Aduo has three mutes

In the past three years since the COVID-19 pandemic, the economy has been in turmoil. Many industries have been hit hard, the most typical of which is the tourism industry.

Hotels are naturally one of the representatives.

According to a Frost & Sullivan report, among the number of domestic chain hotel rooms in 2020, the top five domestic hotel groups had a total of 197,000 mid- to high-end rooms, accounting for 31.8%. Although the concentration of the mid- to high-end hotel industry is low, Atour has 58,000 mid-to-high-end guest rooms, accounting for 9.5% of the total, and its market share ranks first in this segment.

However, even Atour, which claims to be the leader in market share, is silent as of 2022.

Having been trapped in the whirlpool of right and wrong many times, Yaduo cannot express his suffering?

"Atour Hotel's funds collapsed and ran away. Nearly 300 people from the rights protection group have called the police." A video with such a title was circulated on the Internet on March 26, 2022.

The content of the video is screenshots and chat records posted by netizens to the video account, saying, "Atour Hotel's fund collapsed tonight, and a friend was drained of more than 100,000 yuan. The rights protection group is full of dozens of people." Tens of thousands, hundreds of thousands.” In the video, investment types include short-term rentals, hourly suites, etc., with a maximum single amount of 52,000 yuan and an interest rate of 3.2. A netizen with the nickname "Keep Your Own Happiness" voted "540,000", and finally there was a screenshot of a chat where a netizen called the police. The picture was a screenshot of the "(Atour Hotel) (296)" group, and the netizen called the police at the police station.

In fact, this is not the first time rumors about investment and franchise issues have arisen at Atour. In 2020, Atour franchisees will protect their rights. According to media reports, Xu Zhong (pseudonym), an internal employee of Atour, revealed that a franchisee "directly pulled the company's power switch, and employees had to take a day off."

In May 2021, a non-local female franchisee joined Dragging her suitcase, Shang sat at the entrance of the headquarters of Wuzhong Building in Shanghai and burst into tears, calling Yin Yaduo for making her "lose all her money." In order to stop franchisees who "defend their rights", in the past, employees at the gate of Atour's office could come and go freely. In 2021, access control was installed.

In August, Atour was deeply involved in the controversy of "Alibaba executives suspected of sexually assaulting female subordinates". A female Alibaba employee said in her self-report that the hotel she checked into was Atour Light Hotel Jinan West Railway Station Branch. She checked the surveillance and found that after she returned to the room drunk, her boss Wang Mouwen went to the hotel front desk to apply for her room card and entered and exited her room four times. Whether Atour Hotel's additional room card for Wang Mouwen complied with regulations has become one of the focuses of public opinion.

Listed three times, failed three times

Deeply trapped in the whirlpool of right and wrong, it still suffered some losses. After being listed three times, being stranded three times, and being a squib, Atour is even more miserable.

As early as 2017, Zhou Hongbin, chairman of Atour Business Management Group, publicly stated that Atour has a clear listing plan and hopes to complete the A-share listing in about three years. On June 27, 2019, Atour Hotel filed for listing guidance and plans to list on the GEM. The coaching institution is CITIC Securities. The entire tutoring lasted for 3 months, and I applied for tutoring acceptance in September. At this stage, Atour's listing seems to be progressing steadily. At the beginning of 2020, Atour announced that after friendly negotiations with CITIC Construction Investment, they unanimously agreed to terminate the listing coaching work. Later, it was changed to CICC International to continue coaching the listing work, and it is expected to apply for coaching acceptance after April 2020.

Another year later, in March 2021, it was suddenly reported that Atour and CICC International had also signed a listing counseling termination agreement, terminating listing counseling for the second time. This is equivalent to the collapse of A-shares. Atour Hotel was unwilling to accept that in June 2021, Atour Hotel submitted a prospectus to the US Securities Regulatory Commission and planned to be listed on Nasdaq under the stock code "ATAT".

Public reports show that Atour Hotel plans to issue 19.7447 million American depositary shares this time, raising approximately US$307 million to US$352 million. The listing date is July 1.

On the eve of its listing, Atour Hotel also released a positive signal to the outside world, saying that subscriptions were very active. On June 29, Hillhouse Capital subscribed for ADS worth US$120 million at the initial public offering price.

The third surprise occurred. On the evening of June 30, 2021, an investor broke the news that he had received news that Atour Hotel had withdrawn its subscription for new shares. The text message sent by the brokerage reads: "Dear customers, I have been informed by the company that the listing time of Atour Group (ATAT) is to be determined. You can check your subscription record through APP-Transaction-New Stock Subscription-US Stock-Subscription Record. Currently Can support cancellation of subscription, please know. ”

Three times listed, three times dumb. People can't help but ask, why did Atour Hotel fail to go public successfully? Outsiders speculate that the subscription ratio may be low or there may be problems with the financial data. At the same time, there are market rumors that Atour’s cornerstone subscription investors withdrew their corresponding investment commitments, reportedly because they had objections to the determination of Atour’s income.

Some people in the industry believe that the demand for the IPO of Atour Hotel will be stronger than ever before because Atour is short of money. Platforms such as Tianyancha and Qichacha show that in the past eight years, Atour Hotel has received 4 rounds of financing, totaling 1 billion yuan, but the most recent financing was more than 4 years ago. Judging from the amount and frequency of financing, Atour Hotel's cash flow is tight, and listing has become a life-saving straw for Atour Hotel.

The final window for Atour’s listing may be in 2022. However, if Atour's own problems are not solved, the difficulty of going public will continue to rise. The root of this problem lies in business.

The business is slowing down. Atour may be suffering from a common problem of Chinese hotel chains

Atour is Yeluyin (formerly known as Wang Haijun), who was the former vice president of Huazhu Hotels. It was opened in Xi'an in 2013. It was founded after the first Atour Hotel was opened. His original intention was to take advantage of China's consumption upgrading trend to create a mid-to-high-end hotel chain brand.

In the past 9 years, Atour has owned brands such as Atour, Atour S, Atour chain. Unfortunately, Atour's business failed and many problems arose, which can be summed up in four aspects: questionable financial data, weak performance, high debt ratio and weak profitability.

Atour's prospectus shows that as of March 31, 2021, Atour has 608 hotels in operation, covering 131 cities in China, with a number of 71,121 guest rooms. The self-media "Travel World" took a list of franchise hotels within Atour Hotels as of April 2021 and conducted phone calls to verify one by one. It was found that among the 608 hotels that have been opened by Atour Hotels in the prospectus, there are 33 companies are suspected of having terminated their contracts. This creates doubts about the financial data. Even based on 608 stores, the number of Atour Hotels opened is far lower than that of its peers. Public information shows that Huazhu Hotel Group will have a net increase of 1,171 hotels in 2020, and Jinjiang Hotel Group will open 1,842 hotels in 2020.

Another data that is questionable is Atour’s scene retail business. This is the business model that founder Ye Luyin mentioned many times. The prospectus shows that the main charges of Atour Hotel in 2020 are divided into three parts, namely hotel management income (franchised hotels), leasing hotels (directly operated hotels), retail income and other businesses, with corresponding revenue of 926 million yuan and 496 million yuan. yuan and 144 million yuan, accounting for 59.13, 31.69, and 9.18 respectively. Among them, retail revenue and other businesses are scene retail, including but not limited to bedding, toiletries, etc., which can be purchased directly in the hotel.

Atour announced that the scene retail model has hatched 1,136 SKUs and generated nearly 10% of revenue. Is that true? This data has been questioned by the outside world. Some people believe that the data of 10 is not accurate. Some franchisees told the media that based on a hotel's revenue of 3 million yuan, the retail price is about 30,000 yuan, which is only about a ratio of 1. The actual effect is still far from expected.

It is also an indisputable fact that Atour’s performance is weak. A hotel includes three core business indicators: occupancy rate, average daily rate (ADR) and average room revenue (RevPAR). According to public information, Atour's occupancy rate dropped from 73.4 in 2019 to 67.1 in 2020 (excluding hotels requisitioned for epidemic prevention), the average daily room rate dropped from 429.5 yuan to 389.8 yuan, and the average room revenue dropped from 329.5 yuan to 275.1 yuan.

Atour’s debt situation has not improved in recent years. The high debt ratio can be seen from the prospectus alone: ??in 2019, 2020 and the first half of 2021, its total liabilities were 1.120 billion yuan, 1.420 billion yuan and 1.659 billion yuan respectively. During the same period, Atour's debt ratios were as high as 67.9, 71.5 and 76.9. The average debt ratio of A-share listed companies in the hotel industry is about 50. Atour's debt ratio is obviously much higher than average and is trending higher.

As for profitability, the prospectus shows that Atour Hotel’s revenue in 2019 and 2020 was 1.5671 billion yuan and 1.5666 billion yuan respectively, which was basically the same; in the first half of 2021, its revenue was 990 million yuan, A year-on-year increase of 45.45. The net profit in 2020 was 38 million yuan, a year-on-year decrease of 37.8; the loss in the first half of 2020 was 102 million yuan, and the net profit in the first half of 2021 was 71 million yuan, a year-on-year increase of 169.6. Although both revenue and net profit have improved, Atour's weak profitability cannot be changed. And it can be seen from the latest version of the prospectus that in the first half of 2021, Ctrip brought about 255 million yuan in total hotel bookings to Atour, a year-on-year increase of 274, accounting for 25.76 of the total revenue. It can be said that Atour relies heavily on the OTA platform.

Dismantling Atour’s profitability reveals a crossroads between a bloody listing and survival against the epidemic

The issue of profitability deserves further study. For a hotel chain to be profitable, especially to achieve large-scale profits, there are two important factors: one is the number of franchise stores, and the other is the ability to replicate in a standardized manner. The issue of the number of franchise stores has been very clear. Compared with the industry leader, Atour's number is not enough to support large-scale profits. Moreover, franchisees have great opinions, and the key point is that they are severely "squeezed" by Atour headquarters. A Chongqing franchisee broke the news that he paid Atour headquarters a monthly fee of 30,000 yuan for the store manager assigned there, but the store manager himself could only receive 11,000 yuan, and the remaining 19,000 yuan was paid as "management fees." "The name was withheld by the headquarters. With such actual treatment, it is difficult to find good hotel managers and stimulate their business capabilities. The risk of franchisees' hotels being poorly managed and making it difficult to make profits is significantly increased.

Some Shanghai Atour franchisees also told the media that member reservations have very high task requirements in the assessment of Atour store proportions. Store managers often use a large number of "low-price negotiated rooms" for individual customers at the front desk. The Atour headquarters takes away about 35% of the room fee from the room night sales of each membership card, and the store manager, front desk manager, and front desk staff take another 25% of the room fee commission, leaving only less than 40% of the room fee for the franchisees. fee income. It’s no wonder that franchisees are complaining and many have terminated their contracts.

In terms of standardized replication capabilities, Atour can be said to succeed or fail due to IP. IP hotels are obviously difficult to replicate on a large scale. IP hotels, like spokespersons, are at risk of being outdone and out of date. For example, Wu Xiaobo's personality collapsed due to his remarks, and Wu Hotel, co-branded with Atour Hotels, was affected by public opinion. The construction of IP hotels requires higher investment costs, and Atour Hotel will pass on the costs to franchisees, resulting in further costs that are not proportional to profits.

On the one hand, more and more franchisees are withdrawing, and on the other hand, the number of new franchisees is decreasing, which in turn affects the financing and expansion speed of Atour Hotel. As for businesses such as scene retailing, capital and manpower investment have been increased, which has further increased costs and reduced profitability again.

In 2022, Atour seems to have reached the crossroads of going public and surviving the epidemic. Three years into the epidemic, it has profoundly affected all aspects of social life. The hotel industry has become the hardest hit area, and Atour is among them. On March 28, Atour Group announced an upgrade of its anti-epidemic policies for its hotel owners, including -

1. Hotels in medium- and high-risk areas: From January to April, hotels in high-risk areas will start from the date of inclusion From the beginning to the end date, brand usage fees and management fees are waived during the period, and CRS (Central Reservation System) fees are completely free; in medium-risk areas, brand usage fees and management fees are deferred for 3-6 months, and CRS fees are charged at a 20% discount. .

2. Government requisition of hotels nationwide: brand usage fees and management fees will be waived during the requisition period.

3. Procurement credit: Before June 30, 2022, the hotel can enjoy a credit limit of up to 100,000 yuan for the purchase of operational materials.

4. Opening bonus: In addition, those who sign a contract from now until June 30, 2022 and open in 2022 will be given an opening bonus of 40,000 yuan.

The upgraded anti-epidemic policy still looks strong. However, under the epidemic, Atour's business problems cannot be ignored, although this may be a common problem in the development process of Chinese hotel chains. While barely maintaining the current situation, Atour must face itself and find ways to break the business.

To break the situation, we must start by actually solving business problems.