Hospitality chain Lemon Tree Hotels Limited, which runs a network of 49 hotels, across 31 cities, is looking at the option of going ‘asset light’ once the ongoing expansion projects get implemented.

The chain, which currently operates 4,907 rooms across 49 properties, including managed hotels, across 31 cities, expects to operate 78 hotels with 8,152 rooms, across 54 cities by FY 2021.

Vikramjit Singh, President of Lemon Tree Hotels, said: “As we step up our presence with the ongoing expansion, we are looking at the prospect of expanding with an ‘asset light’ approach. That means, instead of owning hotels, we would take up management of hotels.”

Commissioning its fourth Hotel in Hyderabad, Singh said: “The country’s hospitality sector is witness to good growth and the occupancy levels have gone up and now range about 65.5 per cent. As against this, we have managed to have occupancy of over 76 per cent.”

With the launch of the fourth property in Hyderabad, a 85-room facility with a revolving restaurant, the hotel chain now handles 663 rooms in Hyderabad and sees the city having immense potential for growth for the hospitality sector.

Singh said the company had earmarked a capital expenditure of ₹1700 crore for capacity expansion of 1500 rooms. Of this capex, half of the amount has thus far been invested, the rest of the ₹850 crore would be invested by FY 2021.

Over the years, Lemon Tree has emerged as the country’s largest hotel chain in the mid market segment and the third largest overall on the basis of controlling interest in owned and leased rooms.

The company operates in the mid-priced hotel sector, consisting of the upper mid-scale, mid-scale and economy hotels. The focus is on to cater to middle class guests and deliver value for money proposition.

Sumant Jaidka, Chief Operating Officer of Lemon Tree, said: “The country’s hospitality sector is looking up and most of the metros have huge demand for quality hotel rooms. Going forward, we may even see shortage of rooms once the demand goes up further.”

Mentioning about current trends in terms of pricing, which is cyclical in nature when it comes to the hospitality sector, Singh said there is potential for prices to correct upward as the demand is going up.

One in every five employees the company recruits is an Opportunity Deprived Person, with some handicap, including speech and hearing impaired and social impairment.

comment COMMENT NOW