GreenTree Hospitality Q2FY26 revenue falls 18.7% to US$34.7 million
- GreenTree Hospitality Q2FY26 revenues fell 18.7% YoY to RMB235.1 million (US$34.7 million)
- Core net income rose 4.4% YoY to RMB47.2 million (US$7.0 million)
- GAAP net income declined significantly to RMB21.3 million, impacted by prior-year one-time gains
- Hotel RevPAR dropped 9.1% YoY to RMB103 amid lower occupancy and average daily rates
- Company maintains full-year FY26 hotel revenue guidance of 10-15% decline
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GreenTree Hospitality Group Ltd. (NYSE: GHG) reported second quarter of 2026 total revenues of RMB235.1 million (US$34.7 million), an 18.7% year-over-year decrease. Core net income (non-GAAP) rose 4.4% year-over-year to RMB47.2 million (US$7.0 million).
The China-based hospitality and restaurant management group operated 4,615 hotels with 330,029 hotel rooms as of June 30, 2026, alongside 198 restaurants. Despite broad revenue pressure, the company maintained income from operations at RMB48.2 million (US$7.1 million), compared to RMB49.2 million in the second quarter of 2025, with an operating margin of 20.5%.
Key Financial Highlights
The following table summarises the key financial metrics for the second quarter of 2026 versus the second quarter of 2025.
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Total revenues | RMB235.1 million (US$34.7 million) | RMB289.3 million | -18.7% YoY |
| Income from operations | RMB48.2 million (US$7.1 million) | RMB49.2 million | Broadly stable |
| Net income | RMB21.3 million (US$3.1 million) | RMB160.0 million | Significant decline |
| Core net income (non-GAAP) | RMB47.2 million (US$7.0 million) | RMB45.2 million | +4.4% YoY |
| Adjusted EBITDA (non-GAAP) | RMB68.9 million (US$10.2 million) | RMB78.3 million | -12.1% YoY |
| EPS — basic and diluted (per ADS) | RMB0.21 (US$0.03) | RMB1.59 | Decline |
For the first six months of 2026, total revenues were RMB462.8 million (US$68.2 million), a 16.5% year-over-year decrease. Income from operations for the first six months of 2026 was RMB76.9 million (US$11.3 million), compared to RMB60.5 million in the same period of 2025, with a margin of 16.6%.
Revenue Breakdown by Segment
Hotel revenues were RMB204.6 million (US$30.2 million) in the second quarter of 2026, a 16.2% year-over-year decrease, driven by a 9.1% year-over-year decline in RevPAR and a net closure of 13 leased-and-operated (L&O) hotels since the second quarter of 2025 due to lease expiration and strategic reviews. Restaurant revenues were RMB30.5 million (US$4.5 million), a 33.5% year-over-year decrease, mainly due to a 20.3% decrease in average daily sales per store (ADS) and a net closure of 2 L&O stores since the second quarter of 2025.
| Revenue Stream | Q2 2026 (RMB) | Q2 2025 (RMB) | YoY Change |
|---|---|---|---|
| Hotel revenues | 204,584,992 | 244,028,441 | -16.2% |
| Restaurant revenues | 30,523,400 | 45,887,553 | -33.5% |
| Total revenues | 235,108,392 | 289,264,774 | -18.7% |
Total revenues from L&O hotels and restaurants were RMB95.9 million (US$14.1 million), a 28.5% year-over-year decrease. Total revenues from franchised-and-managed (F&M) hotels and restaurants were RMB126.8 million (US$18.7 million), an 8.8% year-over-year decrease. Total revenues from wholesale and others were RMB12.5 million (US$1.8 million), a 22.9% year-over-year decrease.
Hotel and Restaurant Operational Metrics
Key hotel operational metrics for the second quarter of 2026 compared to the second quarter of 2025 are presented below.
| Metric | Q2 2026 | Q2 2025 | Change |
|---|---|---|---|
| Total hotels in operation | 4,615 | 4,509 | +106 |
| Total hotel rooms in operation | 330,029 | 321,977 | +8,052 |
| Blended occupancy rate | 65.2% | 67.9% | -2.7 ppts |
| Blended average daily rate (RMB) | RMB157 | RMB166 | -5.3% |
| Blended RevPAR (RMB) | RMB103 | RMB113 | -9.1% |
The company opened 18 hotels in the second quarter of 2026 and had a pipeline of 1,278 hotels contracted for or under development as of June 30, 2026.
For the restaurant segment, the blended average check (AC) was RMB36, a 15.5% year-over-year decrease. The blended average daily tickets (ADT) was 81, decreased from 85 in the second quarter of 2025. The blended ADS was RMB2,893, a decrease of 20.3% from RMB3,629 in the second quarter of 2025.
Operating Costs and Profitability
Total operating costs and expenses for the second quarter of 2026 were RMB189.7 million (US$28.0 million), compared to RMB247.1 million in the second quarter of 2025. Operating costs were RMB146.5 million (US$21.6 million), a 20.0% year-over-year decrease. General and administrative expenses were RMB28.1 million (US$4.1 million), a 35.0% year-over-year decrease. Selling and marketing expenses were RMB10.2 million (US$1.5 million), a 2.7% year-over-year decrease.
Gross profit was RMB88.6 million (US$13.1 million), a year-over-year decrease of 16.6%, with a gross margin of 37.7%, compared to 36.7% a year ago. Net income in the second quarter of 2026 was RMB21.3 million (US$3.1 million), compared to RMB160.0 million in the second quarter of 2025, with a net margin of 9.0%. The significant year-over-year decline in net income was impacted by the one-time divestment of ownership in Argyle and fair value fluctuation in securities in the second quarter of 2025.
Adjusted EBITDA (non-GAAP) was RMB68.9 million (US$10.2 million), a year-over-year decrease of 12.1%, with an adjusted EBITDA margin of 29.3%, compared to 27.1% a year ago. Core net income per ADS (basic and diluted, non-GAAP) was RMB0.47 (US$0.07), increased from RMB0.45 a year ago.
Cash Flow and Balance Sheet
Operating cash inflow in the second quarter of 2026 was RMB23.3 million (US$3.4 million), a decrease of RMB23.3 million compared with the second quarter of 2025, primarily due to a net decline of approximately RMB31.0 million in accounts payable to franchisees. Investing cash outflow was RMB25.0 million (US$3.7 million), primarily due to purchase of equipment for newly opened L&O hotels and loans for the renovation of newly opened resort hotels. Financing cash outflow was RMB0.2 million (US$29,476.0), mainly due to repayment of bank borrowings.
As of June 30, 2026, the company held total cash and cash equivalents, restricted cash, short-term investments, investments in equity securities and time deposits of RMB2,000.3 million (US$294.8 million), compared to RMB2,010.2 million as of March 31, 2026.
Recent Developments and Guidance
GreenTree Hospitality entered into an agreement in 2025 to acquire a hotel property located opposite the Twin Towers in Malaysia. The property was handed over in July 2026 and will serve as the company's flagship asset to scale its hotel network across Malaysia and the broader Southeast Asian market.
The company also won the bid for a landmark property along the Huangpu River waterfront in Yangpu District, Shanghai, following a letter of intent entered in 2025. The property is planned to be developed into the company's signature flagship hotel in Shanghai, anchoring its mid-to-up-scale strategy. The remaining closing procedures are expected to be completed before the end of the third quarter of 2026, subject to customary closing conditions.
The Board of Directors approved a share repurchase program authorising the company to repurchase up to US$5 million of its Class A ordinary shares over a two-year period, effective from the date of approval.
Based on performance in the first half of 2026, the company maintained its previous revenue guidance for the hotel business, expecting revenue to decrease by 10% to 15% year-over-year for the full year of 2026.
How will the strategic shift toward franchised-and-managed (F&M) models help GreenTree mitigate the revenue declines seen in its leased-and-operated (L&O) segment?
What specific operational strategies is GreenTree employing to reverse the 9.1% decline in RevPAR and stabilize average daily rates in the competitive Chinese hotel market?
How might the upcoming completion of the Shanghai Huangpu River flagship hotel impact GreenTree's mid-to-up-scale brand positioning and long-term profitability?
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