High land prices in India mean no cheap hotels

Nothing happens quickly in India.

It has now been six years and counting since Lemon Tree, a local chain of mid-market hotels with money from private equity group Warburg Pincus, started to build a hostelry in Mumbai. Acquiring land, whether from the government or from private hands, is both expensive and time-consuming.

There is no central land registry or simple mechanism to do title searches. The construction process is hampered by lengthy approvals, changing regulations, archaic zoning and weak infrastructure.

Lemon Tree now has about 3,000 rooms in India. Meanwhile, Seven Days Inn, a hotel chain in China that Warburg Pincus invested in around the same time, six years ago, has about 40,000 rooms.

Full report here Financial Times 


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