In an interaction with Mint, Lemon Tree’s chairperson, Patanjali G. Keswani has shared the following –
- He said that over the past 12 years, Lemon Tree has built more hotel rooms than any other hotel company in India.
- It currently operates 112 hotels, consisting of 41 owned properties with about 5,800 rooms and 71 managed hotels with around 4,500 rooms.
- It is currently developing 86 new hotels, which will add approximately 5,900 rooms to its portfolio
- To capitalise on the significant growth expected in Indians traveling abroad, Lemon Tree is eyeing alliances with the international hotel chains for co-branding or shared loyalty programmes in the next five years.
- Currently, about 26 mn Indians travel internationally. Expectation is that in the next 4-5 years, 100 mn Indians will start travelling abroad.
- Indian hotel chains with strong loyalty programmes will benefit as Indian travellers will end up using those Indian hotel brands when they travel abroad.
- There are about 10-12 cities in the world like Dubai, Singapore, Hong Kong, London, New York etc where 80% of these Indians will go. This is where a good loyalty programme will help Indian hotel companies expand successfully.
- Company plans to list its subsidiary, Fleur Hotels, within the next 24 months to pare debt.
- In September, Fleur Hotels Private Ltd was converted from a private limited company into an unlisted public company.
- About 70% of Company’s hotel rooms are in this subsidiary.
- Fleur will generate EBITDA of over Rs 700 crore per annum. (Lemon Tree’s EBITDA during TTM was Rs 557 cr)
- Fleur on listing will become debt free and have about Rs 2,000 cr of growth capital available. This will help build more hotels.
- Once delisted, Lemon Tree’s management fee from Fleur will become visible, which is about Rs 150-180 crore per annum.
- The next growth opportunity is to ‘soft brand’ the unorganised hotel room supply of under-40 room hotels, spread across tier 1-4 cities.
- A soft brand is a partnership between an independent hotel and a hotel group, providing lower costs and more flexibility to both companies than traditional franchises.
- There are 12-14 lakh such rooms in the country.
- When these rooms get formalized, and hotel companies start to brand them, there will be exponential growth in the hotel business.