is a “cloud of uncertainty” over the outlook of the US-China tariff war, the company has so far not felt any major impact and has not revised its guidance for the year.
Still, competition remains intense with local chain Atour Lifestyle Holdings planning to open 500 hotels this year. US hotel group Hilton aims to open 600 locations of its midscale Hampton brand by 2034 under a franchise agreement with Jin Jiang.
Marriott CFO Leeny Oberg said in an investor call last month that 10% of existing rooms and 18% of its pipeline are in China. “In China, there’s been terrific interest in particular in our select-service brands,” she said, referring to brands like Courtyard and Four Points that offer limited amenities.
H World’s revenue grew 2.2% YoY to RMB 5.4 billion (USD 756 million) in the first quarter, while net profit increased 35.7% to RMB 894 million (USD 125.2 million). Analysts say the challenge for H World is maintaining the quality of its hotels while managing a rapidly growing number of franchisees.
Billy Qi, an analyst at 86Research, said H World’s plan to add 1,800 hotels this year is still within reach, but “the pace is likely to moderate in the years ahead.” “Expansion also hinges on the ability to maintain product quality, which makes purely volume-driven growth structurally unsustainable over the long term,” he said.
More than 90% of H World’s hotels are built by franchisees but operated by general managers hired and trained by the company, a model that the company calls “manachised,” designed to ensure that its properties meet its standards.
H World’s He explained that the franchisees later reimburse the cost of the managers. The group also charges the franchisees a fee for using its technology suite, which includes its reservation system, property management system and customer database.
He defended the company’s business model as well-suited to the current challenging macro environment.
“We also cannot dictate supply growth,” He said. “But in the bigger picture, our hotels are the most resilient in the whole industry because they are affordable, and people are still willing to pay to stay in them.”
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.