Atour Lifestyle Holdings is increasingly becoming more than a hotel company, with second-quarter retail revenue jumping 63.2% and nearly matching the revenue generated by its core manachised hotel business.
Retail revenue reached RMB1.575 billion, or approximately $232 million, compared with RMB965 million a year earlier. Management attributed the increase to growing recognition of Atour’s retail brands, product innovation and a broader product portfolio.
By comparison, revenue from manachised hotels increased 32.8% to RMB1.725 billion, or approximately $254 million.
That means retail generated roughly 45% of Atour’s total $514 million of quarterly revenue, while manachised hotels represented approximately 49%. Together, the two businesses generated almost 95% of companywide revenue.
The rapid expansion of retail creates an increasingly significant second growth engine alongside Atour’s hotel network.
Atour had 2,175 hotels operating at the end of the quarter. Its manachised hotel count increased to 2,156 from 1,800 a year earlier, while another 811 manachised hotels were under development.
Leased hotel revenue moved in the opposite direction, declining 11.8% to $19 million as the number of leased properties fell to 19 from 24.
Overall net revenue increased 41.4% to RMB3.49 billion, or $514 million.
The growth came with increased investment. Retail costs rose to $113 million from the equivalent of roughly $66 million, while retail costs as a percentage of retail revenue increased to 48.6% from 46.7%. Hotel operating costs also increased as Atour expanded its network.
Atour’s retail strategy is centered on Atour Planet and other consumer products that extend its hospitality brand beyond hotel stays and into products that customers can purchase separately.
KEY QUOTES:
“Meanwhile, our retail business sustained its strong growth momentum. Retail revenue was RMB1.57 billion in the second quarter, up 63% year-over-year.”
Haijun Wang, Founder, Chairman and CEO of Atour
