00:00Lots to talk about with you. We had this recent holiday. We have a lot of trends. I know you
00:03have some very big growth plans in China.
00:07But let me just get started, if I could, with the recent long weekend.
00:11Could you give us maybe what were the highlights for your group? What stood out to you? And equally, what
00:16were the challenges?
00:19Good morning. Indeed, the China hotels recorded very strong Red Park growth over this past May holiday.
00:27While it is that did experience a slightly softer demand in comparison with Chinese New Year and the Qingming holidays,
00:37these, I would say, attributed two main factors.
00:40One is this Chinese New Year, we had a longer holiday and also a later holiday. And this shifted the
00:49travel pattern slightly.
00:51And number two, the airfare rise as a result of the recent oil price increase. But nevertheless, the hotels generally
01:00did very well, as reported in other various different sources.
01:05We are waiting for the official data in the next couple of days. But I'm sure the picture will be
01:12very robust.
01:14You mentioned about the increase in jet fuel prices and really, obviously, airfares have have really skyrocketed since this Iran
01:23situation began.
01:25Ken, has it impacted in any way your occupancy across your hotels? Can you tell us a little more of
01:29the impact this Iran war may have on the industry?
01:34The Middle East crisis didn't really impact our greater China hotels performance that much, simply because Middle East is a
01:43very small market for us.
01:45It's not on the top 10 list. It takes up a 3 percent of greater China's hotel revenue.
01:51Number two, Q1 and Q2 are not their traditional high travel season. So the hotel's impact is is quite a
01:59minimum.
02:01Mm hmm. OK. And I guess can't just maybe including what we've seen so far in the first few months
02:08of 2026 before, of course, what the war started in Iran and maybe also encapsulating the recent weekend.
02:15Could you tell us more about where you're seeing the growth in as far as is it domestic travel that
02:20seems to be picking up if you have the data on that?
02:22Or are we seeing a faster pick up in inbound travel into mainland China?
02:28Well, inbound, extremely robust. In 2025, we saw a 36 percent increase for our aqua hotels in greater China.
02:37And the first quarter of this year, up until actually end of March, we saw another increase of 25 percent.
02:45So this is this is a very strong sign that China's visa free policy is is helping the industry in
02:56greater China.
02:56Number two, the leisure demand in domestic markets is also very robust, particularly in markets in greater China.
03:06Sorry, great greater Bay Area, Sun Yaa, Yunnan and also Guizhou.
03:11For example, Hong Kong and Guangzhou, these two cities literally run full house for the last 10 days.
03:21You mentioned Rev. Par was actually pretty good during during the holiday camp.
03:26I think up until the end of last year, Rev. Par in China was still a negative territory here and
03:32really, you know, underperforming a lot of parts of the region.
03:35Do you have a sense of demand picking up a bit more there? And when do you think Rev. Par
03:40can actually turn positive in China?
03:43I think the negative Rev. Par really was in the mid scale and the economy scale hotels last year.
03:51But if you look at the premium and luxury segments actually outperformed 2025, there was a 5 percent to 6
03:58percent of Rev. Par growth in the premium and luxury segment.
04:01So in a nutshell, we see this trend starting actually from Q3 last year until year today.
04:08This year, the luxury segment in particular has recorded more than 8 percent increase year on year.
04:15You guys hit a milestone, 800 hotels. And I think you've taken that opportunity, Kent, to tell the markets that
04:23you plant another 800 hotels in China.
04:27Could you give us a sense of, well, for one, when you think you will be able to hit another
04:34800 from the current levels?
04:35And if you could give us a breakdown, too, in terms of the price points or the locations in China,
04:42where you want to see the bulk of that new growth?
04:48Indeed, we recently celebrated the 800 hotel milestone and we set our ambition for another 800 in five to six
04:56years' time.
04:57We have a robust and very clear roadmap and strategy in place.
05:02Number one, we focus on our core brands in Tier 1 and Tier 2 cities and also niche destinations.
05:10These are the places or markets where we will build our long-term positioning.
05:16The brands include Raffles, Fairmont, Sofitel and Gallery, Swiss Hotel and Pullman.
05:24So, number two, we are an asset-light hospitality group.
05:31We grow our business through management contracts as well as franchise and master franchise.
05:36Now, our master franchise partnership will be able to scale up our network through mid-scale and economy-scale brands
05:46into tertiary and fourth-tier cities.
05:50And number three, we maintain a very strong and very long-term view with our owners and we treat them
05:57as part of our core assets.
06:00The owners grow with us.
06:02We want to grow with them because many of our owners actually have multiple asset portfolios.
06:08They continue to expand their hotel business.
06:11So, when they all have opened a new project, we want to be their first choice.
06:17Number four is the expansion of new markets.
06:20We have a very clear strategy to go west.
06:25Xinjiang and Midwest region are the hotspots.
06:29So, we have a strategy to put, accelerate our development resources in these new markets.
06:38And lastly, Accor has a huge portfolio of brands.
06:42We have the largest brand portfolio among all the hotel companies.
06:46We want to continue to bring the new brands into China.
06:50We have 45 brands, 17 of them already in China.
06:54So, we'll continue to bring new China to meet the needs of the changing consumer preference.
07:02That's interesting.
07:03Go west.
07:05Xinjiang, could you talk a little bit more about your plants there?
07:10Well, Xinjiang, as you know, the government is also strategically developing that area.
07:16There is a lot of business and economic activities and natural resources is huge.
07:21A lot of great tourist spots and destinations.
07:26We want to be there across all different brands from mid-scale to luxury brands.
07:33So, we are now having teams stationed in Xinjiang, stationed in the Midwest regions to look for opportunities.
07:41And we are pretty sure that we will be able to become a major player in the region.
07:51I want to get your take on what you're seeing domestically and consumption patterns there, right?
07:56I mean, we've seen the consumption side of the story still in very slow goings when it comes to recovery.
08:02I think sentiment is improving by the margin.
08:05But you are starting to see when it comes to what consumers want.
08:09It's service quality.
08:11It's competitive pricing.
08:13How does that change how you strategize here when it comes to luxury lifestyle and some of your economy tiers?
08:21It's interesting.
08:23If you see the performance of 2025 and probably the first quarter of this year as well, that the luxury
08:30brands and the premium brands are doing much better than the mid-scale and economy-scale hotels.
08:38That shows that consumers does have the spending power.
08:43It does show that the consumer confidence level is continuing to improve.
08:48You know, this trend has started from, I would say, since third quarter of last year.
08:54We already see luxury hotels are performing much, much better.
08:57As I said just now, that 8% increase in 2025 versus a 4% to 5% decrease in
09:05the mid-scale and economy-scale hotels.
09:09Yeah.
09:10Anything that's really unique about China that is more pronounced in the mainland than anywhere else?
09:16You know, are people staying, preferring to stay longer?
09:19Are they, do they, you know, is there a preference for certain price points?
09:25Are they, do they have a preference in terms of what they want for breakfast?
09:28Tell us something interesting, Kent.
09:31It's a, it's a, it's a, the shift, the shift of travel patterns.
09:36There's a, there's a huge shift from traditional sightseeing to experiential travels.
09:43You will see that more and more younger and experienced travelers are now staying away from the hustle and bustle
09:51of major cities.
09:52They choose to take their own time, enjoy their own, own, own pace.
09:58So the smaller destinations or niche destinations such as Kai-Fung or Jingdezhen or Da-Tung, Luoyang, these are becoming
10:08very, very popular.
10:09So the customers are shifting from major destinations to more niche destinations to be able to, for them to enjoy
10:17something new and different, to enjoy the history, culture, even food.
10:21So there's a huge trend in that sense that, you know, we, the smaller destinations or niche destinations will be
10:29a primary focus for developers as well in the, in the future to, to build up the scale of new
10:36facilities.
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