Lemon Tree Hotels Mapping Aggressive Growth
Lemon Tree Hotels Ltd recently announced the opening of its first hotel in Mumbai, the upper mid-scale brand – Lemon Tree Premier. Patanjali Keswani, Chairman and Managing Director, Lemon Tree Hotels Ltd shares with Leandra Monteiro, the hospitality chain’s capacity expansion plans.
What is the Major Shift Seen in the Indian Hospitality Sector?
The entire Indian population is going through an aspirational shift. Millennial, unlike earlier generation are not comfortable staying at relatives homes or guest houses while traveling. They prefer branded hotels but at value for money price. This shift is what is driving the hospitality industry. In keeping with high number of population under 35, hoteliers are changing their products to meet the demands of this market. Also, in terms of hotel room’s availability I believe there is a shortage of quality rooms and I would like to exploit that opportunity. Our hotels are far more informal and fun as compared to our competitors with a unique sense of quirkiness that every guest enjoys.”
What is the Lemon Tree Hotel’s Growth Strategy in the Changing Times?
We want to aggressively expand but at the same time don’t want to invest too much capital. The company plans to adopt an asset light model, taking over standalone hotel properties and focusing largely on managing hotels rather than owning the properties. Also, we own many hotels, so we are looking at is getting partners to buy 49% stakes in these hotels. This will helps us unlock capital from our existing properties.
What Are the Company’s Plans for Expansion?
Lemon Tree Hotels is India’s largest hotel chain in the mid-to-economy category. We are planning to expand to 87 hotels by 2021 from the existing network of 56 hotels across the country. The company also plans to expand the Lemon Tree Premier upper midscale network to 23 hotels from the current 12 hotels and its economy offering Red Fox to 12 hotels by 2021,
“We will be venturing into the leisure segment aggressively with more resorts. Jodhpur and Jaisalmer are our current options. Secondly, we will be setting up hotels on the major city’s outskirts, to tap the growing market of weekend getaways. Finally, in metro markets like Mumbai & NCR we would like to increase our presence and become a more dominant player.”