Atour’s Dual-Engine Model Delivers Resilient Growth in China

SHANGHAI, China – November 25, 2025 – In a market characterized by cautious consumers and moderating economic expansion, Atour Lifestyle Holdings Limited (NASDAQ: ATAT) has delivered a powerful demonstration of strategic resilience. The Chinese hospitality and lifestyle company today reported striking third-quarter 2025 financial results that significantly outpaced the broader market, showcasing the strength of its unique dual-engine growth model.

Atour announced a 38.4% year-over-year surge in net revenues to RMB 2.63 billion, alongside a robust 24.6% increase in net income to RMB 474 million. This performance stands in sharp contrast to China’s Q3 GDP growth, which slowed to 4.8%, its most modest pace in a year. The results underscore Atour’s ability to not only navigate but thrive within a complex economic landscape, propelled by a potent combination of aggressive hotel network expansion and a rapidly accelerating lifestyle retail business.

Thriving Amidst Market Crosscurrents

While headlines about China’s economy have focused on a cooling property sector and guarded consumer spending, a parallel story of a vibrant domestic travel boom has provided a powerful tailwind for the hospitality industry. In the first three quarters of 2025, domestic tourist trips surged by 18% to nearly five billion. Atour has positioned itself perfectly to capture this demand.

The company’s revenue growth of 38.4% notably outperforms its larger peers. For the same quarter, competitor Huazhu Group reported a strong but smaller 28.3% revenue increase, while BTG Hotels Group saw revenues climb 18.5%. Atour’s outperformance suggests its strategic focus on the upper-midscale segment, combined with its distinct brand proposition, is resonating deeply with China's modern traveler.

"In the third quarter of 2025, amid a volatile market environment, Atour remained fully dedicated to users’ core needs while continuously advancing product innovation and enhancing customer experience," stated Mr. Haijun Wang, Founder, Chairman and CEO of Atour, in the company's earnings release. This focus appears to be a key factor in insulating the company from wider economic anxieties and capturing a greater share of consumer travel spending.

The 'Manachised' Growth Engine

The first of Atour's dual engines is its rapid, asset-light expansion strategy. The company ended the quarter with 1,948 hotels in operation, a 27.1% increase from the prior year. This growth is predominantly driven by its "manachised" model, a hybrid approach where Atour provides its brand, systems, and management standards to franchisee-owned properties. This capital-efficient model allows for rapid scaling while maintaining high returns on invested capital and minimizing direct real estate risk—a particularly prudent strategy given the ongoing turbulence in China's property market.

Fueling the company's confident outlook is a formidable pipeline of 754 new manachised hotels currently under development. This pipeline alone represents a potential 39% expansion of its current hotel network, providing investors with clear visibility into a powerful, multi-year growth trajectory.

A deeper look at the operational metrics reveals a nuanced picture. While overall Revenue Per Available Room (RevPAR) saw a slight dip to RMB 371 from RMB 380 a year ago, this is largely a function of the massive influx of new hotels that are still in their ramp-up phase. More telling is the data for "same-hotel" properties (those open for more than 18 months), which also showed a RevPAR decline from RMB 392.6 to RMB 373.0. While this might signal competitive pressure or a slight softening in mature markets, it is overshadowed by the sheer scale and financial contribution of the network's expansion. For a high-growth company like Atour, prioritizing market share and network density is a proven strategy for building long-term brand dominance and pricing power.

Beyond Beds: The Lifestyle Retail Juggernaut

If disciplined expansion is Atour’s first engine, its second is a high-octane lifestyle retail business that is quickly becoming a significant value driver. In the third quarter, the Gross Merchandise Value (GMV) from this segment soared an astonishing 75.5% year-over-year to RMB 994 million. This translated into a 76.4% increase in retail revenues, which now constitute nearly 32% of the company's total net revenues.

This is not a simple hotel gift shop operation. Atour is building a comprehensive lifestyle brand, transforming hotel rooms into immersive showrooms. The strategy is exemplified by the recent launch of the "Atour Planet Deep Sleep Standard," an ecosystem of products and services centered on improving sleep quality. Guests who experience Atour’s signature mattresses, pillows, and bedding can seamlessly purchase them, extending the brand relationship far beyond checkout.

This innovative model achieves several key objectives for a resilient business. It creates a powerful brand moat, differentiating Atour from competitors focused solely on lodging. It diversifies revenue streams, making the company less susceptible to the cyclicality of hotel occupancy rates. Finally, it increases customer lifetime value, building a loyal community that engages with the Atour brand both during travel and at home. The retail segment's robust 52.7% gross margin underscores the profitability and success of this strategic pivot.

A Resilient Outlook with Calculated Execution

Buoyed by its strong performance, Atour has projected an ambitious 35% increase in total net revenues for the full year of 2025 compared to 2024. This confidence is underpinned by the visible growth from its hotel pipeline and the unabated momentum in its retail division. The company's asset-light model provides the flexibility to continue its expansion while maintaining a strong balance sheet, with over RMB 2.7 billion in cash and minimal debt.

However, the path forward requires diligent execution. The company must manage the inherent challenges of rapid growth, ensuring consistent quality and brand standards across its expanding manachised network. Furthermore, it remains exposed to the broader macroeconomic climate in China; a significant downturn in consumer sentiment could eventually temper even the most robust travel and retail trends.

Nonetheless, Atour Lifestyle Holdings has crafted a compelling blueprint for resilient growth. By building a business that is not just a collection of hotels but a deeply integrated lifestyle platform, the company has created multiple levers for value creation. For investors seeking companies that demonstrate foresight and adaptability in a complex world, Atour's dual-engine performance offers a powerful case study in navigating economic shifts to deliver sustained returns.