Revenue Under Pressure
GreenTree Hospitality Group Ltd. (NYSE: GHG), China's fourth-largest hospitality company by hotel count, reported Q2 2026 total revenues of RMB 235.1 million ($34.7 million), an 18.7% year-over-year decline, as softness in both its lodging and restaurant foodservice segments weighed on the top line. Hotel revenue of RMB 204.6 million ($30.2 million) fell 16.2%, driven by a 9.1% slide in blended RevPAR to RMB 103 and the net closure of 13 leased-and-operated properties since the same quarter of 2025. Restaurant revenue of RMB 30.5 million ($4.5 million) dropped 33.5%, reflecting a 20.3% decline in average daily sales per store to RMB 2,893 alongside two net L&O store closures.
Despite the revenue contraction, the company's cost-reduction program largely held operating income steady. Income from operations reached RMB 48.2 million ($7.1 million), essentially flat against RMB 49.2 million a year earlier, for an operating margin of 20.5%. The restaurant segment swung from an operating loss of RMB 1.0 million in Q2 2025 to operating income of RMB 1.6 million in the current period, a meaningful structural improvement for the foodservice arm.
Non-GAAP Profit Grows
GreenTree's core net income (non-GAAP) — which strips out investment gains, subsidies, and one-time items — rose 4.4% to RMB 47.2 million ($7.0 million), pushing the core net margin to 20.1% from 15.6% a year ago. That signals the underlying franchise-and-managed business is generating more durable earnings even as reported GAAP net income fell sharply to RMB 21.3 million ($3.1 million) from RMB 160.0 million in Q2 2025; the prior-year figure was inflated by a one-time gain on the divestiture of the company's Argyle ownership stake and fair-value movements in securities holdings. Adjusted EBITDA (non-GAAP) came in at RMB 68.9 million ($10.2 million), down 12.1% year over year, with an Adjusted EBITDA margin of 29.3% versus 27.1% in Q2 2025.
G&A expenses fell 35.0% year over year to RMB 28.1 million ($4.1 million), driven by lower staff costs, reduced credit-loss provisions on accounts receivable, and lower consulting fees — a clear sign of active overhead discipline across both the hotel and restaurant divisions. Operating costs declined 20.0% to RMB 146.5 million ($21.6 million), aided by the contraction of the higher-cost leased-and-operated portfolio.
Network & Outlook
GreenTree's hotel count grew to 4,615 properties with 330,029 rooms as of June 30, 2026, up from 4,509 hotels and 321,977 rooms a year earlier. The company opened 18 hotels in Q2 2026 and held a pipeline of 1,278 hotels under contract or development. The mid-to-upscale tier reached 596 hotels, growing faster than the overall portfolio. The restaurant network expanded to 198 locations across 53 cities, including 180 Da Niang Dumplings units and 18 Bellagio units.
On the foodservice and hospitality side, management flagged two near-term property bets. A hotel property near the Petronas Twin Towers in Malaysia was handed over in July 2026 and is slated to anchor GreenTree's Southeast Asian expansion. A landmark Huangpu River waterfront site in Shanghai's Yangpu District — expected to close before end of Q3 2026 — is planned as a mixed-use flagship combining hotel rooms, a curated food-and-beverage lifestyle center, and corporate offices. The company maintained its full-year 2026 revenue guidance for the hotel segment, projecting a 10% to 15% year-over-year decline. Separately, the board authorized a $5 million share repurchase program over two years.
Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.
