China Hotels: When payback stretches, who gets the growth?

J.P. Morgan hosted a call with a super franchisee operating roughly 80 hotels in South China under H-World, Atour, Jinjiang and international brands. The expert remains cautious on demand and expects new signings to stay challenging in 2027, as longer payback periods make hotel investments harder to underwrite, which is a headwind for industry growth but could also widen the gap between brands, since experienced franchisees have more reason to concentrate capital in platforms offering dependable traffic and stronger execution. He sees H-World and Atour as the clearest choices for multi-unit operators, while independent-to-chain conversion offers a second growth runway. In October, ADR was flat YoY but occupancy fell sharply, with Shantou/Chaoshan down c.17ppt YoY; older Jinjiang mid-scale hotels declined 20%+ while well-located economy hotels and flagship products stayed stable. The expert estimates RevPAR fell YoY at more than 95% of hotels open over 18 months, and that most new hotel