#China #Shanghai #financial results #Q3 2025 #GreenTree Hospitality

Overview

On December 23, 2025, GreenTree Hospitality Group Ltd. (NYSE: GHG), a key player in China's hospitality and restaurant management industry, released its unaudited financial performance for the third quarter of 2025. The report reveals a notable decline in total revenues, marking a challenging quarter for the company amidst a shifting economic landscape.

Financial Performance

For the third quarter of 2025, GreenTree reported that its total revenues fell by 15.0% year-over-year, amounting to RMB303.6 million (approximately US$42.6 million)[1]. The decline in revenue was evident across various segments, particularly in the hotel and restaurant sectors. The income from operations stood at RMB70.1 million (US$9.8 million), down from RMB106.4 million in the same quarter of the previous year. Net income also decreased to RMB60.3 million (US$8.5 million), from RMB65.2 million in Q3 2024.

Adjusted EBITDA (a non-GAAP measure) reflected a year-on-year decline of 6.1%, totaling RMB115.0 million (US$16.1 million)[1]. This figure highlights the strain on profitability despite a modest increase in cash from operations, which saw a 3.8% rise to RMB144.5 million (US$20.3 million).

Operational Highlights

By September 30, 2025, GreenTree operated 4,533 hotels with a total of 323,510 rooms. During the quarter, the company launched 41 new hotels, while maintaining a robust pipeline of 1,248 hotels either contracted or under development. Despite these expansions, the average daily room rate (ADR) decreased to RMB173, which is a 4.1% drop from the prior year, leading to a lower occupancy rate of 71.3% compared to 74.6% in Q3 2024. Revenue per available room (RevPAR) experienced an 8.4% decrease year-over-year, settling at RMB124.

In the restaurant segment, operations included a total of 185 restaurants by the end of the third quarter. The average check per customer dropped significantly, reflecting a 19.3% year-over-year decrease, leading to an average daily sales (ADS) figure of RMB3,714, which is down by 24.1% compared to the previous year.

Revenue Breakdown

Hotel Revenue: The hotel-related income was reported at RMB254.5 million (US$35.7 million)[1], marking an 11.3% decline year-over-year, predominantly due to decreased RevPAR and the closure of several leased and operated hotels.

Restaurant Revenue: The restaurant division experienced a steeper drop, with revenues of RMB49.4 million (US$6.9 million)[1] which represent a staggering 30.1% decrease year-over-year, attributed to poor ADS performance and the reduction in leased and operated locations.

For the first nine months of 2025, total revenues totaled RMB882.7 million (US$124.0 million), reflecting a consistent decline of 15.0% compared to the same period in the previous year. This trend raises concerns about the future profitability and growth of the company, particularly as certain hotels have closed due to lease expirations and shifts in business strategy.

Cost Management

While the revenue numbers are troubling, GreenTree's operational costs exhibited a decrease of 14.9%, bringing total operating costs to RMB177.1 million (US$24.9 million)[1]. Such reductions were a direct response to strategic actions aimed at maintaining profitability amidst declining incomes. Moreover, GreenTree’s selling and marketing expenses also reflected a downturn, decreasing by 14.4%. This cost control is vital as the company continues to navigate through market challenges.

Future Outlook

Looking ahead, GreenTree Hospitality has maintained its revenue guidance for the hotel segment, projecting a year-over-year decrease between 10% and 13%. The anticipated closure of additional leased hotels and shifts in business strategies are likely to impact overall performance in the forthcoming quarters. The management emphasizes the need for ongoing assessment and adaption to the evolving market conditions.

Conclusion

GreenTree Hospitality Group Ltd.'s Q3 2025 financial results underscore significant revenue challenges across its operational segments. To secure its market position, the company will need to execute effective strategic decisions, prioritize cost-management measures, and continuously adapt to the changing economic landscape. Investors and stakeholders remain hopeful for future improvements as the company works towards addressing these challenges.[1]. The conversion rate of Renminbi (RMB) into US dollars (US$) is based on the exchange rate as of September 30, 2025.