homebusiness Newscompanies NewsThis New Delhi based hotel chain aims to double capacity in four years
This New Delhi-based hotel chain aims to double capacity in four years
Shares of Lemon Tree have doubled this year and are trading near a record high.
Lemon Tree Hotels Ltd. plans on having 21,000 - 22,000 rooms under its stable over the next four years, according to Chairman & Managing Director Patanjali Keswani. It aims to reach 11,000 rooms by the end of next year.
In an interaction with CNBC-TV18, Keswani said that the first and second quarters contribute nearly 40-45 percent of annual revenue. The rest comes from the second half, with a 10-15 percent rise in occupancy and room rates. Occupancy during the June quarter stood at 65.1 percent.
"The second half will be 1.2-1.4 times the total income of the first half, provided expenses remain the same," Keswani said. He is also confident that the hotel chain will add more than the 1,000 rooms for the current financial year.
Lemon Tree recently signed a license agreement for a 15-room hotel in Madhya Pradesh, which is likely to be operational by the end of next year. It has signed deals for over 200 keys over the last 2-3 months.
The June quarter also saw Lemon Tree report a net profit for the first time in over two years. The return to the black has shown in the company's stock price, which trades near record levels and has doubled so far this year.
Keswani also shed light on the under construction "Aurika" hotel in Mumbai, which, according to him, would generate annual revenue of Rs 300-350 crore and an operating profit of Rs 175-200 crore. Aurika is also likely to open by the end of next year.
"Mumbai and New York are recession resilient markets," he said, adding that the country's financial capital is the most de-risked market in the country.
Eighty-five percent of Lemon Tree's inventory is in business hotels, which according to Keswani, don't do very well during the festive periods of Dussehra and Diwali as there is increased demand for leisure hotels and not for business travel. He expects October to be a low demand for business and a very high demand for leisure hotels. "In November, it will be exactly the opposite," he said.
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