H World Eyes Pricier Hotels as China’s Real Estate Pain Creates Openings

H World Group is using China’s weak property market to look for better hotel locations in major cities.

In its first-quarter 2026 update, the company said it is paying more attention to Tier 1 and Tier 2 cities, especially business districts where strong locations can support higher room rates.

The company is not moving away from smaller Chinese cities. The property slowdown gives H World a chance to secure better sites in large cities, where prime locations were previously more expensive and harder to access. China’s property investment fell 13.7 percent year over year in the first four months of 2026, showing that the real estate market remains under pressure.

Premium hotels are performing better than expected

H World said its upper-midscale hotels slightly outperformed its economy and midscale hotels in RevPAR recovery during the quarter. RevPAR, or revenue per available room, shows how much revenue a hotel earns from its available rooms, combining both occupancy and room rates.

China’s travel recovery is often seen as budget-driven. Many consumers are still careful with spending, but H World’s results suggest that some travelers are willing to pay more for better hotels, especially in business districts and large cities.

The company has been growing brands such as Intercity, Grand Ji, Crystal, and Mercure. These brands help H World reach guests who want better locations, stronger design, and more consistent service without moving into full luxury hospitality.

The financial results support the strategy

H World ended the first quarter with 13,215 hotels and more than 1.3 million rooms worldwide. Most of the network is in China, where the company operated 13,095 hotels across 1,461 cities. It also had 2,865 hotels in its China pipeline, so domestic growth remains the core of the business.

Revenue rose 11.1 percent year over year to RMB 6 billion. Hotel turnover increased 17.4 percent to RMB 26.4 billion, while revenue from managed and franchised hotels grew 20.3 percent to RMB 3 billion.

Southeast Asia is becoming the next test market

H World is also expanding outside China, with Southeast Asia becoming its first major regional focus. The company has opened six hotels in Southeast Asia across brands including HanTing, JI Hotel, Intercity, and MAXX. It is also using Singapore as its regional operating hub.

The region gives H World a way to test whether its China-developed hotel brands can work abroad.

One early example is HanTing in Ho Chi Minh City, which opened in late 2025 and reached nearly RMB 500 in RevPAR in the first quarter. H World also opened its first overseas JI 5.0 hotel in Vientiane, Laos, during the quarter.

Loyalty and AI are part of the next phase

H World is also investing in its H Rewards loyalty program, digital tools, and AI. The goal is to improve marketing, increase membership sign-ups, and increase direct bookings.

Recently, major hotel groups have been using stronger brands, loyalty programs, and franchising to grow without owning every property. A similar pattern appears in Choice Hotels, which reported growth across its extended-stay and upscale segments while continuing to rely on a franchise-heavy model.

Photo by Li Yang on Unsplash