Cost effective, comfortable stays were not in abundance for Indians. The facility has arrived with names like Lemon Tree Hotels who capitalized on this demand-supply gap and offered stays at right price.
Patanjali Keswani anticipated the enormous latent demand for a right-priced upscale hotel product in India and launched Lemon Tree Hotels in 2002. Because of his successful start up experience, he also got the courage to launch Red Fox Hotels in 2006. Patanjali has a B.Tech (Electrical Engineering) from IIT Delhi and a PGDBM (MBA) from IIM Kolkata. He has had 15 years of experience with The Taj Group of Hotels.
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Patanjali (Patu) G Keswani |
Keswani was inspired by the prevalent huge white space between 5-star deluxe and guest house accommodation choices in India. Even today he feels that there is a huge shortage of hotel rooms in India. With the firm belief that he could run a refreshingly unique, upscale, yet moderately priced hotel, Keswani purchased land in Gurgaon with his savings and built the first Lemon Tree Hotel. The vision was to run a small single hotel which was nationally recognized and a trusted Indian brand in the hospitality space.
Keswani believes the mantra to success lies in executing a great strategy backed by great people and processes. As a strategic decision, in a market driven by management contracts and franchisees, Lemon Tree opted to design, build, and operate all its hotels on its own. This resulted in an efficient project construction and cost-effective operating costs, a consistent customer experience, and superior returns for their shareholders. Right from the inception, Keswani realized that a great service at a great price is their key differentiator and had adopted the strategy in their business execution. Therefore from day one, the company was focused on its people and on creating a great service and work culture. This is backed by lean, highly productive multi-skilled staffing with top quartile compensation and best-in-class induction and training programs. The company believes in the policy of training people internally to fuel this growth. Keswani says, “My employees are my primary clients who serve the ultimate guest. If my employees are happy, our guests will be happy as well and they will come back to us. In fact, Lemon Tree is the first hotel company in India to offer significant wealth creation opportunities to its employees through a broad-based employee stock option program.”
Lemon Tree is the first hotel chain in India to move to a multi-property technology solution that helps to have an integrated view of business. In addition, they have put together the best in-class training programs and performance management system. “We are continuously looking a year out in advance and putting processes in place to manage our growth,” concludes Keswani.
| Fact Sheet |
| Name of the Founder: Patanjali (Patu) G Keswani Education: PGDBM (MBA) from IIM Kolkata; B.Tech (Electrical Engineering) from IIT Delhi Company: Lemon Tree Hotels Pvt. Ltd. Year of Inception: 2002 Products/ Services: Upscale, full-service, and moderately priced business and leisure hotels Key Clients: Corporate and Leisure travelers (Domestic and Foreign) Motto: Only happy employees can result in happy customers. Vision: The Lemon Tree Hotel Company will be India’s largest and finest chain of moderately priced, upscale, full service hotels. The company designs, develops, finances, owns, and operates all its hotels under its own brand Topline: Rs 300 Cr, FY12 Bottomline: EBITDA `150 Cr, PAT `80 Cr, FY12 YoY Growth: In the 8 years since its inception, Lemon Tree Hotels has grown to 1,485 rooms, in 14 hotels across 11 cities which translates to a YoY inventory growth of 60% Investors: Patanjali (Patu) G Keswani is the principal shareholder and promoter. Warburg Pincus, the US based PE fund, is a significant stakeholder IPO: Not Public Expansion Plans: At present, there are 14 hotels and 1,500 rooms in 11 cities with 1,900 employees. By December 2012, there will be 20 hotels and 2,800 rooms with 2,900 employees across 15 major Indian cities (Delhi, Mumbai, Bengaluru, Hyderabad, Chennai, Ahmedabad, Gurgaon, Ghaziabad, Pune, Indore, Aurangabad, Chandigarh, Goa, Shimla, and Alleppey). By then, the company will own over 2% of all hotel rooms in the country. All the new hotels are currently under construction. By 2020, the company’s vision is to be present across 54 locations pan India and own more than 8,000 rooms Biggest Mistake: Not becoming an entrepreneur earlier |
| Business Milestones |
| Incorporated - 2002 Launched first Lemon Tree Hotel - 2004 First fund from Warburg Pincus and Kotak Realty - 2006 Launched 8th Lemon Tree Hotel - 2008 • Second round of fund from Shinsei Bank and Kotak Realty Fund Launched 12th hotel - 2010 • Awarded SATTE 2010, Hotelier for “Best Mid Market Developer” • Awarded the NCPEDP Shell Helen Keller Award, 2010 Opening of a 187 room upper-upscale hotel in the heart of Bengaluru at St. John’s road and 267 room upscale hotel at Hyderabad - 2011 |
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