Selling in Southeast Asia: H World Group’s Expansion Dilemma

H World Group, formerly known as Huazhu Hotels Group, has evolved from an economy hotel chain in China into one of Asia’s largest hospitality groups, operating over 11,000 hotels across multiple market segments. Following its acquisition of Deutsche Hospitality and rebranding in 2022, the company has accelerated its global expansion and internationalization, targeting Southeast Asia as its next major growth frontier.

This case study examines H World Group’s strategic dilemma in the region: how to determine the optimal entry modes, site selection, and brand matrix to establish a sustainable presence in an increasingly competitive hospitality market. It explores how institutional diversity, regulatory complexity, and cultural differences across ASEAN countries influence strategic decisions. The analysis highlights H World’s reliance on asset-light models, particularly the “manachise” approach, which balances operational control with scalability, as well as its use of multi-brand differentiation to align with local consumer preferences.

The case further discusses how H World mitigates the liability of foreignness through localized partnerships and the leverage of its extensive loyalty program to attract both existing customers and regional travelers. Designed as a problem-solving case, it invites the use of Dunning’s OLI Paradigm and the PESTEL framework to analyze entry mode selection across countries, and it asks readers to assess how H World Group can combine global management capabilities with local market insight to secure a competitive foothold in Southeast Asia’s diverse hospitality landscape.