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<ul><li>India's largest budget hotel chain is looking to take its brand to more international cities.</li><li>Chairman <keyword id="6370083" type="UNKNOWN" weightage="20" keywordseo="Patanjali-Keswani">Patanjali Keswani</keyword> reveals interest in properties New York, Bangkok, and Colombo.</li><li>The properties in the new cities will be managed, not owned by, Lemon Tree Hotels.</li></ul> Lemon Tree Hotels is India's largest hotel chain targeting middle-income customers. And the company is looking to tap the international market for Indians who frequently travel abroad. Chairman and Managing Director Patanjali Keswani said that it is likely to close deals in the next six months to manage hotels in New York, Bangkok, and Sri Lanka and the talks are at different stages. "26 million Indians fly out of India every year. And this is expected to double in the next five years. These guys stay 3-5 days in the places they visit. Which is 100 million room nights. Two-thirds of them stay in 8 cities only- London, New York, Dubai, Bangkok, Singapore, Hong Kong, Colombo, and Kathmandu," Keswani said based on his findings. "Out of the 100 million room nights, 60-70 million are in these 8 cities. So, if I have loyal members why should I not have hotels in these cities? But I don’t want to put capital at risk. We said we will manage for others," he added. The company is betting <a href="https://www.businessinsider.in/business/lemon-tree-hotels-loyalty-programme-smile-is-looking-to-ape-jet-privilege-and-plans-tie-ups-with-airlines-and-retailers/articleshow/68669196.cms" data-type="tilCustomLink" target="_blank">big on its loyalty programme</a> to retain customers as well as for value creation. SEE ALSO: <a href="https://www.businessinsider.in/business/lemon-tree-hotels-patanjali-keswani-says-company-will-sell-stake/articleshow/68665953.cms" target="_blank">Lemon Tree will sell stake in all its hotels in 3 to 5 years: Chairman</a> <a href="https://www.businessinsider.in/business/lemon-tree-to-hire-a-cto-to-find-hotels-and-cut-costs/articleshow/68665032.cms" target="_blank">India's largest budget hotel chain is spending on technology instead of discounts</a>

Lemon Tree Hotels is eyeing properties in New York, Bangkok, and Colombo

<ul><li>India's largest budget hotel chain is looking to go asset light going forward.</li><li>The company will either retain a part stake or to manage the same hotels, Chairman <keyword id="6370083" type="UNKNOWN" weightage="20" keywordseo="Patanjali-Keswani">Patanjali Keswani</keyword> explained.</li><li>The stake can be sold to <keyword id="148003" type="COMPANY" weightage="20" keywordseo="pension-funds">pension funds</keyword>, insurance companies, or sovereign funds that seek assured returns.</li></ul>Lemon Tree Hotels was already the largest Indian chain in the mid-market segment when the stock listed on the Indian stock exchanges just about a year ago. In the next five years, the business may look very different what it is today, according to revelations by founder and Chairman Patanjali Keswani, in an exclusive chat with Business Insider. The goal is to unlock value. "Broader point is, in the next three to five years, I will sell every hotel I own and then, either own a part stake in it or I will sell it and lease it back for a very long period with assured returns," said Keswani, who is an alumnus of Indian Institute of Technology (Delhi) and Indian Institute of Management (Kolkata). How will the business make money? In some cases, the company will continue to own a part of the original stake. In the ones that are fully sold, the company will make money from the management of these hotels. "The new hotels, which are managed, I only charge a management fee. I, typically, get a seventh of the owner’s profit. Being asset light means seven hotels under management is the same as owning one hotel. It is a risk-free approach. We are right now very asset heavy," Keswani revealed. 
 
 <div type="ExtQuote" text="So who will buy this- people like pension funds, or insurance companies or even a sovereign fund- those guys who want a long-term assured returns." auname="Patanjali Keswani, Chairman and Managing Director, Lemon Tree Hotels"></div>





 But he is not in a hurry to sell. "The question is the right price. If I am willing to sell my hotels today, I am sure I will find a buyer but I want a certain price, which is a return on my risk for developing hotels. When you develop a hotel there are multiple risks -- there are land title issues, government approvals, financing, my equity-- and so, I want a return. Therefore, I will not sell it cheap," Keswani explained, adding that the stake sale will happen only when the business cycle turns around. And by most accounts, the <a href="https://www.businessinsider.in/business/heres-why-hotel-room-rates-in-india-may-double-in-the-next-3-to-4-years/articleshow/68664363.cms" data-type="tilCustomLink" target="_blank">recovery is right around the corner</a>. SEE ALSO: <a href="https://www.businessinsider.in/business/lemon-tree-hotels-is-eyeing-properties-in-new-york-bangkok-and-colombo/articleshow/68666574.cms" target="_blank">Lemon Tree Hotels is eyeing properties in New York, Bangkok, and Colombo</a> <a href="https://www.businessinsider.in/business/lemon-tree-hotels-loyalty-programme-smile-is-looking-to-ape-jet-privilege-and-plans-tie-ups-with-airlines-and-retailers/articleshow/68669196.cms" data-type="tilCustomLink" target="_blank">Lemon Tree Hotels' loyalty programme may open doors to new partnerships</a>

Lemon Tree will sell stake in all its hotels in 3 to 5 years: Chairman

<ul><li>Indian hotels have had a long down cycle and it is now turning around, says <keyword id="6370083" type="UNKNOWN" weightage="20" keywordseo="Patanjali-Keswani">Patanjali Keswani</keyword>, founder of Lemon Tree Hotels.</li><li>Demand is growing faster than supply of new hotel rooms after a decade, according to analysts.</li><li>The changing dynamic in demand and supply may lead to a spike in hotel room rates.</li></ul> The wave is turning for India's hoteliers after a decade of anguish. The number of travellers seeking accommodation is growing faster than the rise in new hotel rooms for the first time since the global financial crisis struck a lethal blow. And Patanjali Keswani, the founder and chairman of Lemon Tree Hotels, believes the turnaround may be so strong that hotel rooms rates may double in the next three years. "My expectation is from October this year, for the next two years -- because it takes about five years for new supply to come in-- prices will keep going up. Then,the returns (on capital) will improve and new guys will plan their supply because then it will be a business worth investing in. But it will take a few years for that supply to come in. I guess, just like how it was the longest bottom-up cycle for hotels in India -- from 2009 to 2017-18 -- it will be a long top-up cycle because people who invested in hotels in India in the last 10 years have been so badly burnt, you will need a very brave guy to take a counter view. So my guess is, if you ask me what the room rates will be three to four years out, I will say it may be double of what they are today," Keswani said in an interview with Business Insider. Industry watchers agree with Keswani. Demand is expected to grow at a compounded annual rate of 6% until financial year 2022, that's one and a half times the 4% growth expected in new hotel rooms, according to advisors at Nirmal Bang Institutional Equities. Even now, average <keyword id="7487693" type="UNKNOWN" weightage="20" keywordseo="hotel-room-rates-in-india">hotel room rates in India</keyword> are still 30% below what they were at the end of March 2008, according to Axis Capital, which also sees definite signs of a turnaoround. Hotels raise prices when the occupancy rates cross 70% and the industry-wide rate last year was already at 68%, Keswani explained. Lemon Tree Hotels has an average occupancy of close to 80%, according to Keswani. The company has already hiked prices twice in the last two years. "In October 2017, we got a 13% price hike (in average room rate) and in October 2018 we got a 8.5% on a higher base. We are expecting similar, if not higher, price hike going forward because now, there is clearly a shortage of supply," he added. 
 
 
 
 
 
 
 
 
 
 
 
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 What will drive the demand? Aside from the slowdown in addition of new hotel rooms, Keswani projects a sharp spike in demand triggered by economic growth. "There are 3 parts of India. Half of India is earning less than $500 per capita- these are people who consume roti (bread), kapda (clothes), makaan (shelter), and mobile. Next 40% of India's population earns upto $2000 per capita. These are people who consume healthcare and education, which are non-discretionary to them, and some minor discretionary items- could be entertainment, leisure and a little bit of retail. The last 10% of India is upto $7000 per capita. This is the real consuming population of India, about 30 million households," Keswani explains, adding that when the economy grows there will be an exponential growth in the consuming population. According to him, if the per capita income grows 50% in the next seven years, the size of the big consuming segment will be thrice its current size. And that is the boom that the hoteliers like Keswani are waiting for. SEE ALSO: <a href="https://www.businessinsider.in/business/lemon-tree-hotels-patanjali-keswani-says-company-will-sell-stake/articleshow/68665953.cms" data-type="tilCustomLink" target="_blank">Lemon Tree will sell stake in all its hotels in 3 to 5 years: Chairman</a> <a href="https://www.businessinsider.in/business/lemon-tree-hotels-is-eyeing-properties-in-new-york-bangkok-and-colombo/articleshow/68666574.cms" data-type="tilCustomLink" target="_blank">Lemon Tree Hotels is eyeing properties in New York, Bangkok, and Colombo</a>

Here's why hotel room rates  in India may double in the next 3 to 4 years

<keyword id="136437" type="COMPANY" weightage="20" keywordseo="Lemon-Tree-Hotels">Lemon Tree Hotels</keyword> is India's largest chain of budget hotels, valued at a little less than a billion dollars, in an industry that is yet to fully recover from the lethal blow of the global financial crisis of 2008. However, the company's chairman and managing director, <keyword id="6370083" type="UNKNOWN" weightage="20" keywordseo="Patanjali-Keswani">Patanjali Keswani</keyword>, is confident that a turnaround is just around the corner, and is invested accordingly. “By 2025, I will be in 143 cities in India. It is a specific number. Right now, I am in 31, with Keys I will hit 44. With all the other hotels I am putting, I will be in 66 cities. I need to do a little more than double in the next six years,” Keswani told Business Insider, adding that the company would have about 10,000 rooms commissioned by the end of March 2020 and “it will time nicely with the turning of the cycle.” <div type="javascript" title="Custom" contenttype="Video"><cdata><![CDATA[
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 Here are the five big takeaways from the exclusive chat with Keswani. <div type="Slideshow" msid="68680694" hostid="261" title="Business Insider Stack: All you need to know about the future plans of Lemon Tree Hotels" firstImageMsid="68680695" slideCount="5"></div>

Business Insider Stack: All you need to know about the future plans of Lemon Tree Hotels

<ul><li>Lemon Tree Hotels is putting together a unit that will be led by a chief technology officer.</li><li>The investment into technology will have three strategic goals, according to CEO <keyword id="6370083" type="UNKNOWN" weightage="20" keywordseo="Patanjali-Keswani">Patanjali Keswani</keyword>.</li><li>The company is looking to identify struggling hotels in buzzing locations.</li></ul>Average <keyword id="7487693" type="UNKNOWN" weightage="20" keywordseo="hotel-room-rates-in-india">hotel room rates in India</keyword> are still 30% below what they were at the end of March 2008, according to Axis Capital. While waiting for an imminent turnaround in the industry, Patanjali Keswani, the founder and chairman of Lemon Tree Hotels is putting together a technology team that will be led by Chief Technology Officer (CTO). While the CTO is yet to be hired, the goals have been defined. "Technology will not be a support function, but it will be a strategic function and we will share it with Hamstede," Keswani told Business Insider. Hamstede Living, is a joint venture between Lemon Tree Hotels and global private equity major Warburg Pincus, that will offer co-living spaces for young, urban professionals and housing for migrant students in Indian cities. Lemon Tree Hotels will have a 30% stake in Hamstede. There are three ways in which Keswani aims to use technology to boost his hotel business but this will not include internet of things (IOT). "You don’t need your phone to open your curtains. The mid-market customer does not want it," he said adding that,"I don’t agree with what a lot of these international guys are doing where they are spending a lot of money on what I currently feel are doubtful return on investments. You can have your cell phone doing everything in the room, but as a consumer myself that’s not a real delight. It’s going to cost me Rs 10 lakhs a room, but I am customers are not going to pay me even Rs 2 lakhs a year." 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 So what is it that Lemon Tree Hotels wants from its CTO. Find struggling hotels in hotspots The company has developed an algorithm that will analyse and project traffic in key locations using a combination of data on airline traffic, average room rates, and other such data points that may be a proxy to predict demand for hotel rooms. The next step is to identify under-performing hotels within a market. "We may not go build a hotel there. But if someone has 55% occupancy in an area where the others have 80% occupancy, then, we move to human side. We can talk to the owner to either lease the hotel or let us manage it for a fee. We think, with our customer base and reach, we can improve your performance at cost and revenue level," he said. At the end of December 2018, over 30% of Lemon Tree Hotels' rooms were owned by others but managed by the chain in exchange for a fee, according to research by HDFC Securities. Enhance the loyalty programme A three-year old loyalty programme has played a big part in helping Lemon Tree Hotels retain customers. "I was astonished in the last five hotels we have taken under management, in three months, 20% of the hotels’ inventory has come from the loyalty programme. It’s an amazing number. Typically, hotels cash break-even (without accounting for interest cost) at 25% occupancy. If you include interest cost, the break-even point is at 40-45% occupancy. If in 3 months, I get 20% (from loyalty programme) which means you are at cash break even in 3 months, that too in a bad year. So, going forward, why would I not leverage this? We are going to invest more capital in our mobile site, in loyalty, and in technology," Keswani explained. Productivity and cost control How can technology help hotels save cosrs? "I have a call centre with 150 people who get thousands of calls everyday from customers. 80% of those queries are very, very repetitive and predictable. Therefore, I can put chatbots and reduce the headcount or improve the productivity," Keswani said. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 The other leg of the cost control was to implement a management information system (MIS). "We have ensured all our platforms talk to each other through a middleware. How do I get real-time data to control costs, to manage multiple aspects more efficiently? The MIS will help us respond faster," he added. SEE ALSO: <a href="https://www.businessinsider.in/business/heres-why-hotel-room-rates-in-india-may-double-in-the-next-3-to-4-years/articleshow/68664363.cms" data-type="tilCustomLink" target="_blank">Here's why hotel room rates in India may double in the next 3 to 4 years</a>

India's largest budget hotel chain is spending on technology instead of discounts

<ul><li>Chairman Patanjali Keswani reveals plans to tie up with airlines and retailers in the future</li><li>The mid-market hotelier is looking to leverage the strength of its loyalty programme</li><li>The three-year old loyalty programme already has a million members, according to the company.</li></ul> <keyword id="136437" type="COMPANY" weightage="20" keywordseo="Lemon-Tree-Hotels">Lemon Tree Hotels</keyword>' Chairman and Managing Director Patanjali Keswani is looking to unlock value and the three-year old loyalty programme may be the ace up his sleeve. In an exclusive interview with Business Insider, Keswani revealed his future plans. "I can tie up with related companies like an airline and a retailer, and the members of my loyalty programme can redeem points in any of the three purchase points," he said. The boost to valuation Aside from opening doors to new partnerships, the loyalty programme may also offer a valuation boost. The now beleaguered Jet Airways' loyalty programme, Jet Privilege, had 8 million member, according to the annual report of 2017-18. However, even before that in 2017, the programme was valued at over a billion dollars. Lemon Tree Hotels currently has a million 'loyal' customers, but the company's market capitalisation is a little less than a billion dollars. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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 Keswani is confident that the pace of member addition will only increase in the days to come. "In three years, I have data on a million customers, and am adding half a million customers or more every year. As I open more and more hotels, more and more people will join. Since I am tripling in size in the next 3-4 years, I will start adding 150,000 (loyalty programme) members a month. I will also hit 8-10 million (loyalty members) in the next 5 years," he said. SEE ALSO: <a href="https://www.businessinsider.in/business/lemon-tree-hotels-patanjali-keswani-says-company-will-sell-stake/articleshow/68665953.cms" data-type="tilCustomLink" target="_blank">Lemon Tree will sell stake in all its hotels in 3 to 5 years: Chairman</a> <a href="https://www.businessinsider.in/business/lemon-tree-to-hire-a-cto-to-find-hotels-and-cut-costs/articleshow/68665032.cms" data-type="tilCustomLink" target="_blank">India's largest budget hotel chain is spending on technology instead of discounts</a>

Lemon Tree Hotels' loyalty programme may open doors to new partnerships

New Delhi, April 12 () The lockdown to contain spread of COVID-19 in the country has had disastrous impact on the hospitality sector, especially for hotels, hoteliers said. "The impact is disastrous. The hotels are businesses which are very capital intensive and also have very high fixed costs," Lemon Tree Hotels Chairman and MD Patanjali G Keswani told . The capital intensive component is normally debt and it has to be serviced by payment of interest on debt and repayment of debt. Hotels are also labour intensive, so they have lots of fixed costs such as wage bill, besides paying government levies, minimum load charges, among others, he added. "Earlier Indian hospitality industry was on average witnessing 65 per cent to 70 per cent or full occupancy till end of the February. First few days of the March were fine, once the things started accelerating, the occupancy has gone down to minimum," Keswani said. Going ahead, occupancy in India is going to be very low. So hotels will have to either shutdown or run in a very limited manner, he added. The government has also requested industries to not lay off staff and cut salary, where in liquidity is a problem, Keswani said. Under this situation, the industry is going to go sick very fast unless you have the external source of capital, like holding company. "The govt took a good first step to announce the moratorium on interest and principle repayment for three months. But the problem is the period is too short. One can not plan on the basis of three months. "Ideally government should have done a 12-month moratorium and said the amount you are not paying in these 12 months shall be added in the debt," Keswani said. The industry is not looking for a dole but is asking for minimum support to survive by pushing back repayment of instalments, some support for paying salaries and waiver in government levies, he added. In similar vein, Cygnett Hotels and Resorts founder &amp; MD Sarbendra Sarkar said, "The lockdown has adversely affected the hospitality industry...We are experiencing a big drop in new reservations, and increase in cancellations, etc." While RBI's three-month moratorium has come as a relief, the industry hopes that the government will soon offer schemes that will enable the sector, he said. In the meantime, Cygnett is reviewing its progress so far and seeks to make necessary changes and strategise for the post-COVID 19 period during this time, he added. Stating that COVID-19 has severely impacted the industry, Bird Group ED Ankur Bhatia said, "With occupancy crashing to a below 5 per cent against 95 per cent last year due to the unfortunate impact of COVID-19 mayhem, the tourism industry was in the front line and is the worst hit. No wonder a slew of hotels will fold up under pressure." The Associations have put forward multiple proposals to stay alive as well to ensure the employees are taken care of and retained, he added. "We welcome government's move to offer moratorium for three months on loans. The moratorium on capital and interest repayments of loans taken by the registered businesses would help for now as some of the payments were due end of March," Bhatia said. Amatra Hotels and Resorts co-founder and COO Anurag Dua said hospitality and travel sectors have been amongst the worst affected segments, with the businesses coming to a standstill as governments across the world locked down their countries to stop the spread of the coronavirus. "The moratorium of three months would provide the much-needed relief for the hospitality sector in India provided banks/NBFCs approve it unanimously with no condition precedent following the RBI move," he added. However, businesses working on rental models with private owners have not received any benefit which might act as a deterrent to operators at large, Dua said. "We expect the situation to improve once cases of COVID-19 slows and believe that the domestic tourism industry shall grow at a better rate," he added. AKT RVK

Lockdown has had disastrous impact on hospitality sector; govt support needed: Industry

<ul><li>The hotel chain posted a 80% fall in profits and posted a consolidated net loss of ₹19 crore in the last quarter of FY20.</li><li><keyword id="74790" type="PERSON" weightage="20" keywordseo="Lemon-Tree">Lemon Tree</keyword> expects its numbers to bounce back to normal only when a cure is found. The company said that it expects the May numbers to continue until September at least.</li><li>Given the situation, the hotel chain is hoping to raise ₹150 crore through a rights issue. </li></ul><keyword id="136437" type="COMPANY" weightage="20" keywordseo="Lemon-Tree-Hotels">Lemon Tree Hotels</keyword> poor quarterly results saw its shares jump by 5% as the market opened on Tuesday (June 2). The hotel chain posted a huge fall in profits but the board also approved a fundraising plan for ₹150 crore. The government’s decision to allow hotels to operate from June 8, also brought in some cheer in the market. <div type="javascript" title="Custom" contenttype="Image"><cdata><![CDATA[<div class="flourish-embed flourish-chart" data-src="visualisation/2672002" data-url="https://flo.uri.sh/visualisation/2672002/embed"></div>]]></cdata></div> The hotel chain posted a 80% fall in profits and posted a consolidated net loss of ₹19 crore in the last quarter of FY20, a big fall from the ₹33.6 crore profit in the same quarter the previous year. For FY20, its net losses stood at ₹21.6 crore. However, Lemon Tree expects its numbers to bounce back to normal only when a cure is found. The company said that it expects the May numbers to continue until September at least. Given the situation, the hotel chain is hoping to raise ₹150 crore through a rights issue. Due to the coronavirus pandemic, Lemon Tree hotels had to shut their doors from the beginning of the lockdown on March 25, even before that the fear of the virus had kept customers away. “The growing concerns around the spread of Covid-19 followed by the nation-wide lockdown announced by the central government impacted the operating environment for hotels significantly,” said Patanjali Keswani, Chairman &amp; Managing Director – Lemon Tree Hotels. The company also said that its revenue from operations were down by 76% in April 2020 on a year-on-year basis, whereas the expected numbers from May are set to be down by 70%. While the company has said it would not layoff permanent employees, it has announced a freeze in hiring as well paycuts across the management. “All discretionary spends like advertising, leased cars, etc.are paused. There will be a careful monitoring of all costs undertaken to achieve breakeven at Net EBITDA level in Q1 FY21,” said the company. SEE ALSO: <a href="https://www.businessinsider.in/careers/news/barclays-morgan-stanley-jll-and-others-hiring-senior-executives-during-the-coronavirus-lockdown/articleshow/76147578.cms">Barclays, Morgan Stanley, JLL and others hiring senior executives during the coronavirus lockdown</a>

Lemon Tree Hotels share price jumps by 5% as it looks to raise funds after 80% fall in profit

<ul><li>China's push for rental housing startups ended up pushing local rentals through the roof, according to a Wharton University report. </li><li>OYO, <keyword id="2766908" type="PERSON" weightage="20" keywordseo="Nestaway">Nestaway</keyword>, <keyword id="3844186" type="PERSON" weightage="20" keywordseo="CoHo">CoHo</keyword> and <keyword id="136437" type="COMPANY" weightage="20" keywordseo="Lemon-Tree-Hotels">Lemon Tree Hotels</keyword> are working on similar models in India. </li><li>The report recommends mortgage trusts as a solution to keep rents under check and still allow co-living to be a viable business model.</li></ul>India's largest budget hotel chain is ready to kick off it's new venture, Hamstede, where private equity major Warburg Pincus will be a majority shareholder. "The board (of Lemon Tree Hotels) has approved an initial investment of $5 million," Chairman and Managing Director Patanjali Keswani told Business Insider. The company will have a 30% stake in Hamstede. And it's not the only one. A whole host of startups like OYO, CoHo, and Nestaway are growing fast. Consulting firm PwC has pegged the market for urban residential housing at $13.5 billion. Delhi-based CoHo had estimated the <a href="https://yourstory.com/2016/05/coho/" data-type="tilCustomLink" target="_blank">co-living market in India at $10 billion</a> in 2016. The model that Hamstede is built on is derived from the successes of three Chinese companies offering co-living spaces Mofang, Nova, and Zirooms, and another startup based in Hong Kong Weave. Warburg Pincus is an investor all these companies and all these firms played a part in the rental housing boom in China in recent years. The Chinese experience with co-living has an ominous sign for Indian tenants. President Xi Jinping pushed for the rental housing boom <a href="https://www.reuters.com/article/us-china-economy-houseprices-rent-analys/how-chinas-plan-to-develop-rental-housing-backfired-idUSKCN1LU0JA" data-type="tilCustomLink">but it backfired</a>. Despite the increased supply of homes, rents in China’s major cities soared in the double-digits. While the companies' valuations spiked, accommodation became unaffordable for many students and young professionals. In some cities, rents increased by as much as 30% between 2017 and 2018, according to <a href="http://d1c25a6gwz7q5e.cloudfront.net/reports/2019-03-08-E-House-Poly-FINAL.pdf" data-type="tilCustomLink" target="_blank">a study by Wharton University</a> released in March 2019. How co-living business works "Today if you live in Mumbai, and you work in Lower Parel, you cannot afford an apartment there. Your apartment will be in Borivali and travelling two hours one way everyday. I will put up a co-living space very close to Lower Parel but the trade-off is I will give you a far more compact living area, where you spend the night. The common area will be very social, where youngsters can hang in the evening, with a living room and an open kitchen and so on," Lemon Tree Hotels' Chairman Patanjali Keswani said explaining the model to Business Insider. However, in China, the rush build capacity home-owners borrowed heavily and companies bid generously for land parcels. The excess cost was passed on to the tenants, the Wharton study showed-- an important lesson as Indian startups chase the same opportunity. Big money is chasing these new co-living ventures. Not just Warburg Pincus, Tiger Global, and Singapore sovereign wealth fund GIC are all invested in the idea in different countries. As India opens up to co-living, tenants will be looking for affordability, particularly in big cities like Mumbai where rents are already beyond many people's reach. The solution The Wharton study recommends securitisation as a possible solution to keep both the rents and the financial pressure on companies low. Companies can raise money against the rents receivable and distribute the income as as dividends to shareholders. In formal terms, this will be a real estate investment trust. Both Mofang and Zirooms have raised money using this route in China, but retail investors are not allowed to invest in these securities yet, according to the report. If the experiment helps in cooling the Chinese property market, both owned and rental, this can become a new avenue for financing high-cost co-living projects without adding burden on the tenants. An idea Indian companies can borrow too. SEE ALSO: <a href="https://www.businessinsider.in/from-pgs-to-co-living-spaces-how-student-accommodation-is-changing-in-india/articleshow/65201577.cms" data-type="tilCustomLink" target="_blank">From PGs to co-living spaces: How student accommodation is changing in India</a>

China's experience with co-living should be a warning for tenants as well as companies in India

<ul><li>Knight Frank's latest report pegs the shortage of beds among university students in India at 8 million.</li><li>The report has also estimated that the shortage can rise to 13 million by 2025.</li><li>Lemon Tree Hotels which is investing in student housing under the Hamstede brand expects the new business to eventually help its hotels too.</li></ul>There are 34 million students in Indian universities and the available accommodation for them is nowhere close to necessary. "The purpose built student accommodation (PBSA) market in India is in its infancy, despite the country boasting one of the largest populations of undergraduate students in the world," Knight Frank said in its 'Global Student Property 2019' report. The net shortage right now is around 8 million right now and can rise to 13 million by 2025. And these are just in the big cities. Private property owners and hostels meet some of the demand but quite often, they do not meet the students' expected standards. In many places, landlords are reluctant to lease their homes to a student or a group of students due to fears of their own. Wherever there is unmet demand, there is an opportunity to make money. Investors have poured in about $100 million in the space so far but that's not enough either. About $1oo million have already been invested in creating spaces for migrant students but there is space for a lot more. How the investors view the opportunity "The market is 10 million students, who are not in the campus but are migrants, who are staying various types of paying guest type of accommodations," Patanjali Keswani of Lemon Tree Hotels told Business Insider earlier this year. Lemon Tree Hotels is the country's biggest chain of budget hotels, which is also expanding into other spaces like co-living and student housing under a different banner called Hamstede. Global private equity major <keyword id="6402698" type="UNKNOWN" weightage="20" keywordseo="warburg-pincus">Warburg Pincus</keyword> is an investor along with Lemon Tree Hotels in Hamstede-- which will be an associate company for Lemon Tree Hotels. However, Co-living and student housing will be sold under different brands. The board of Lemon Tree has approved an initial investment of $5 million (₹35 crores) in the joint venture. Including the share of Warburg Pincus and the debt Hamstede can raise over the equity, there will be a total investment of $50 million by the end of 2019. "To me this is exciting because these students are future mid-market, aspirational customers," Keswani added highlighting the potential for his mainstay hotel business. "The forecast is highly promising and is likely to offer investment opportunities in this alternate asset class for domestic and international investors” Knight Frank India CMD Shishir Baijal <a href="https://economictimes.indiatimes.com/industry/services/property-/-cstruction/student-housing-gets-investment-worth-usd-100-mn-in-2018-potential-to-attract-usd-50-bn-report/articleshow/69689476.cms" data-type="tilCustomLink" target="_blank">reportedly</a> said. SEE ALSO: <a href="https://www.businessinsider.in/business-insider-stack-all-you-need-to-know-about-the-future-plans-of-lemon-tree-hotels/articleshow/68680640.cms" data-type="tilCustomLink" target="_blank">SLIDESHOW: All you need to know about the future plans of Lemon Tree Hotels</a>

Indian students are short of 8 million beds-- and there's a lot of money to be made

<ul><li><keyword id="9771276" type="UNKNOWN" weightage="20" keywordseo="revenge-travel">Revenge Travel</keyword> – the term gained popularity in China, after people having been stuck in a lockdown started travelling domestically just to get out of their homes.</li><li>Experts believe a similar recovery is on the cards for Indian hospitality sector. And that is good for the smaller hotels more than the luxurious ones.</li><li>But that won’t be enough as occupancy levels won’t return to pre-COVID levels until 2022.</li></ul>From fancy hotels like Taj and Oberoi to budget chains like OYO and Lemon Tree, everyone in Indian hospitality has been waiting for 'Revenge Travel'. The term gained popularity in <a href="https://www.scmp.com/business/companies/article/3080361/chinas-airlines-are-poised-bout-revenge-travelling-bookings">China</a>, after people having been stuck in a lockdown, started travelling within the country, just to get out of their homes. This travel recovery in China, is what experts believe will also be seen in India. And it is more likely to benefit smaller hotels more than the luxurious ones. And it seems that such hopes have sparked buying in Indian hotels shares in the last week. <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Hotel </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">% change since August 7 </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lemon Tree </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">+21% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">EIH </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">+13.8% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Chalet </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">+7.8% </td></tr></tbody></table> Revenge Travel is a temporary phenomenon The Indian <keyword id="68179" type="PERSON" weightage="20" keywordseo="Hospitality-industry">hospitality industry</keyword> has been one of the worst hit during the <keyword id="8829783" type="UNKNOWN" weightage="20" keywordseo="coronavirus-pandemic">coronavirus pandemic</keyword>. With travel having come to a full stop due to the spread of the virus, the travel and tourism industry is looking at a slow recovery – until a vaccine is out and readily available for all. So far, India’s experts have been relying on what DLF CEO Rajeev Talwar called ‘aas paas’ tourism, during a live chat with Business Insider. He was referring to what the likes of <a href="https://www.businessinsider.in/business/news/oyo-mahindra-holidays-emirates-and-boeing-agree-people-wont-fly-for-a-while/articleshow/75731204.cms">OYO, Mahindra</a> are betting on – rising hotel bookings on drive-to destinations instead of vacation spots that need you to take a flight. <div type="Youtube" id="lWgGN76PLJM" title="Episode 5 | All You Need To Win In The Post Covid World: The Corner Office View" thumbUrl="https://i.ytimg.com/vi/lWgGN76PLJM/mqdefault.jpg"></div> Revenge travel takes off A <a href="https://www.mckinsey.com/industries/travel-logistics-and-transport-infrastructure/our-insights/the-way-back-what-the-world-can-learn-from-chinas-travel-restart-after-covid-19">Mckinsey</a> report puts it simply as the end of lockdown would mean the first thing people would want to do is eat out, and the second thing is travel. According to a report by the US-based HVS Global Hospitality Services and Indian real estate research firm ANAROCK, said that while corporate travel and travel for Meetings, incentives, conferences and exhibitions will reduce, domestic travel could take off soon. “Domestic tourists will be major demand drivers. ‘Revenge’ travel witnessed in China could foster among Indians too,” said the report. And the upcoming festive season could be the perfect time for ‘revenge travel’. According to a report by RateGain, India is currently the worst in hotel recovery in a survey of 15 countries and over 2.5 lakh hotels. But the future looks promising as the report said that India ranks third in the list of future bookings during November-December, falling behind only Thailand and UAE. But it won’t be enough Even with domestic tourism seeing green shoots, it won’t be enough for the Indian hotel industry. While hoteliers are ready for a slow recovery, the report by HVS and ANAROCK says it may take years for the hospitality industry to get back to pre-COVID levels. While occupancy levels will return to normal by 2022, the ADR (average daily rate) will return to normal only by 2023. “Occupancy and ADR will recover much quicker in this cycle due to limited supply growth subject to vaccine being in place not later than 2021,” said the report. India’s listed hotels – Lemon Tree, EIH (which operates Oberoi and Trident chain of hotels), Chalet, have all reported dismal numbers for the first quarter of FY21, with the hotels having reopened in June. Patanjali Keswani, Chairman &amp; Managing Director, Lemon Tree let out a word of caution even said that while he is hopeful for a gradual recovery in the second half of the year, he is still shoring up cash for the next one year, "assuming the worst-case scenario." And the news is worse for luxury hotels, which have over 50% of revenue coming from international business or foreign tourists visiting India , as experts at ANAROCK and HVS say that these hotels fall in the ‘more vulnerable’ section while branded budget and mid-market hotels will lead the path to recovery. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/these-are-the-two-indian-companies-to-feature-in-cb-insights-150-most-promising-digital-health-startups/articleshow/77583700.cms">These are the two Indian companies to feature in CB Insights 150 most promising digital health startups</a>

‘Revenge travel’ is the only way Indian hotels can make money – but it will take over two years to even match pre-COVID levels

<ul><li>India’s hotel industry is headed for a slow recovery from the coronavirus pandemic, it is also poised to be a major contributor to <keyword id="977682" type="PERSON" weightage="20" keywordseo="online-travel">online travel</keyword>’s doubling growth over the next five years. </li><li>A Goldman Sachs report pegs hotels to be the fastest growing segment within the sector with a CAGR (compounded annual growth rate) of 20%.</li><li>Even with the hopeful outlook, hoteliers will have to be patient as the recovery is expected to be slow in the near-term.</li></ul>The battered Indian hospitality industry can make room for growth over the next five years, if they survive the low phase during the pandemic and the key to survival is a robust digital strategy. India’s millions of hotel rooms will have to opt for a digital transformation. Even though the situation looks bleak, Goldman Sachs believes that ‘all hope is not lost’ for hotels in the online space. The report dated July 2020 says that the online travel industry in India is expected to double in the next five years. <div type="image" title="travel." msid="77670730" hostid="261"></div> And hotels will be the fastest-growing segment within the sector with a CAGR (compounded annual growth rate) of 20%. “We estimate hotels alone will contribute c.47% of the online travel revenue pool in India by FY25 (36% in FY20), making it the key battleground within the space,” said the report. Adapting technology and joining branded hotel chains will be key to survival India’s current online penetration is one of the lowest in the world at just 22%, according to the report. Out of the 2 million rooms accounted for hotel rooms in India, only over 140,000 are affiliated with hotel chains. Long-term growth will be driven by budget hotels falling under the unorganized category, who are deeper in the Indian market and can be brought online, believe analysts at Goldman Sachs. “These last few months have proved that branded hotels are and will continue to be the safest environment even in the worst pandemic. Along with safety, hotel brands that figure out how to offer meaningful experiences will lead the way,” said Ankur Gupta, Managing Partner &amp; Head of India Real Estate, Brookfield Asset Management in a report by JLL. All hope is not lost While hotel chains like <keyword id="74790" type="PERSON" weightage="20" keywordseo="Lemon-Tree">Lemon Tree</keyword>, Indian Hotels Company, which is a subsidiary of Tata Group, EIH which runs Oberoi and Trident, and hospitality unicorn <keyword id="2808667" type="PERSON" weightage="20" keywordseo="OYO">OYO</keyword> are all set to benefit from it, the biggest beneficiary could be <keyword id="54613" type="COMPANY" weightage="20" keywordseo="makemytrip">MakeMyTrip</keyword> which currently accounts for 50% of the online hotel aggregator market. For the first three months of the year, MakeMyTrip had reported a 15.9% fall in adjusted revenue to $137.2 million. The NASDAQ-listed company also posted an adjusted operating loss of $10.3 million. MakeMyTrip, which is set to announce its earnings results today, had said during the last earnings call that the current quarter might see its losses ballooning to over $20 billion, but over the next few quarters they will bring down the loss to the $10 million range before targeting breakeven. Recovery will be slow The Hotels Association of India recently requested the <a href="http://bwhotelier.businessworld.in/article/Indian-Hotel-Sector-will-collapse-if-not-supported-by-the-Govt-and-RBI-HAI/28-07-2020-302439/">government</a> to step in to help the sector citing losses to the tune of ₹90,000 crore this year. With hotels being shut for over three months and now opening gradually across the country, the listed hoteliers have all gone to report massive losses for the first quarter of the financial year. Patanjali Keswani, Chairman &amp; Managing Director, Lemon Tree let out a word of caution even said that while he is hopeful for a gradual recovery in the second half of the year, he is still shoring up cash for the next one year, "assuming the worst-case scenario." MakeMyTrip has liquidity of nearly $168 million as of 31st March which will help them survive for two years. But despite the weak beginning to the financial year, the Unlock India phases and the gradual opening of hotels, most recently in <a href="https://www.businessinsider.in/india/news/delhi-allows-re-opening-of-hotels-and-weekly-markets-gyms-to-remain-closed/articleshow/77634741.cms">Delhi</a>, has revived the hopes and the optimism reflects in share price of the listed hoteliers this month. . <table style="border-width: initial; border-style: none; width: 468pt; table-layout: fixed;"></colgroup><tbody><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Hotel Chain </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Stock action in Aug so far </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Lemon Tree </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">+35% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Chalet Hotels </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">+17.9% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">EIH </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">+35.7% </td></tr><tr><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">Indian Hotels Company </td><td style="border-left:solid #000000 1pt;border-right:solid #000000 1pt;border-bottom:solid #000000 1pt;border-top:solid #000000 1pt;vertical-align:top;padding:5pt 5pt 5pt 5pt;overflow:hidden;overflow-wrap:break-word;">24.8% </td></tr></tbody></table> Revenge travel will help the battered industry recover <a href="https://www.businessinsider.in/business/news/revenge-travel-is-the-only-way-indian-hotels-can-make-money-but-it-will-take-over-two-years-to-even-match-pre-covid-levels/articleshow/77586911.cms">Revenge travel </a>will help the hotel industry recover. The term gained popularity in <a href="https://www.scmp.com/business/companies/article/3080361/chinas-airlines-are-poised-bout-revenge-travelling-bookings">China</a>, after people having been stuck in a lockdown, started travelling within the country, to be able to just to get out of their homes. A <a href="https://www.mckinsey.com/industries/travel-logistics-and-transport-infrastructure/our-insights/the-way-back-what-the-world-can-learn-from-chinas-travel-restart-after-covid-19">Mckinsey</a> report says that the end of lockdown would mean the first thing people would want to do is eat out, and the second thing is travel. SEE ALSO: <a href="https://www.businessinsider.in/business/startups/news/ola-is-staring-at-an-internal-crisis-with-seven-cxo-level-exits-in-eight-months/articleshow/77670080.cms">Ola is staring at an internal crisis with seven CXO level exits in eight months</a> <a href="https://www.businessinsider.in/tech/apps/news/google-eyes-indias-sharechat-as-microsoft-goes-after-tiktok-in-the-us-heres-why-it-makes-sense/articleshow/77667345.cms">Google eyes India’s ShareChat as Microsoft goes after TikTok in the US — here’s why it makes sense</a> <a href="https://www.businessinsider.in/tech/apps/news/tiktok-instagram-and-youtube-data-leak-exposes-data-of-235-million-users/articleshow/77668688.cms">TikTok, Instagram and YouTube data leak exposes data of 235 million users</a>

You Searched For "Patanjali Keswani" and got 12 results

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China's experience with co-living should be a warning for tenants as well as companies in India

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Indian students are short of 8 million beds-- and there's a lot of money to be made

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