More Additions in Branded Space will be Hallmark of New Decade
WHEN LEMON Tree Hotels opened the doors of its first hotel in 2004 with just 49 rooms, we had not estimated that in just 15 years, we would become India’s largest hotel chain in the mid-priced hotel sector, and the third largest overall, on the basis of controlling interest in owned and leased rooms!
We currently operate 8,000 rooms in 80 hotels (including Keys hotels) across 48 cities under various brands like Aurika Hotels & Resorts, Lemon Tree Premier, Lemon Tree Hotels, Red Fox Hotels, Keys Prima, Keys Select and Keys Lite. Soon, the figure will touch 108 hotels with 10,600 rooms, across 68 cities in India and abroad.
Not just Lemon Tree Hotels, I believe the hospitality industry in India will continue to grow rapidly, with more additions in the branded space due to the increasing spending power of the Indian customer. In my view, the larger growth will happen within the midscale and upper-midscale space, with the focus on Tier II and Tier III cities.
If Life Gives You Lemons, Make Lemonade!
Though we have achieved tremendous success, the upward journey hasn't always been easy. But then it never is. The key lies in turning challenges on their head and converting them into an opportunity.
Our biggest milestone has been going public in 2018, and a rapid expansion in the subsequent period with the opening of many hotels, both owned and managed, and the acquisition of Keys Hotels. This growth naturally led to challenges like the need to source and train manpower in a timely manner across geographies, build a robust leadership, and reinvent our own roles to manage this trajectory well. Financially too, it was important for a growing company like ours to estimate its cash flows and ensure that we hit the ground running in new areas and reaching profitable revenues quickly.
Impact Of Disruptors
Technology and skill development can be game-changers in the hospitality industry. Technology is a big disruptor for the expanded reach it offers – there are many more consumers accessing your brand and becoming your loyal guests. Skill development is the other disruptor, for the edge it offers a company by way of delivering excellence at a competitive price, and by building an emotional connect with consumers through friendly and genuine service.
Smart Technology Gifts Parallel Advantages
Smart technology translates to many advantages, parallelly. This includes greater customer penetration, increased customer retention through data analysis and CRM, better and easy access to services and information once the guest is residing in your hotel; opportunities to market/re-market the brand in a relevant manner to the target customer, and convert a larger percentage into users. However, one must remember that hospitality, at its core, is a people-oriented industry. Therefore, technology should be used to enhance customer experience, not replace service.
Growth Will Exceed Customer Expectations
Over the next five years, I see the Indian hospitality industry gearing up for growth. We have already seen evidence of this in the form of consolidation of demand in the dense markets, clear segmentation of hotel brands in order to target the sub-segments of consumers, and building strong brands that not only deliver what they promise but exceed customer expectations, too.
Building The Lemon Tree Brand And Customer Loyalty
Lemon Tree Hotels' vision for this new decade is about brand building and customer acquisition and retention through its sales, distribution and digital systems. The focus will be on ramping-up the impact of our loyalty program and taking our loyal customer base to a few million travellers. Our diversity and inclusion strategy is continuously evolving, as we add differently-abled employees to more roles and departments and focus on newer segments of those who are economically or socially marginalised, thereby deepening as well as widening the initiative.
Our hotel footprint and inventory growth will be largely driven through our asset light model - our managed hotels. Carnation Hotels, a subsidiary and the management arm of Lemon Tree Hotels, is currently operating a total of 28 properties, of which 27 are spread across India, and one in Dubai, our first international hotel. The three brands – Lemon Tree Premier, Lemon Tree Hotels and Red Fox Hotels – have 27 hotels under their brands, besides Sandal Suites, a specialised serviced apartments complex in Noida, which is operated by Lemon Tree Hotels.
We have also signed 27 new contracts for hotels across the country as well as in international markets like Nepal and Bhutan. We will also soon be launching managed hotels in cities like Mumbai, Rishikesh, Neelkanth, Dwarka, Goa and Bhutan. We will also be opening a second serviced apartment complex in Manesar, Gurgaon with our partners later this year.
We expect the growth trajectory to continue as we are also in talks with multiple owners and partners, in India and abroad.
