Lemon Tree looks to diversify beyond hotels


Lemon Tree Hotels is looking at diversifying into vacation ownership and affordable housing to broaden revenue streams and cushion its hospitality business.

The company plans to invest about Rs 300 crore to acquire resorts in leisure destinations to aid its domestic business and the vacation ownership venture, reports The Economic Times.

The Delhi-based company backed by Dutch pension fund APG and global private equity fund Warburg Pincus is looking at rolling out its two new offerings in the next three years. “The hotel business is a cyclical business and it has very high volatility. The last five years have seen the extended bottom-of-cycle condition in India.

The only way we have grown is through supply addition by adding new hotels, while the price of each room has not grown the same way. This has hurt the industry as a whole,” Patu Keswani, chairman of Lemon Tree Hotels. Keswani said the company is evaluating the potential of vacation ownership business with RCI, a vacation exchange group.

Lemon Tree Hotels is increasing its presence in the leisure markets to aid both its foray into vacation ownership as well as its domestic hotel business. “The demand in leisure markets has grown faster than the demand in business markets,” Keswani said.


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