ChinaTravelNews, Ritesh Gupta – Hotel chain H World is significantly expanding its base of loyal customers through its H Rewards loyalty program.
During the company’s second-quarter (Q2) earnings call, CEO Jin Hui highlighted that this strategy is proving highly effective in a business environment where consumers are increasingly seeking value.
H World’s impressive membership numbers demonstrate the success of this approach. The H Rewards program has grown its base by 17.5% year-over-year to nearly 290 million members. This growth is directly tied to the company’s performance, as room nights booked by members jumped by 28.8% to over 60 million.
H Rewards, which covers all of the group’s brands, saw its membership grow from over 228 million at the end of 2023 to more than 266 million by the end of last year.
“Our membership and direct sales are vital to our sustainable long-term business growth,” Jin stated. “As we expand our hotel network and enter more new cities, our membership base continues to grow.”
The company leverages this loyal customer base to maintain a high percentage of direct sales, which in turn helps keep marketing costs low. The company is actively working to enhance membership benefits—such as a price guarantee on its app—to boost engagement and retention.
In 2024, roughly 70% of room nights for the legacy Huazhu brand were booked by H Rewards members, with 75% of those bookings coming through the company’s own sales channels.
Loyalty and franchisee success
Rather than competing on luxury or high prices, H World builds long-term customer loyalty by enhancing its brands, optimising products, and improving services. This approach of catering to a specific, value-conscious customer base allows the company to build a resilient business that can successfully navigate economic cycles. Jin also noted that this strong customer base is a vital link in supporting ties with its franchisees.
H World provides franchisees with both brand recognition and a consistent stream of customer traffic from its loyalty program. This, combined with its robust technology infrastructure, allows H World to expand rapidly in an asset-light manner through manachised and franchised hotels. From December 31, 2022, to December 31, 2024, the company added a net of 2,604 hotels, with 2,675 being manachised or franchised.
In Q2, the company’s legacy-Huazhu business opened 595 hotels, with 594 being manachised and franchised properties. This brings its total operational hotels to 12,137. The manachised and franchised business revenue saw a robust 22.8% year-over-year growth to RMB 2.9 billion, with gross operating profit also increasing by 23.2% to RMB 1.9 billion.
“On the development front, we opened another 595 hotels in the quarter, well on track of achieving our 2,300 gross opening target for the full year of 2025,” Jin confirmed. Overall revenue increased 4.5% year-over-year to RMB6.4 billion in Q2.
Expansion in lower-tier cities
H World’s expansion into lower-tier cities is primarily driven by its HanTing brand. HanTing accounts for 4,401 of the company’s 5,847 economy hotels in operation and represents a significant portion of future growth, with 728 of the 1,118 unopened hotels being HanTing properties.
Jin also highlighted the importance of their mid-scale hotel brands, JI Hotel and Orange Hotel. While JI Hotel has long been a segment leader, Orange Hotel recently surpassed the 1,000 hotels milestone. With its “industry-leading products, cost competitiveness and operational capabilities,” Orange Hotel is well-positioned to become H World’s second growth engine in the middle-scale segment.
These three limited-service brands—HanTing, JI, and Orange—form what Jin called the company’s “Golden Triangle.” These brands are considered the core drivers for H World’s mid-term goal of reaching 20,000 hotels in 2,000 cities, demonstrating formidable competitiveness that is central to the company’s expansion strategy.
In the upper-midscale segment, Intercity Hotel is also rapidly gaining traction among both franchisees and consumers.
Supply chain as a competitive advantage
Jin concluded by emphasizing that continuous product optimization and upgrades, across both limited-service and upper-midscale segments, are fundamentally supported by strong supply chain capabilities.
“We firmly believe that supply chain strength is a critical pillar of high-quality development,” he stated. H World is actively innovating and optimizing its supply chain by enlarging its supplier pool, strengthening module applications, and optimizing product design. This comprehensive approach is designed to achieve higher product quality, lower operating and capital expenses (OpEx and CapEx), and a shorter construction period, which ultimately strengthens the company’s core competitiveness.
