Atour Lifestyle Holdings (NASDAQ: ATOL) has announced significant growth in its first quarter 2024 earnings, with net revenues increasing by 89.7% year-over-year, driven by the expansion of its hotel network and a surge in its retail business.
The company saw a robust increase in its membership base and successfully introduced new products, including the Deep Sleep Lightweight Comforter. Despite the positive revenue growth, Atour anticipates pressure on profit margins due to fluctuations in RevPAR and changes in its revenue structure.
Key Takeaways
- Atour's net revenues soared by 89.7% year-over-year in Q1 2024, reaching RMB1,468 million.
- The hotel network expanded with 97 new openings, totaling 1,302 hotels.
- Retail business GMV increased by 277%, with online sales comprising over 90% of the total.
- Membership base grew by 86%, surpassing 71 million registered members.
- The company published its inaugural ESG report, emphasizing sustainability efforts.
- Atour plans to raise its full-year revenue guidance to a 40% year-over-year increase.
Company Outlook
- Atour aims for a 40% year-over-year revenue growth for the full year.
- The company is working on optimizing cost structures and improving operational efficiency.
- New product launches in the sleep category are expected to contribute to revenue.
- Atour is preparing to open the first Atour 4.0 hotel.
Bearish Highlights
- Anticipated pressure on profit margins due to RevPAR fluctuations and revenue structure changes.
- Expectation of bigger pressure on RevPAR in the second quarter.
Bullish Highlights
- Continued growth in leisure tourism and sustainable hotel occupancy rates.
- Retail business experienced high double-digit revenue growth projections for the full year.
Misses
- Decrease in average daily rate (ADR) due to a high comparison base.
Q&A Highlights
- Atour Light 3.0 hotels exceeded RMB290 in RevPAR in Q1 and rose above RMB300 in April.
- The company is refining the Atour Light 3.0 model based on user feedback.
- Over 30 benchmark projects secured for Atour 4.0, with the opening of the first hotel imminent.
- Consideration of increasing shareholder returns, including dividends, based on performance.
Atour Lifestyle Holdings has demonstrated a strong start to 2024, with substantial growth in both its hotel and retail segments. The company's strategic expansion and product innovation appear to be resonating well with consumers, as evidenced by the impressive growth in its membership base and the popularity of new offerings like the Deep Sleep Lightweight Comforter.
While there are challenges ahead, particularly concerning profit margins, Atour's proactive measures to optimize costs and enhance operational efficiency, coupled with its ambitious growth plans, present a positive outlook for the remainder of the year. Shareholders may also look forward to potential increases in returns, aligning with the company's performance and future development strategies.
InvestingPro Insights
Atour Lifestyle Holdings (ATOL) has made significant strides in its financial performance, with a remarkable year-over-year revenue growth. This growth trajectory is reflected in the company's robust Revenue Growth of 106.19% for the last twelve months as of Q4 2023, indicating a strong market presence and an effective expansion strategy. The company's Gross Profit Margin stands at a healthy 40.97%, which showcases its ability to maintain profitability amid expansion.
Investors should note that Atour is trading at a high Price / Book multiple of 8.45, suggesting that the market holds the company's assets in high regard, potentially factoring in future growth expectations. The P/E Ratio (Adjusted) for the same period is 24.41, which, when compared to the industry average, might indicate that the company is valued fairly for its earnings performance.
An InvestingPro Tip that stands out for Atour is that the company holds more cash than debt on its balance sheet, which is a positive sign for financial stability and flexibility. Moreover, Atour is a prominent player in the Hotels, Restaurants & Leisure industry, and analysts predict the company will be profitable this year, which aligns with the company's ambitious growth plans and recent performance.
For those considering an investment in Atour Lifestyle Holdings, there are 8 additional InvestingPro Tips available that could provide deeper insights into the company's financial health and market position. To explore these tips and gain a comprehensive understanding of Atour's investment potential, visit https://www.investing.com/pro/ATOL. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - Atour Lifestyle Holdings Ltd ADR (ATAT) Q1 2024:
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Atour Lifestyle Holdings First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Today's conference is being recorded. At this time, I would like to turn the conference over to Ms. Alison Zhang, Director of Investor Relations. Please go ahead, ma'am.
Alison Zhang: Thank you, operator. Good morning and good evening, everyone. Welcome to our first quarter 2024 earnings conference call. Today, we will hear from our Founder, Chairman and CEO, Mr. Wang Haijun, and our Co-CFO, Mr. Wu Jianfeng. Before we continue, please be aware that today's discussion will include forward-looking statements under federal securities laws. These statements are subject to various risks and uncertainties, and actual results may differ significantly from what is stated or implied in our comments today. The company is not obligated to update any forward-looking statements, except as required by applicable laws. Additionally, during this call, our management will discuss certain non-GAAP financial measures solely for comparison purposes. For a clear understanding of these measures and a reconciliation of GAAP to non-GAAP financial results, please refer to the earnings release issued earlier today. Furthermore, a webcast replay of this conference call will be accessible on our website at ir.yaduo.com, where a copy of the results presentation is also available. Now, I will turn the call over to Mr. Wang, our CEO.
Wang Haijun: [Foreign Language] [Interpreted] Thank you, Alison. Hello, everyone, and thank you for joining Atour's first quarter 2024 earnings call today. [Foreign Language] [Interpreted] During the first quarter of 2024, the travel market witnessed a contrasting demand patterns. While the recovery of business travel was relatively subdued due to macro uncertainties, experience-driven leisure tourism during holidays and weekends maintained its growth momentum from 2023. As a leading upper midscale hotel brand, Atour remains dedicated to advancing the comprehensive upgrade of its experience strategy amid the ever evolving external environment. By delivering exceptional accommodation experiences, we unleashed a greater value across our unique deep sleep scenarios. We also continued to enhance and upgrade our products and services, solidifying Atour's leading position in the industry. [Foreign Language] [Interpreted] Now, I would like to provide more details on our performance for the first quarter of 2024. [Foreign Language] [Interpreted] Let's begin with our hotel business. Please turn to Slide 4 of our first quarter '24 results presentation. Our RevPAR reached RMB328 in the first quarter, representing 97.4% of its level in the same period of 2023. Notably, we achieved a sustainable OCC growth, reaching 101.1% of 2023's level for the same period, demonstrating Atour's resilient demand and leading competitiveness. However, due to a high comparison base resulting from the explosive demand for both business and leisure travel in the same period of 2023, our ADR faced some pressure in the first quarter and decreased by 2.9% year-over-year. [Foreign Language] [Interpreted] Please turn to Slide 5. Excluding structural impacts, such as the ramp up of new hotels, our mature hotels in operation for more than 18 months performed well during the quarter. Their same-hotel RevPAR was 99.7% of 2023's level for the same period, while OCC reached 102%, and ADR stood at 98.4%, both compared to the same period in 2023. [Foreign Language] [Interpreted] Please turn to Slide 6. Supported by Atour's increasing brand influence, our hotel network continued to expand and achieved high-quality growth in the first quarter. We maintained our rapid pace in network expansion with 97 new hotel openings. By the end of the first quarter, we had a total of 1,302 hotels in operation, representing a 34.5% increase year-over-year. Notably, our flagship Atour brand reached the 1,000 hotel milestone last month, underscoring our leading position in the upper midscale hotel market. [Foreign Language] [Interpreted] Please turn to Slide 7. Moreover, franchisees' confidence remained robust in the first quarter, with a continuous increase in new signings and steady pipeline growth. As of March 31, the number of hotels under development reached 674. [Foreign Language] [Interpreted] Please turn to Slide 8. Thanks to its unique positioning and immense growth potential, Atour Light 3.0 continued to gain favor among franchisees. A total of 30 new Atour Light 3.0 hotels were signed in the first quarter, accounting for more than 15% of our total new signings for the period. As of March 31, we had a total of 36 Atour Light 3.0 hotels in operation, with mature hotels' performances thriving. Despite the traditional off-season, the RevPAR of Atour Light 3.0 hotels in operation for more than three months exceeded RMB290 in the first quarter and surged to over RMB300 in April, highlighting Atour Light's strong competitive edge in the midscale segment. We anticipate that the operational performance of Atour Light 3.0 will continue to excel during the upcoming summer holiday season. [Foreign Language] [Interpreted] Please turn to Slide 9. Building upon our ethos of "Life at Ease," we are consistently introducing and refining distinctive services at Atour Light 3.0 hotels, striving to transform each hotel into an intimate oasis within its city. In the first quarter, we launched the new City Guide feature, which helps customers explore nearby dining, entertainment and other attractions, immersing them in the captivating lifestyle and the beautiful, enjoyable and comfortable experiences that are unique to Atour Light 3.0 hotels. Furthermore, we unveiled special Platinum Privileges in our Atour Light 3.0 hotels, offering our members exclusive benefits. Presently, Atour Light 3.0's comprehensive range of superior services sets the brand apart in the midscale market. [Foreign Language] [Interpreted] Furthermore, we expanded Atour Light 3.0's co-branded collaborations. For the post Chinese New Year return-to-work period and the peak interview season, we partnered with a fashion clothing brand to introduce the Suit Up Station event. This initiative, offering convenient suit rental services to Atour Light's customers, garnered widespread praise. It not only boosted Atour Light's brand visibility, but also addressed the needs of young business travelers during their trips, conveying a distinctive lifestyle and further strengthening the quintessential Atour signature experience. [Foreign Language] [Interpreted] Moving now to our retail business. Please turn to Slide 10. Retail sustained its strong performance in the first quarter, with quarterly GMV up by 277% year-over-year to RMB495 million. Sales from online channels continued to flourish, accounting for over 90% of the total GMV in the first quarter. [Foreign Language] [Interpreted] Atour's deep sleep products continued to attract high market recognition. We are devoted to understanding the deep sleep scenarios, identifying customers' sleep pain points and continuously developing and launching new products. Through the expansion of our product categories, we aim to provide customers with enhanced solutions for an optimal deep sleep experience. [Foreign Language] [Interpreted] Please turn to Slide 11. Following the success of our popular products like Deep Sleep Pillow PRO and the Deep Sleep Temperature Control Quilt, we leveraged our proprietary product development process to delve deeper into customers' fundamental needs for lightweight bedding during the summer season. On March 10th of this year, we proudly introduced another standout addition to our Deep Sleep series, the Deep Sleep Lightweight Comforter. Crafted from imported breathable and moisture-wicking fibers, the core of our lightweight comforter enables efficient heat dissipation, fostering a natural sense of coolness for customers. Moreover, to elevate the deep sleep experience with superior comfort and touchability, we departed from the conventional design of a comforter with a removable cover. Instead, our one-piece comforter is reversible with A and B side made from distinct materials. The A side features natural cooling fabrics, while the B side is fashioned from a cozy fabric with moisture content akin to human skin, allowing customers to quickly switch from cooling to warmth. Because the integrated cover design imposes heightened cleaning and the maintenance requirements, our Deep Sleep Lightweight Comforter is machine washable and it can be air or machine dried at low temperatures, bringing customers an easy care, minimalist deep sleep experience. [Foreign Language] [Interpreted] Since its debut, the Atour Deep Sleep Lightweight Comforter has garnered widespread acclaim. Its GMV soared past RMB10 million just in 21 days after its release and continues to maintain robust growth momentum. In April, the Deep Sleep Lightweight Comforter topped the sales charts for comforters on both Douyin and JD (NASDAQ:JD).com and ranked among the Top 10 in sales on Tmall. [Foreign Language] [Interpreted] The surging sales of our Deep Sleep Lightweight Comforter are yet another testament to Atour's profound insights and exceptional understanding of deep sleep, as well as our efficient product research and development capabilities. We are passionate about enhancing customers' sleep experience and remain dedicated to crafting innovative, upgraded solutions to amplify customers' recognition of the Atour Planet Deep Sleep series. [Foreign Language] [Interpreted] Transitioning to our membership business. Please turn to Slide 12. Our thriving brand recognition, coupled with our top-tier products and services, has inspired a growing number of customers to join the ACARD membership program, leading to a rapid expansion of our membership base. As of March 31, our registered individual members increased by 86% year-over-year, surpassing 71 million. Additionally, our CRS channel experienced a steady growth in the first quarter, with a 65.1% contribution to the total room nights sold in the first quarter, increasing by 2.6 percentage points from the same period of last year. [Foreign Language] [Interpreted] In addition, we have continued to promote the integration of both accommodation and retail members, further solidifying the foundation of our comprehensive and unified ACARD membership ecosystem. Please turn to Slide 13. We plan to offer multi-scenario membership points and benefits, thus funneling customers from different scenarios into the unified ACARD membership system. We will also identify and push the boundaries of product and service innovation. Together, these initiatives will create an integrated membership experience for our customers, while enhancing ACARD's brand recognition, ultimately empowering us to create a virtuous cycle and achieve greater synergies between the accommodation and retail business. Meanwhile, we will leverage our growing customer insights to provide our customers with more tailored product recommendations and personalized offline accommodation experiences, thereby, strengthening Atour's experiential advantages. [Foreign Language] [Interpreted] Last but not least, I am delighted to announce that Atour has published its inaugural ESG report. Please turn to Slide 14. As a leader in providing a quality lifestyle and an advocate for the Chinese experience, Atour consistently pursues win-win outcomes for the environment, our industry and society as a whole by integrating ESG best practices across our business operations. In 2023, we further enhanced our ESG governance to help build warm connections between people as well as between people and nature. We strove to establish an efficient, orderly and responsible management mechanism and foster mutual growth among Atour, our employees, franchisees and partners. Through a broad array of charitable projects, eco-friendly operational upgrades, diversity and inclusion initiatives and green development efforts, we upheld our original aspirations while assuming our corporate social responsibility. Moving forward, we will holistically deepen our commitment to ESG, augmenting our contributions to society and the industry's sustainable development. [Foreign Language] [Interpreted] Now, I will turn the call over to our Co-CFO, Mr. Wu Jianfeng, to discuss our financial results.
Wu Jianfeng: Thank you, Haijun. Good morning and good evening, everyone. Now, I would like to present the company's financial performance for the first quarter of 2024. Please turn to Slide 16 of the results presentation. Our net revenues for the first quarter of 2024 grew by 89.7% year-over-year and decreased by 2.5% quarter-over-quarter to RMB1,468 million. The year-over-year increase was driven by robust growth in both the hotel and the retail businesses. The quarter-over-quarter decrease was caused by the decrease in RevPAR, which was RMB328 for the first quarter of 2024 compared with RMB358 for the previous quarter, and also was due to the renovation of one of our leased hotels. Revenue from our manachised hotels for the first quarter of 2024 were RMB836 million, up by 87.1% year-over-year while decreasing 1.8% quarter-over-quarter. The year-over-year increase was primarily fueled by the ongoing expansion of our hotel network and the rapid growth of the supply chain business. The total number of manachised hotels increased to 1,,271 as of March 31, 2024, up by 35.9% year-over-year. The quarter-over-quarter change was due to the decrease in RevPAR. RevPAR of our manachised hotels was RMB324 for the first quarter of 2024 compared with RMB353 for the previous quarter. Revenues contributed by our leased hotel for the first quarter of 2024 were RMB168 million, representing a decrease of 10.3% year-over-year and 13.8% quarter-over-quarter. This decline was mostly driven by the renovation of one of our leased hotels into our first Atour 4.0 hotel as well as the decrease in RevPAR. RevPAR of our leased hotels was RMB455 for the first quarter of 2024 compared with RMB464 for the same period of 2023 and RMB495 for the previous quarter. Revenues from our retail business for the first quarter of 2024 were RMB417 million, up by 268.9% year-over-year and 1.1% quarter-over-quarter. These increases were attributable to the widespread recognition of our retail brands and the compelling product offerings as well as improved product development and distribution capabilities. Revenues from other for the first quarter of 2024 were RMB48 million, up by 76.8% year-over-year and 1.7% quarter-over-quarter. The increases were driven by the fast-growing membership business. Now, let's move to cost and expenses. Please turn to Slide 17. Operating costs and expenses for the first quarter of 2024 were RMB1,154 million, including RMB3 million share-based compensation expenses, compared with RMB719 million, including RMB142 million share-based compensation expenses for the same period of 2023. Hotel operating costs for the first quarter of 2024 increased by 73.5% year-over-year and decreased by 9.7% quarter-over-quarter to RMB662 million. The year-over-year increase was mainly due to the increase in variable costs, such as supply chain costs associated with the ongoing expansion of our hotel network. The gross margin of our hotel business was 34.1% for the first quarter of 2024 compared with 39.8% for the same period of 2023. This decrease was attributable to a decreased RevPAR and an increased share of revenue generated by the lower-margin supply chain business. Retail cost for the first quarter of 2024 increased by 235.0% year-over-year and decreased by 11.2% quarter-over-quarter to RMB206 million. The year-over-year increase was associated with the rapid growth of our retail business. The gross margin of our retail business was 50.5% for the first quarter of 2024 compared with 45.5% for the same period of 2023. The increase in gross profit margin of retail business was attributable to an increasing contribution from higher-margin online sales. Now, please turn to Slide 18. For -- selling and marketing expenses for the first quarter of 2024 were RMB175 million compared with RMB56 million for the same period of 2023. The increase was mainly due to our increased investment in brand awareness and effective online channel development along with the growth of retail business. Selling and marketing expenses accounted for 11.9% of net revenues for the first quarter of 2024 compared with 7.2% for the same period of 2023. General and administrative expenses for the first quarter of 2024 were RMB77 million, including RMB3 million share-based compensation expenses, compared with RMB193 million, including RMB141 million share-based compensation expenses, for the same period of 2023. Excluding the share-based compensation expenses, the increase was primarily due to the increase in labor cost. General and administrative expenses, excluding the share-based compensation expenses, accounted for 5.0% of revenue for the first quarter of 2024 compared with 6.7% for the same period of 2023. Technology and development expenses for the first quarter of 2024 were RMB24 million compared with RMB17 million for the same period of 2023. The increase was mainly due to the increased investment in technology, systems and infrastructure to support our expanding hotel network and retail business as well as improve the customer experience. Technology and development expenses accounted for 1.6% of net revenues for the first quarter of 2024 compared with 2.2% for the same period of 2023. Now, please turn to Slide 19. Adjusted net income for the first quarter of 2024 was RMB261 million, up by 63.4% year-over-year. Adjusted net profit margin for the first quarter of 2024 was 17.8%, a decrease of 2.9 percentage points year-over-year. Adjusted EBITDA for the first quarter of 2024 was RMB354 million, up by 53.1% year-over-year. Adjusted EBITDA margin for the first quarter of 2024 was 24.1%, a decrease of 5.8 percentage points year-over-year. The decreases in both margins were primarily due to the decrease in RevPAR and the increased revenue contribution from lower-margin supply chain business as well as organic growth of selling and marketing expenses amid the retail business development. Now, please turn to Slide 20 and 21. Notably, we have maintained a healthy cash position with stable growth momentum. As of March 31, 2024, our cash and cash equivalents totaled RMB3,048 million. Among them, net cash was RMB2,956 million. That concludes our financial highlights for the first quarter of 2024. With that, let's open for Q&A.
Operator: Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of CICC, Sijie Lin. Please go ahead, Sijie.
Sijie Lin: [Foreign Language] I will translate my question to English. So, thank you management. Congrats on the very fast hotel opening in Q1. The 97 new openings, almost achieved highest quarterly level last year, and the revenue growth is also big. So, will we adjust the full year opening revenue and profit guidance accordingly? Thank you.
Wang Haijun: [Foreign Language] [Interpreted] Thank you, Sijie. Let me try to answer your question. Although we saw some fluctuations in the RevPAR of the entire industry in the first quarter this year, but from the franchisees level, confidence in the hotel industry is still sufficient. And our signings in the first quarter also maintained rapid growth. And projects in our pipeline continued to expand, reaching 674. [Foreign Language] [Interpreted] In terms of new openings, in this first quarter, we opened 97 new hotels, continuing the trend in fourth quarter last year. This year, based on the strategic targets of having 2,000 premier hotels by 2025, we will put forward higher requirements for quality and consider quality as a prerequisite for quantity growth. Based on this, we would like to maintain our target of 360 new openings for the full year, and we stay fully confident about achieving that. [Foreign Language] [Interpreted] In terms of revenue, despite some fluctuations in RevPAR we saw, we still expect the group's 2024 revenue to maintain a high-quality growth. And based on the outstanding performance in the first quarter, especially in our retail business, we would like to raise this year's revenue guidance from what we announced last quarter, the original 30% year-on-year growth to a new growth of 40% year-on-year, maintaining a growth rate leading the industry. This is mainly due to the continued expansion of our hotel network and the contribution of our rapidly-growing retail business. At the profit level, the fluctuation of the overall RevPAR and the change of the company's revenue structure this year will bring certain pressure on our profit margin level. However, we will continue to optimize our cost structure, improve the efficiency of management and operations, and we expect to keep a relatively stable profit margin level. Okay. Thank you.
Alison Zhang: Thank you, Sijie.
Sijie Lin: Thank you.
Alison Zhang: Let's take next question.
Operator: Thank you. Our next question comes from the line of Dan Chee from Morgan Stanley (NYSE:MS). Please ask your question, Dan.
Dan Chee: [Foreign Language] Please allow me to translate my questions. Can the management share the recent blended RevPAR trend in second quarter and in particularly occupancy and ADR's respective performance? And what's the company's most updated view on your blended RevPAR for full year 2024? Thank you.
Wang Haijun: [Foreign Language] [Interpreted] Thank you, Dan. Let me try to answer your questions. Our RevPAR in first quarter was RMB328, which was down by RMB9 compared to the same period last year. OCC was 73.3%, 0.8 percentage points higher than the same period last year. ADR was RMB430, down by RMB13 from the same period last year. [Foreign Language] [Interpreted] If we narrow down to our 843 mature hotels in operation for more than 18 months, the same hotel RevPAR performance in first quarter this year stood at 99.7%, which was basically unchanged from last year. [Foreign Language] [Interpreted] To separate OCC and ADR performances, last year's concentrated bursts of business and leisure travel to a certain extent drove the price base higher and imposed relatively more pressure on this year's price. Since April, including the Labor Day holiday, we have also seen such situation. According to QTD data, our Q2 RevPAR might have bigger pressure than in Q1. [Foreign Language] [Interpreted] As for the forecast on 2024 full year RevPAR, due to multiple factors affecting its performance, it is rather difficult to give a relatively accurate RevPAR forecast. Seeing from now, the uncertainty of this year exceeds our previous expectation. And in this current environment, our strategy is to prioritize stabilizing our OCC base, while also seize the core opportunities in revenue.
Alison Zhang: Thank you, Dan. Next question, please?
Operator: Thank you. Our next question comes from the line of Xin Chen from UBS. Please ask your question, Xin.
Xin Chen: [Foreign Language] We noticed that in Q1, relatively more off-season, the company's revenue from [the two] (ph) business still maintained a very strong growth. Would the company mind sharing your expectations on the Atour revenue over the whole year and your expectations on expenditure in retail business? And the second question is that on product level, the Summer Cool Quilt launch very much achieved good results. Could you share about some follow-up planning on products? Thank you.
Wang Haijun: [Foreign Language] [Interpreted] Thank you, Chen Xin. Let me first talk about the overall retail business and product planning, and then I'll pass it on to Jianfeng to add on retail financials later. I think, based on our insights into the real sleep needs for users, our strategy with Atour Planet's Deep Sleep products has been kept on becoming known to people outside of the hotel industry and continued to gain users' confidence and recognition. And that promoted the excellent performance of our retail business. Our product R&D capacity based on user needs has been verified, once again, by the outstanding performance of our new product this quarter, Deep Sleep Lightweight Comforter. This year, in the next quarters, we will continue to focus on Deep Sleep products and carry on launching the next-generation of Deep Sleep pillows or Deep Sleep temperature control quilt in the next coming quarters. While continuing to expand the sleep categories, we will also be continually deepening and solidifying our advantages categories. Now, Jianfeng, could you please add some more onto the retail financials?
Wu Jianfeng: [Foreign Language] [Interpreted] Thank you, Chen Xin. On our retail, revenue in first quarter reached RMB417 million, maintaining a rapid growth momentum. Based on that strong retail performance, we do expect our retail business to achieve high double-digit year-over-year revenue growth for the full year. Meanwhile, our retail business is still in a process of rapid development. And that means, we will continue to deepen investment in building a solid foundation for longer-term growth, branding and channels. In terms of the sales expenditures you mentioned in your question, Chen Xin, our retail business in first quarter coordinated campaigns and promotions with high efficiency. The sales expenses in the next few quarters will fluctuate slightly, echoing to our rhythm in new product launches and plans on branding campaigns. But it is expected to maintain a relatively stable level for the full year. Now that with our growing scale of retail business, its margin level has been continually improving. And we are confident that the retail business will bring more incremental earnings to the group and more value to our ecosystem. Thank you.
Alison Zhang: Thank you. Next question, please?
Operator: Thank you. The next question comes from [Jiawei Liu from Citi] (ph). Please ask your question, Jiawei.
Unidentified Analyst: [Foreign Language] I'll translate my question. About the hotel openings, could you please share the opening goals for Atour Light 3.0 this year? Also, an update on how the Atour 4.0 hotels are coming along? Thanks.
Wu Jianfeng: [Foreign Language] [Interpreted] Thank you, Jiawei. Let me answer that question of yours. In first quarter, there was a total of 30 signings for Atour Light 3.0, accounting for more than 15% of our total new signings. As of the end of March, 36 Atour Light 3.0 hotels are in operation. We expect that by the end of this year, the number of Atour Light 3.0 hotels in operation will reach about 100. [Foreign Language] [Interpreted] Like Haijun just now have mentioned, we focus on the concept of Life at Ease and consistently introducing and refining distinctive services at Atour Light 3.0 hotels to better meet the needs of young business travelers and won their recognition. Atour Light 3.0 hotels have had eye-catching performances in first quarter, a commonly off-season. The RevPAR of those Atour Light 3.0 hotels in operation for three months above had exceeded RMB290 in the first quarter and quickly rose to above RMB300 in April, far exceeding the expectations from those franchisees. [Foreign Language] [Interpreted] At the same time, based on the operation status and user feedback we gathered from those Atour Light 3.0 hotels in operation, we are gradually refining the Atour Light 3.0 model to bring better and better experience to users, while also bring sustainable and stable returns to the franchisees. [Foreign Language] [Interpreted] And you mentioned our Atour 4.0. Since Atour 4.0's launch at the end of last year, we have secured more than 30 benchmark projects in the core business areas of key cities. The opening of the first Atour 4.0 hotel is also in busy preparation and will happen soon. It will be worth your waiting. Thank you.
Alison Zhang: Thank you, Jiawei. And operator, we can take one more question. Thank you.
Operator: Thank you. Our final question comes from the line of Lydia Ling from Citi. Please ask your question, Lydia.
Lydia Ling: [Foreign Language] Thanks, management. And I would like to ask if the management has any plans in terms of the returns to shareholders? Thank you.
Wang Haijun: [Foreign Language] [Interpreted] Thank you, Lydia. And in terms of shareholder returns, we have always attached importance to and practiced continuous returns to shareholders. In August last year, we announced a one-time dividend. This year, we will continue to act upon the overall operating performance, cash position, future business development plan, industry common practices and to consider plans to increase shareholder returns, including dividends. We are committed to sharing the benefits of development with our shareholders. Thank you.
Alison Zhang: Thank you, Lydia.
Operator: Thank you. And that concludes the question-and-answer session. I'd now like to turn the conference back to Alison Zhang for any additional or closing comments.
Alison Zhang: Thank you all for joining us today. If you have any further questions, please feel free to contact our IR team. We look forward to reconnecting with you next quarter. Thank you, and goodbye.
Operator: This concludes today's conference call. Thank you for participating. You may now disconnect.
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