Lemon Tree Hotel sets aside Rs. 850 capex for expansion

Lemon Tree Hotel, a newbie to the secondary market, is aiming to expand its presence across the country with an estimated investment of Rs. 850 crore.

By the fiscal year 2021, the company expects to bring on board 1,500 rooms which are presently under construction. For this expansion, the company has earmarked an amount of Rs. 1,700 crore. Further, half of this amount is already deployed and the rest would be spent over the period.

Out of total rooms, the company owns around 64 per cent rooms and the rest are only managed by the company. Going forward, it plans to tilt its business strategy towards an asset-light model by increasing the share of managed hotels and reducing the share of hotels that it owns.

Lemon Tree Hotels (LTH) is a fast growing chain of mid-priced hotels run by Indian hospitality industry's veterans. The company is India's third largest hotel chain on the basis of controlling interest in owned and leased rooms.

On Tuesday, at 11.55 hours, the stock of Lemon Tree Hotels was trading positive at Rs. 74.3 per share, up by 1.3 per cent from its previous close.