Good day and good evening and welcome to the GreenTree Hospitality Group Ltd. Fourth Quarter and Fiscal Year 2019 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Rene Vanguestaine. Please go ahead sir.

Thank you, Andrew. Hello everyone and thank you for joining us today. GreenTree's earnings release was distributed earlier today and is available on our IR website at ir.998.com, as well as on PR Newswire services. As a reminder, we also posted a PowerPoint presentation that accompanies our comments today to the same IR website. On the call today from GreenTree are Mr. Alex Xu, Chairman and Chief Executive Officer; Selina Yang, Chief Financial Officer, Ms. Megan Huang, Director of IT Department; and Mr. Nicky Zheng, IR Manager. Mr. Xu will present the company's Q4 and full year 2019 performance overview; followed by Ms. Huang who will discuss business operations; and Ms. Yang will then discuss financials and guidance. They will be available to answer your questions during the Q&A session that follows. Before we begin, I'd like to remind you that this conference call contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminologies such as may, will, expects, anticipates, aims, future, intends, plans, believes, estimates, continue, target, is or are likely to, going forward, confident, outlook and similar statements. Any statements that are not historical facts, including statements about the company and its industry are forward-looking statements. Such statements are based upon management's current expectations and current market and operating conditions and relate to events that involve known and unknown risks, uncertainties, and other factors, all of which are difficult to predict and many of which are beyond the company's control, which may cause the company's actual results, performance, or achievements to differ materially from those in the forward-looking statements. You should not place undue reliance on these forward-looking statements. Further information regarding these and other risks, uncertainties or factors is included in the company's filings with the U.S. Securities and Exchange Commission. All information provided, including the forward-looking statements made during this conference call are current as of today's date. The company does not undertake any obligation to update any forward-looking statement as a result of new information, future events, or otherwise, except as required under applicable law. It is now my pleasure to introduce our Chairman and Chief Executive Officer, Mr. Alex Xu. Mr. Xu, please go ahead.

Thank you, Rene and thanks everyone for joining our fourth quarter earnings call today, GreenTree's eighth consecutive quarter of solid operating financial performance. Let's start with slide number five. By the end of December 2019, we had to grow our geographic coverage to 339 cities across China with 3,957 hotels in operation, up 43.5% over the prior year. Compared with the fourth quarter of 2018 total revenue in Q4 grew 20.4% to RMB289.4 million; net income increased 48.9% to RMB74.5 million; and non-core -- and non-GAAP EBITDA rose 11.4% to RMB162.3 million. For the full year, total revenues grew 20.6% over 2018 to RMB1.1 billion; net income increased 17.9% to RMB437.8 million, and non-GAAP adjusted EBITDA rose for 12.1% to RMB594.1 million. Our operating performance remains solid. Our blended ADR increased the 3.6% year-over-year to RMB170, while our occupancy rate had a small 2.2 percentage decrease to 78.2%, that's primarily due to the consolidation of the Urban Hotels. And RevPAR price increased 0.9% to RMB133. For the full year, blended ADR increased 3.6% over 2018 to RMB170. Occupancy slightly decreased by 1.2% to 80.9% and RevPAR increased 2.0% to RMB137. We further grew our market presence across China. In the fourth quarter of 2018, we opened 190 hotels and we end the year with 949 hotels in our pipeline, up 121% year-over-year. We also completed the consolidation of Argyle Hotel's management group in Q2, and the Urban Hotel Group in December 2019. Both changes are highly complementary to GreenTree's, hotel portfolio and the geographic coverage. We strengthened our cooperation with the Gingko Education Group, providing entrepreneurial training to graduates majoring in hotel management. Our own Cosmos call it set up more than 1,700 of targeted training courses to accelerate talent development that waving our company and especially during the prepared…

Thank you, Alex. Moving to slide 10, at the end of the fourth quarter, we operated 3,957 hotels, 43.5% higher than a year ago. 34 of these hotels were leased and operated or L&O hotels and 3,923 were franchise and managed or F&M hotels, while the mid-scale segment remains the core of our business with almost a 65% of our hotels. Last year, we expanded more into both the higher end and economy segments of the market. By the end of 2019, the number of hotels in the mid-to-upscale and luxury segments increased to 7.2% of the total portfolio and the economy segment grew to 28% with the consolidations. On slide 11, you can see that in the fourth quarter, we open 190 hotels compared to 224 in Q4 2018, down 16.2%, 29 were in the mid-to-upscale segment, 81 in the mid-scale segment, and 80 in the economy segment, 14 were in Tier 1 cities, 37 in Tier 2 cities, and the remaining 139 were in Tier 3 and other cities in China. Meanwhile, we closed 41 hotels, nine due to brand upgrades, 20 due to non-compliance with our brand and operating standards, and 12 due to property-related issues. So, net-net, we added 149 hotels to our portfolio. Slide 12 shows the growth in our pipeline of new hotels. As you can see, our pipeline increased from 652 on September the 30th to 949 on December the 31st, more than double our pipeline at the end of 2018. Around 36 -- 38% of these hotels are in a mid-scale segment, about 37% in the economy sector, and around 25% in the mid-to-upscale and the luxury segment as we continued our accelerating expansion into the mid-to-upscale and luxury segments. Slide 14 shows that the fourth quarter saw improvements in operating performances across Board. Our F&M Hotels' occupancy rate dips slightly from 80.7% to 78.4%; ADR improved 3.9% to RMB169, and RevPAR increased 0.9% to RMB133. Slide 15 shows the same operating metric for the full year. Our F&M Hotels' occupancy decreased from 82.3% to 81.1%, ADR improved 3.6% to RMB169, RevPAR increased 2.1% to RMB137 and our L&O Hotels' ADR was up 3.1% to RMB211. Slide 16 shows quarterly RevPAR change, also RevPAR for our L&O -- although RevPAR for our L&O Hotels decreased 1.2% year-over-year to RMB135. RevPAR for our F&M Hotels increased 0.9% to RMB133. With that, I'll pass the call over to our CFO, Lena Yang.

Thank you, Megan. Please turn to slide 18. During this quarter, combined total revenues grew 20.4% year-over-year to RMB289.4 million. This growth was primarily due to four factors; the opening of 190 new F&M Hotels, improved RevPAR, growth in our royalty membership program, and consolidation of Urban and Argyle Group into our financial statements. Growth was partially offset by the renovation of six L&O Hotels. Total revenues for our F&M Hotels rose 20.3% to RMB220.9 million with total revenue from L&O Hotels rose 20.9% to RMB68.6 million. During the year, total revenue rose by 20.6% to RMB1,091.8 million and total revenue for F&M Hotels was RMB838.4 million, up 21.0% year-over-year, and total revenues for our L&O Hotels was RMB253.4 million, up 19.2% year-over-year. Slide 19 shows the total operating costs were RMB92.6 million, up 28.7% year-over-year. This increased across cost net expansion costs for our F&M Hotels, higher depreciation and amortization, higher one-time renovation costs for fixed L&O Hotels and operating costs of Argyle and Urban. Excluding the impact from newly consolidated entities Argyle and Urban, hotel operating costs of this quarter increased 13.2% year-over-year. For the full year, hotel operating costs was RMB338.8 million, up 23.5%. Selling and marketing expenses in the fourth quarter were RMB23.2 million, up 66.9% year-over-year. This increase was mainly made up of incentive bonuses and the marketing and other costs associated with brand promotion and with Argyle and Urban. Excluding Argyle and Urban's expenses and extraordinary costs, selling and marketing expenses in this quarter increased 12.2%. And for the year selling and marketing expenses were at RMB85.0 million, up 79.3% from the prior year. General and administrative expenses were at RMB79.6 million, up 212.4% year-over-year. This was due to increased IT research and the development across legal due diligence expenses, M&A and other consulting…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Justin Kwok of Goldman Sachs. Please go ahead.

Hi, Alex and everyone. Thanks for taking my question. And I hope everyone is safe, healthy and well and evening. Perhaps I'll get off with three questions. I'll just lay them out now and then you can just take it one-by-one. The first question that I want to get a sense on how management derived the 10% to 15% decline in the full year revenue, in terms of what kind of ramp up in your operations into Q2, into the second half of the year that you are anticipating some color on the occupancy or RevPAR changes will be very helpful. And at the same time are you anticipating further franchisees wavier or support into the rest of the year? Or you do expect the franchisees number to move back to a normal size? So, that's the first question on how did you get to the revenue growth. The second question is on the cost side. So, it seems that you've got some one-off costs related to all the M&A and the one-off expenses, so your margins was declined on year-over-year basis, can you just kind of walk through us some pro forma numbers? If you exclude these one-off, what would the margins be into -- like 2020 given now you would have been a full year number with these new acquisitions, where would the margins kind of roughly at? And then the last one is on the M&A, can you remind -- I'm not sure whether you mentioned that in the call, I might have missed it, what would be your capacity now for M&A as of the end of the year? And what kind of targets you're looking -- I mean what kind of opportunities you're looking at at this stage, given potentially there is some liquidity squeeze event in China, are you turning even more -- or are you seeing more aggressive targets you can do now given now you're -- you started off with very good financial position into the year? I will stop here. Thank you.

Thank you, Justin. This is Alex. And likewise the best and be safe to everybody on the phone call. With regard to how we arrived to 10% to 15% guidance for the year, and that's based on our ramp-up period, we think there's a continued ramp-up period in the second quarter, and third quarter, and all the way to the fourth quarter. So, the recovery will not be nearly like the -- will take the same times as is go down to go out with takes a little bit longer. But the detailed number I'll have Selina to address her rationale arriving that 10% to 15%. Selina?

Thank you, Alex and thank you for getting questions. The full year's forecast was made by [Indiscernible] forecast. And for each forecast that's driven by two major operational metrics, number of newly opened hotels and growth of RevPAR. First quarter, we experienced the most difficult time and with our occupancy, that's about 60 -- that's about 62% of our normal condition. And as you can see by the end of March, our occupancy rate has heaped more than 60%. And our -- afterwards the occupancy rate cannot climb up as epidemic was under good control. So, during the February and the March, our occupancy rate doubled from the lowest level. And that's why we had HPV; it's more than 50%. And in our forecast in the second quarter, occupancy rates will continue to recover gradually. And by the end of the second quarter, the occupancy rate is most likely to exceed 80%. And in the third quarter, the occupancy rate will remain the highest level of the full year 2020. But because the last year third quarter, is also the hottest season during the full year. So, that means our year-over-year growth speaking, -- there year-over-year growth decrease, but the absolute value will be the highest of this year. And in the fourth quarter, our -- in our forecast occupancy rates will resume to the same level as the fourth quarter. So that means year-over-year decrease -- no decrease anymore, even be a little higher than the last few years' occupancy rates. And during the whole years, our ADR level remains at nearly the same as the last two years. That is from our experience from the first quarter of 2020. So, accordingly, the revenue will reach the same level as one year ago to the fourth quarter. So, we think we -- our forecast is very conductive and in line with this assumption that we achieved the decline of 10% to 15% of revenues for this year.

Okay, Justin let me add one more thing. And even though, the first time I looked at a number, I find that that is a little bit of probably aggressive. But later we looked at it because we also have the addition of new hotels adding to the pipeline, so -- and being opened; especially we have accumulated them more from the year end of last year. And you can see our pipeline has been doubled from the year ago the Q4 2018. So, with those hotels being opened and put into actions, so believe I believe that overall, we should be able to achieve that number. With regard to your second question about -- the second part of this question, whether we're going to consider additional fee waivers. And so our fee basically waived certain fees for our franchisees and that waiver is going to be finished and terminate expires and with the lift of the shelter in place. And so we -- I think we are in pretty lucky in the past year or the two that we have always convinced our franchisee to be conservative and not to be too aggressive. So, a more -- a lot of our franchisees position financial position-wise are very good. So, we expect our franchisees will recover also very, very rapidly from the crisis. So, with regard to the second question, the cost side and those are few issues there that from -- Selina to give the detail of each item, roughly the numbers that are core -- pro forma core costs really have not increased that much and we're trying to be sensitive to the last year, especially with a tougher year because there's so many brands popping up in China and some of them have already closed down and…

Thank you, Alex. So, Justin can you may ask -- can you repeat your question for the detailed member so that I can clarify the question.

So, yes, maybe just quickly on the -- given your adjusted EBITDA margin was down year-over-year, obviously, I think Alex also mentioned some one-off items that included writing of something and then also the M&A cost expensing all these. So, can I just check on like-for-like basis or core basis, what should be the margins and actually in 2020, what would the margins outlook be?

Thank you. Thank you. Yes. As I just explained in, our debt is the two reasons. The first one is bad debt provision that's due to the outbreak of COVID-19, so that is about five -- that is about 4% here impacted for EBITDA margin, and the one-time fees that is about 1% of the impact of the EBITDA margin.

Great. Thank you. Just the last part of the question is about M&A --

Correct. Correct. The third question we want to give you -- that gave you color on that. Last year what happened is that we generated an operating cash flow roughly about 500 million units ballpark number, so don't quote me. And so we have made roughly $1.2 billion investment, that's variety consists of we pay the dividends. And we also invested in some key strategically located property hotels near the railway station. And then we also made and true investment and actually in the one is -- one is the Gingko, the one is the -- our New Century Hotels and then understand that the face portions we made also the two of the merger acquisition with Argyle and with the Urban. And finally, we made a number of investments -- you noted financial system to franchisees. So, combined that we have $1.2 billion, I think all of them are producing great results, we're producing great results for the company in future. And even with -- so, with that, that our cash balance I think grew up from what 2.3 billion to 1.8 billion because we tapped into the cash we have and the current situation and the current situation, I think we're glad we're not as aggressive as last year in both property development, as well as in hotel development as well as the acquisitions. And so this gave us a skill and resource to evaluate and we are currently evaluating and several smaller and complimentary geographically and brand-wise opportunities. And that yes, we are going to systematically to evaluate, but we also think that the China and overseas are kind of very different. And because I think that our system economic system, and the support and that we receive were lot of -- I think it will be a while I think before we see great opportunities or service. I think right now there are some, but I think we'll still keep on looking to see whether there is a recovery speed. If the recovery speed is slower and there will be more -- I do believe there will be more opportunities out there, but we want to be disciplined as always. And we also want to be disciplined and because a lot of our shareholders even the expected sum of the dividends, so we looked at our income for this year, the revenue and expense and we looked at the cash flow, we think that we are also able to continue to stick to our dividend policy. So, that's the -- and I also welcome everybody online, because you have -- you may have a lot of leads to recommend to us and if there are target that can create a win-win situation for us. So, Justin, thank you so much for all those wonderful questions.

Thank you.

The next question comes from Praveen Choudhary of Morgan Stanley. Please go ahead.

Thank you very much for taking my question. Hi, Alex, hi, Selina. Thanks for the presentation and answering these questions. I have two questions. First one is could you talk about the current demand situation after the coronavirus outbreaks, especially in March or in April? I'm trying to understand what part of the occupancy increase coming from business versus leisure? Also I want to understand how much is this for the occupancy increases because of the local demands like people who live in the same city? Because we are seeing very little train increases or the transportation helping people to go from one place to another. So, want to understand what's driving that demand come back and -- so that we can understand when we do eventually get to normalize? The second question is more related to the Urban and Argyle acquisition wanted to understand a lot more about Urban, we thought that they had 700 hotels. So, question is do they have the same franchise rate take rate of 7%, 8%? What percentage of the pipeline increases because of Urban? So, anything you can talk about urban impact on both pipeline, revenue, as well as EBITDA for fourth quarter, so we can model it properly that'll be very useful? Thank you so much.

Thanks Praveen. The demand you elaborate a little bit and then Selina can add on top of that. And you are correct, by looking at the traffic; a lot of our demand are continuously to be for those -- for those workers and resume back to the job, to the factories, and to the companies. So, and that's created a major demand for hotels and that is one of the reason a lot of our hotels have so-called a self-quarantine room. That is when you travel from different cities and you should -- typically the company will recommend you stay in a place for 14 days. And there are also some local demand that the inter -- we call the inter-province inter-cities. And so those are the two primary demand for our hotel. So, leisure have not yet -- other than in certain leisure locations, we know, for instance, you probably read a story in [Indiscernible] when the government opened the resort, the no fee and then that was a really flooded with guests and now our [Indiscernible] hotels have full occupancy and then I think the first fourth floor [ph] were crowded and there were restrictions and occupancy dropped. And so the leisure side I think will be a while and then cure people who are comfortable of traveling or even government who will be encouraging that I think that's we are policy and behavior both of the issues. And so with that that I will ask whether Selina jump-in if you have anything to add. And then we have this second issue. I now have -- regarding the Urban and also Argyle's consolidation, I will Selina to address it to you, but basically, Argyle, I think that the five star luxury sector is more competitive and the earnings, we really have yet to see the significant earning or EBITDA contributions for the Argyle and so we have still trying to develop that a major presence in China and we have a good face that the team is working really hard under Kevin Zhang's leadership and it is just a very, very -- five star in terms of because that's primarily fighting new development that's slowing down, the fighting the existing in inventories. And so everybody has a pretty aggressive financial package and franchise term for the franchise for the hotel owners. Argyle and we consolidated in December and so the impact is not much there yet, because there's only a fraction of the quarter and Argyle has a lower margin and has a lower -- relative lower occupancy. And so, this is all part of our acquisition that we will continue to help to work, so can improve the brand standard in increased occupancy and increased ADR and they exactly -- Selina to address the to you. Selina?

Thank you, Alex. I'd like to draw some observations with Praveen and everybody and for the first question, if we enterprise occupancy rates in terms of the tiers breakdown, we find that in the Tier 1 cities, the occupancy rate has dropped the greatest and for the Tier 3 and our lower cities and occupancy rate is -- was more stable in the other cities. And also if we analyze occupancy rate in terms of the brand segments, we find that the middle scale segments occupancy rate remained most stable than any other brand segments. And the next one is economic economy segments and therefore, the middle type of scale and the RevPAR was the highest. So, that leads to -- and the second from the operation viewpoint, we find that most of our guests are contributed from the local guest -- from our bigger client and big clients. I mean the enterprises surrounding our hotels and the travelers that between provinces ramping up and gradually in March and the fall, so we find the percentage of the shortest guest and really [Indiscernible] guest increasing gradually. So, for second question for the contributions from Argyle and Urban, we find that Argyle and actually the net income from Argyle was negative. So, that has -- there was no contribution from the Argyle's data. And Urban we consolidated Urban's data since that December of the fourth quarter of last year, so its contribution was minor. And in the first half of 2020, in our model, the contribution of Argyle and the Urban was last -- the revenue contribution was less than 3%. And EBITDA contributes -- and we didn't anticipate the EBITDA contribution to our forecast. Thank you, Praveen.

In terms of -- Praveen, another thing that you mentioned were there out of the pipeline about 200 roughly about from the Argyle 70 -- 70 from Argyle so the pipeline will carry a longer time because sometimes that takes a year as for a hotel and a four star, five star level to mature and then about 200 from the Urban.

Yes, yes, correct Alex. Sorry, I mixed the two questions.

It's okay.

That's very helpful Alex. Thank you very much Selina. Everyone stay safe. Hope, everything is fine there. Thank you.

Yeah, please do call Selina if there is any information we have not made it clear because we want -- we really like to be very transparent for all the transactions that we made and that therefore trying to be really disciplined in terms of event -- underwriting setting up the price -- setting of the acquisition structure. Thanks Praveen and you do the same.

The next question comes from Billy Ng of Bank of America. Please go ahead.

Hi, good evening and thanks for taking my questions. I have some follow-up questions basically. I think we -- can you tell us more about your current occupancy, I mean, in terms of the distribution, how -- like when we get to 50% or 60% occupancy? Do we see some of them at very high occupancy, but some of them are still at like, let's say 10%, 20%. The reason I want to ask that as I do want to see how many of the franchisees are still loss-making at this point?

Okay, Selina, do you have the number that -- share with Billy? Billy, that's a good question. I do not know what -- I -- at least I did not know that Selina will have the number, but more than happy to share with -- if she didn't have that in front. It's not -- first of all, because I looked at the number, I didn't do -- it is really that widespread. So, there are hotels who are running very high occupancies due to the certain demand. But there are also hotels running -- we have three -- 7% of that not yet opened because the condition of the local community. And so for the -- so not every hotel is as uniformly, so there's a wide spread in terms of their performance. And there certain city that had the hit the hardest, I think that is still pretty much closed down under some provinces not yet. And they start -- seeing the business we have some hotels have running 80%, 90% occupancy already. And so -- but I think the next wave is going to be people -- we think the people's confidence is going to be correlated with our -- the measurement -- the measures the governor will take with the next stage and how comfortable they are to lift the sheltering in place for each cities and provinces. So, Selina, please add and your number here.

Thank you, Alex. Yes, indeed, this is a very good question because we observed that occupancy rate for those hotels in operation will average the distributed, that means for example, in Tier 1 cities, we observed the occupancy rate was about 43.4% and was the lowest amount holding tier cities. And in Tier 2 cities, the occupancy rate was a vast 46% that was a bit higher than that hotel Tier 1 cities. And in the Tier 3 and lower cites, the occupancy rate here was the highest and that is about 52%. So, averages speaking, we find that the occupancy rate among all the hotels was relatively stable, yes, was not -- was not impacted by only a few portion of the highest of the rate of hotels. Yeah, that is one way of doing it. And we have talked about if we analyze occupancy rates into a -- brand segment, as we found that the middle scale hotels achieve the highest occupancy rate, then the middle tab hotels and the economy hotels. And also that is the averagely distributed. Yeah. And for your correction, franchise are starting from the last -- and we are so sorry, we haven't got the very deck to an accurate number, but for all our past experience, our breakeven point for most franchises in the normal condition was about 50% to 55% of occupancy rates. So, that means by the end of the first quarter, most of our franchisees are reaching -- were reaching or had reached the breakeven point. So, that's why we have confidence in the second quarter and most of our hotels and franchisees that we are -- will make the proceeds more than has happened from the last. Thank you for the question.

I see. And can I follow-up with just in terms of the -- you mentioned Tier 3, 2 or Tier 3, Tier 4 cities outperform Tier 1 cities specifically, why is that? And also can you tell us a bit more in terms of the self-imposed quarantine demand, a lot of people, as Alex described, when they get back to work, they need to stay at a separate place for safety or healthy reasons and roughly speaking, how much of the demand is related to that and how much as we see a bit of normalized business travel demand.

That the -- okay Selina, go ahead.

All right. Thank you. Yeah, I like to share some experience on the first quarter. I think one reason was due to the guest resort, because we know the Tier 1 -- in Tier 1 cities, most of guest in the past -- most of the guests came from the long distance business travelers. But in the crisis, most of our long-term -- longest term travelers have no chance to travel anymore because of the traffic restriction given by our government to protect our safety. So, nowadays, most occupancy rates was contributing to from the shut -- customers and also some surrounding and some communities and guests. So, that's why the hotels in Tier 3 and the lower cities achieved more stable occupancy rates in hotels in the Tier 1 cities. And for your concern because there we have mentioned some of our hotels, the occupancy rate came from the workers returned back to the organization. And that's -- those bigger enterprises were distributed not only in big cities, but also distributed in some Tier 2 and Tier 3 and 4 cities. And the for some big-sized enterprises, as we know, some big sized enterprises had moved from the Tier 1 cities to tier 3 and the lower cities. So, that's why most of the work -- most of the workers returned to their work position. And that contributes to our occupancy rate in the hotels in Tier 3 and other cities. So, that we observed from the first quarter's operation viewpoint. Thank you, Alex.

Billy, the -- my -- sorry, I did not get the number, I don't have the exact number but my understanding we don't clearly in the system that marked every single room and special types of room called self-quarantine room. And so most of the -- we're right now having a new the house safety and hygiene protocols. We treated every guest coming in as a -- that the soft quarantines, so we also limited the access -- limited our contact between the front -- between the hotel employee or in our guests. So, -- and we also send -- during the period and we send the food to the room, and we clean a separate schedule. And so we've almost treated every room over there as if it has a self-quarantine. And so the majority of them are for travelers and regardless whether they are required by the government or not -- by the local businesses or not. And the secondly, I just want to emphasize Selina's point. That is the –inter provincial traveling, right now there is a major portion of the business and across provincial traveling right now is still less as you go back to work with the so-called -- I think those are proof -- from the countries -- from the factories or from the companies then your problem complex the administrator will take that -- will allow you to travel with us in the past. I think that the restrictions are lifted, but cross-provincial traveling right now still I wouldn't -- I say that slow and not totally encouraged. And hopefully the rest of the world this coronavirus crisis will be contained that will lift the concerns of the China government -- of our government that then that this travel ban or travel advisory…

If I may the next question comes from Bruce [Indiscernible] of UBS. Please go ahead.

Hi. Thanks Alex and Selina for taking my questions and hope everyone stays safe and healthy. I only have one small question. So, in terms of the speed of recovery, so in which city Tier have you seen faster improvement in business travel demand so far in April? And which hotel segment do you expect to pick up more rapidly in the future? Thank you.

So, for the -- I will address and then Selina, you add. As Selina pointed out, Bruce that we think that the Tier 3, Tier 4 cities, those recoveries should be the quickest because the interprovincial restricts, you know the travelers is pretty much I think that already started. And cross-provincial traveling is going to be at later stage and the shorter distance travel happens. Secondly, the hotels we have near the railways stations and near the hospital, near the schools and near logistic centers and those the ones that we see them coming back very quickly and will recover the quickest and there will be the leisure or any kinds of higher concentrated -- probably leisure-related hotels probably the last. Do you have anything else to add Selina?

Thank you, Alex. And thank you for question. Actually, yes, we started -- we think that hotels in the Tier 2 and Tier 3 and other cities will recover more quickly than that and other hotels in the Tier 1 cities, not only from the viewpoint of occupancy rates, but also from the ADR viewpoint because we observed that the room grade in Tier 3 cities yield a growth was minus and that means in Tier 1 cities, the decrease of ADR was the highest and the same trend as occupancy rate in Tier 1 cities. And in Tier 2 cities, the ADR and decrease of ADR was little better than that of Tier 1 cities and in Tier 3 and other cities, the room rates was nearly as the same as the last year. So, that means, nowadays, the more people are concerned about the room rate, especially for the business travelers and short distance travelers. And so that's why we think the hotels in the middle scale and in the Tier 2 and 3 cities will recover more quickly than other hotels. Thank you.

Okay. Thank you, Alex and Selina.

This concludes our question-and-answer session. I would like to turn the conference back over to Selina Yang for any closing remarks.

Thank you, operator. In closing, on behalf of the entire GreenTree management team, we thank you for your interest and participation in today's call. If you require any further information or any interesting listing in China, please don't hesitate to contact us. Thank you, everybody.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.