Lemon Tree Hotels to foray into upscale hotel segment

Lemon Tree Hotels Ltd, India’s leading hotel chain in the mid-to-economy category by number of rooms, will launch a new brand this year, diversifying into the upscale segment.

Rattan Keswani, Deputy Managing Director, Lemon Tree Hotels, said, "The New Delhi-based hospitality firm, which listed on the domestic stock exchanges last year, is planning a soft launch of the new brand by September."

The hotel chain’s first hotel from the new upscale brand will be in Udaipur, Rajasthan.

Currently, Lemon Tree Hotels, backed by private equity firm Warburg Pincus, is working on the new brand’s artwork and logo.

"Our larger piece will always be mid-scale and economy. We are not going to be in the luxury category. We will go one level above our Lemon Tree Premier," Keswani stated.

The company’s new hotel chain will be competing with brands like Indian Hotel Co Ltd’s Vivanta and Oberoi group’s Trident.

Presently, Lemon Tree is operating three brands, Lemon Tree Premier and Lemon Tree Hotels in the mid-scale category, and Red Fox in the economy segment. The hotel chain at present owns around 60% of its existing hotel properties, while the rest is managed by the company.

Keswani further added, "We would like the expansion of the new hotel chain to be more asset-light because this kind of hotel (upscale) cost a lot of money. If we invest, it would be very selective. Through this new brand, we would like to attract hotel owners who are operating in this space."