Lemon Tree on expansion spree

The Lemon Tree Hotel Company opened its twin properties, Lemon Tree Hotel, Sector 60, and Red Fox Hotel, Sector 60, in Gurugram recently. In an exclusive interaction, Vikramjit Singh, President and Chief Revenue Officer, The Lemon Tree Hotel Company, spills the beans on the company’s upcoming plans.

Nisha Verma

Why have you chosen Gurugram as a destination for the new properties, despite already having so many hotels here?
With these twin hotels, our count in Gurugram goes to about 530 rooms. The reason why we chose this location is because the catchment area includes the Golf Course Extension Road, Golf Course Road, and Sohna Road, all coming up in a big way. After Cyber City, this is where the next boom is going to happen, as the maximum commercial development is coming here. I feel that there will never be a dearth of business in this part of town. We have also put up one of the largest convention centres in this part of the NCR region that will help us fill up the rooms. Our experience says that one can never go wrong in Gurugram. We have been in this city since 2004. All our hotels have an average occupancy rate of more than 80 per cent, making us very bullish about Gurugram.

Since you have opened two starkly different properties here, what is the business strategy you are looking at?
While Lemon Tree is a mid-scale brand, Red Fox is our economy brand. By putting two brands here instead of just one large inventory, we can cater to different segments for the business. We will also be promoting the F&B outlets for walk-ins, as there are not many dining options along this stretch.

Please elaborate on the convention facilities here.
The convention centre here can take just under 2,000 people across two floors in free style. It is going to be one of the largest convention facilities in this part of town, and would be a big magnet for business. Gurugram does not have a very large convention centre and this is going to be the first of its kind, especially in the mid-scale market. We have a huge capacity for weddings, especially when we are surrounded by a big residential community. We can also cater to parties, conferences, corporate events, and MICE groups.

How has business fared so far? What are your expectations going forward?
As against the average Indian occupancy of 60-61 per cent, Lemon Tree finished the year at about 76 per cent. We are anyway among the highest in the country in terms of occupancy and we are hopeful that we will maintain that position. The only way to grow fast is through a price increase and we are looking at some aggressive strategies in this relation in the coming year.

What are the upcoming properties for the company?
There are two hotels under construction in Mumbai that will take the room inventory to about 1,000 rooms. We are opening new properties in Udaipur, Kolkata, and Shimla and are expanding our hotel in Alleppey. We are also looking at managing hotels in Gangtok, Siliguri, Jammu, and Coimbatore. All these hotels will be up within the next two years. Jammu will open early, followed by Gangtok, Corbett, and Siliguri. We already have three hotels in Hyderabad and will be opening another one there.

What is your USP, especially with more international mid-market brands coming into the market?
Supply creates demand and I think that competition is going to be good and healthy. In the end, it is all about survival of the fittest. We are a well-accepted brand with 40 hotels across 23 cities and are growing very fast. Our nationwide presence is something that a lot of the other brands do not have and I think that will help us in good stead when we face competition. We are practically opening a hotel every alternate month.