What is Sales and Marketing Strategy of H World Group Company?

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What is the Sales and Marketing Strategy of H World Group?

H World Group, a major hotel operator in China and internationally, employs a sophisticated sales and marketing strategy focused on digital engagement and its loyalty program. This approach aims to build direct customer relationships and reduce reliance on third-party booking platforms.

The company's evolution from its founding in 2005 to its current extensive global network highlights a strategic adaptation to market dynamics. This includes a shift towards an 'asset-light' operational model, supported by strong digital infrastructure.

H World's sales and marketing strategy is deeply intertwined with its digital ecosystem, particularly its H Rewards loyalty program. This program is central to fostering direct customer relationships, thereby enhancing customer retention and driving bookings. The group's commitment to digital transformation allows for personalized guest experiences and efficient service delivery across its diverse brand portfolio. This focus on direct channels has been a key differentiator in the competitive hospitality sector, contributing to its sustained growth and market position.

The company's financial performance underscores the effectiveness of its strategy. In 2024, H World reported RMB 23.9 billion (US$3.3 billion) in revenue, a 9.2% increase year-over-year. For the first quarter of 2025, revenue rose 2.2% to RMB 5.4 billion (US$744 million), with net income up 35.7% to RMB 894 million (US$123 million). Understanding the H World Group BCG Matrix can provide further insight into how different brands within their portfolio contribute to this success.

H World Group employs a multifaceted sales strategy, leveraging both digital and physical touchpoints to connect with a wide customer base. The company prioritizes direct sales channels, significantly enhancing customer relationships and revenue streams.

Direct Digital Channels

The H World App and the company's official website are central to its direct sales efforts. These platforms facilitate seamless bookings and provide a direct line of communication with customers, supporting the overall H World Group sales strategy.

B2B Platform Strength

A robust direct B2B platform is a key component of H World Group's business strategy. This channel has shown significant growth, indicating successful customer acquisition strategies for corporate clients.

Physical Hotel Network

The extensive network of owned, leased, manachised, and franchised hotel locations serves as crucial offline sales touchpoints. As of March 31, 2025, a significant 92% of rooms operate under manachise and franchise models, underscoring an asset-light approach to expansion.

Loyalty Program Integration

The H Rewards loyalty program, launched in July 2020, is a vital direct sales channel and a core element of H World Group's marketing initiatives for hotel brands. With 277 million members by Q1 2025, it drives direct bookings and supports customer relationship management.

The company's sales performance metrics are strongly influenced by its focus on direct bookings, which bypass third-party commissions. This strategic emphasis on owned channels, including the H World App, B2B platform, and H Rewards, resulted in approximately 78% of room-nights sold through these avenues in 2023. The growth in direct bookings from loyalty members, accounting for over 65% of total reservations in Q1 2025, a 5.4 percentage point increase year-on-year, highlights the effectiveness of H World Group's customer acquisition strategies and its competitive advantage in the market. The expansion of its direct B2B platform, with over 7.5 million room nights booked in Q3 2024 and more than 4,500 active corporate clients, further solidifies its market penetration strategies. This approach, detailed further in the Marketing Strategy of H World Group, is fundamental to H World Group's revenue growth and overall business strategy.

Key Sales Channel Performance

H World Group's sales channels demonstrate a clear preference for direct engagement, leading to increased revenue and customer loyalty.

• Direct bookings from H Rewards members reached over 65% of total reservations in Q1 2025.
• This represents a 5.4 percentage point year-on-year increase in direct booking share.
• In 2023, approximately 78% of room-nights were sold via the company's own sales channels.
• The B2B platform saw a 41% increase in room-night bookings in Q3 2024 compared to the previous year.

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H World Group employs a comprehensive marketing strategy that blends digital innovation with a strong focus on customer loyalty and direct engagement. This approach aims to build brand recognition, attract new guests, and encourage repeat business across its diverse portfolio of hotel brands.

Digital Engagement Hub

The company's proprietary mobile app and website are central to its marketing efforts. These platforms facilitate direct bookings and offer a fully digitalized guest experience, enhancing customer interaction.

App Usage Growth

Daily active users for the H World app and its mini-program saw substantial growth in Q1 2023 compared to 2019. App DAU exceeded 1 million, while mini-program DAU reached over 436,000.

Loyalty Program Power

The H Rewards loyalty program is a cornerstone of H World's customer acquisition and retention strategy. With 277 million members as of Q1 2025, it enables personalized marketing campaigns and offers significant member benefits.

Data-Driven Personalization

H World leverages data analytics from its loyalty program to segment customers and deliver tailored services. This data-driven approach fosters a 'closed loop of differentiated services' for enhanced guest satisfaction.

Direct Booking Emphasis

The company prioritizes direct sales through its Central Reservation System (CRS). In Q3 2024, the CRS accounted for 64.2% of all bookings, demonstrating a successful shift towards direct channels.

Technological Integration

Innovation is key, with AI-powered features like an intelligent AI assistant and voice control for in-room facilities enhancing the guest experience. This technological integration supports the overall H World Group business strategy.

Sustainability Marketing

H World Group also integrates sustainability into its marketing, promoting initiatives like the 'Green Living' program. This aligns with growing consumer demand for eco-conscious travel options and contributes to their brand positioning in the hospitality industry.

• Focus on digital channels for customer engagement and bookings.
• Leverage the H Rewards loyalty program for personalized marketing and retention.
• Utilize data analytics for customer segmentation and targeted campaigns.
• Emphasize direct sales through the Central Reservation System (CRS).
• Integrate technology, including AI, to enhance the guest experience.
• Promote sustainability initiatives as part of the brand's marketing efforts.

The company's marketing initiatives for hotel brands are designed to create a seamless and rewarding experience for every guest. This strategy is crucial for driving H World Group revenue growth and maintaining a competitive advantage. Understanding the broader competitive landscape of H World Group is also vital for appreciating their market penetration strategies.

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H World Group positions itself as a premier multi-brand hotel operator, delivering quality accommodations and hospitality experiences across a spectrum of segments, from economy to upscale. Its brand identity is anchored in the principles of 'Seeking Truth, Perfection, and Beauty,' with a mission to foster a 'Better H World, Better Life' by prioritizing guest satisfaction, employee well-being, environmental stewardship, and mutually beneficial partnerships. This comprehensive approach allows H World to effectively cater to a diverse clientele, encompassing both business and leisure travelers, which is a core aspect of its Mission, Vision & Core Values of H World Group.

Diverse Portfolio and Market Reach

H World Group distinguishes itself through an expansive network and a diversified brand portfolio. This includes well-established brands such as HanTing Hotel, JI Hotel, and Orange Hotel, alongside the international Steigenberger Hotels & Resorts. This broad offering is key to its H World Group brand positioning in the hospitality industry.

Expansion into Upper-Mid Scale Segment

The company is actively expanding into higher-end segments to meet evolving consumer demands. In 2024, H World added 231 new hotels, primarily in the upper-mid scale segment, with brands like Crystal Orange Hotel and Intercity Hotel. A significant pipeline of 526 upper-midscale hotels indicates a 32% increase over 2023, reflecting a strategic move to enhance H World Group revenue growth.

Brand Consistency and Digital Integration

Brand consistency is maintained across all touchpoints through a unified standard and proprietary technology infrastructure. This integrated approach ensures a seamless guest experience, a critical element of its H World Group customer acquisition strategies.

Loyalty Program and Customer Engagement

The H Rewards loyalty program is central to its strategy, boasting over 277 million members as of Q1 2025. This program is instrumental in enhancing customer experience and driving direct engagement, a key component of H World Group loyalty program marketing.

Adapting to Consumer Sentiment

H World actively responds to shifts in consumer sentiment by focusing on service standards and digital innovation. Strengthened safety measures and advancements in digital technology are key priorities.

Sustainability Initiatives

The company emphasizes sustainability through its 'Green Living' program, encouraging eco-friendly practices among guests. This reinforces a positive brand image and contributes to its overall H World Group business strategy.

Brand Recognition

HanTing Hotel, a significant subsidiary, has been recognized by BrandZ as one of the top 100 most valuable Chinese brands for six consecutive years, highlighting strong brand equity.

Competitive Advantage

The combination of a diverse brand portfolio, extensive network, strong loyalty program, and commitment to innovation provides H World Group with a significant H World Group competitive advantage in the market.

Market Penetration

H World Group's expansion strategy, particularly into the upper-mid scale segment, demonstrates its commitment to H World Group market penetration strategies and capturing a larger share of the hospitality market.

Sales and Marketing Approach

The company's approach to sales and marketing is integrated, leveraging its loyalty program and digital platforms to drive customer acquisition and retention, reflecting its core H World Group sales strategy.

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H World Group's sales and marketing strategy is deeply integrated with its loyalty program and asset-light expansion. Key campaigns focus on driving direct bookings and enhancing customer lifetime value through a robust loyalty platform.

H Rewards Loyalty Program Enhancement

The continuous promotion and enhancement of the H Rewards loyalty program is a core campaign. As of Q1 2025, H Rewards membership exceeded 277 million, driving over 65% of total reservations through direct bookings, a 5.4 percentage point increase year-on-year.

'H Rewards Millionaire' Competition

Launched in March 2025 during Ramadan, this campaign incentivized H Rewards members with a chance to win 1 million points for stays at Steigenberger Hotels & Resorts in Egypt, boosting engagement and new member acquisition.

Beyond specific promotional campaigns, H World Group's business strategy incorporates ongoing product upgrades and aggressive network expansion as implicit marketing drivers. This approach aims to attract and retain customers by consistently improving the guest experience and increasing brand visibility across its portfolio.

Product Upgrade Initiatives

In Q1 2025, significant progress was made on product upgrades. 40% of Hanting Hotels reached version 3.5+, 78% of Ji Hotels achieved Ji 4.0+, and 70% of Orange Hotels met the Orange 2.0 standard.

Network Expansion

The company achieved a record 2,442 new hotel openings in 2024, surpassing its target of 1,800. This expansion significantly broadened its market presence and brand visibility, contributing to overall Revenue Streams & Business Model of H World Group.

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