Lemon Tree targets over 105 hotels by FY24 end, debt reduction from fourth quarter
Patanjali Keswani, Chairman and Managing Director of Lemon Tree Hotels said once the occupancy level reaches 75%, the focus will shift to annual repricing to drive future growth.
After the launch of Aurika, Lemon Tree Hotels has reached its highest debt level, according to Patanjali Keswani, the company's Chairman and Managing Director.
Speaking with CNBC-TV18, Keswani remarked, "My expectation is that, excluding this quarter due to some remaining capital expenses for Aurika, from Q4 onwards, we will see a quarter-on-quarter reduction in debt. We have already hit what we consider the peak debt of this company."
Keswani anticipates a near 75% occupancy rate for Lemon Tree Hotels in the third quarter, excluding the newly opened Aurika Mumbai International Airport Ltd (MIAL). He explained that Aurika Bombay, being a new hotel, is likely to see occupancy above 30%. Considering it represents 13% of the inventory, this will bring the overall occupancy down to the late 60s when averaged out.
In October, Lemon Tree launched the 669-room Aurika Mumbai Skycity. The hotel located near Mumbai Airport's Terminal 2 is the the largest in the country by number of rooms.
Lemon Tree Hotels is India’s largest hotel chain in the mid-price segment, and the third largest overall, on the basis of controlling interest in owned and leased rooms. It operates in India and abroad under various brands such as Aurika Hotels & Resorts, Lemon Tree Premier, Lemon Tree Hotels, Red Fox Hotels, Keys Prima, Keys Select, and Keys Lite.
Keswani also outlined the company's pricing strategy which involves increasing prices in hotels with high occupancy. In those with lower occupancy, the focus will be on building up the occupancy first. The company is aiming for annual repricing across all properties within the next two years
Lemon Tree Hotels closed the second quarter at 8,760 rooms with 95 hotels and Keswani expects to close the year with over 100-105 operational hotels, and over 10,000 rooms.
Shares of Lemon Tree Hotels closed 1.21% lower on Monday, November 13, at ₹114.25 apiece on the NSE. The scrip has risen 27% over the last six months.
(Edited by : Shweta Mungre)
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