Mahindra Holidays' Q4'12 net down 7.3%

Leisure hospitality provider Mahindra Holidays and Resorts India Ltd (MHRIL) registered a 7.3% decline  (on stand-alone basis) in net profit after tax (PAT) for the quarter ended March 31, 2012. Part of the $14.4 billion Mahindra Group, MHRIL posted a net profit of Rs 37.23 crore in the fourth quarter of financial year 2012 (Q4'12) against Rs 40.18 crore in the same period last year (Q4'11).

On a consolidated basis, the company's PAT increased by 1.8% from Rs 102.76 crore in the financial year 2011 (FY'11) to Rs 104.64 crore in fiscal ended March 31, 2012.

Rajiv Sawhney, managing director, MHRIL, the company’s growth is in line with the expectations and is a result of aggressive investing in process, people and technology. He did not share details about capital expenditure (capex) earmarked for FY’13 or the development pipeline in terms of number of new resorts and guest rooms to be added to the network citing company policy on not making forward looking statements.

“We are strengthening our customer-centric efforts and have launched aN online booking facility on our website last year in November. With approximately 13% of all bookings being done online now, we expect the number to increase significantly in the next 12 months,” said Sawhney.

The company’s total income increased 19% to Rs 188 crore in Q4FY12 vis-a-vis Rs 165.78 crore in the same period last year. Its total expenses increased by 27% from Rs 111.67 crore in Q4’11 to Rs 142.13 crore in Q4’12.

Continuing with its expansion, the company increased its resort network to 42 from 35 in the previous financial year. With the addition of 485, its room inventory increased by 31% rooms taking the overall figure to 2,049 rooms in FY’12.

Three small resorts that were on a short lease were taken off the network. The company acquired 18,089 new members registering a 14% increase in membership base taking the total to 143,258 – the membership base in FY’11 was 125,169.

Arun Nanda, chairman, MHRIL, said the company is putting a lot of emphasis on strengthening their services, network and technology infrastructure. To this effect, 10 destinations were added to the network including Sikkim, Mussorie, Mahableshwar, Kumarakom, Jaisalmer, Kanatal, Goa and Rishikesh.

India's first Tune hotel coming up in Ahmedabad

Ahmedabad-based Mudra Real Estates Pvt Ltd (MREPL) has entered into a long-term lease agreement with Apodis Hotels & Resorts Ltd for an under-construction hotel project at '4 D Square Mall' Motera, Ahmedabad. Scheduled to start operations by early 2013, the property will be christened 'Tune Hotel @ Ahmedabad'

The 100-room hotel will be managed by the Indian joint venture company between Apodis and Tune Hotels of Malaysia. Targeted at the budget accommodation segment, Tune Hotels are currently operational in Malaysia, United Kingdom, Indonesia, Thailand and Philippines.

Jones Lang LaSalle Hotels acted as an exclusive advisor to the owner/lessor (MREPL) to facilitate this lease transaction including selection of the lease partner and negotiating the lease on behalf of the owners.

A pan India hotel development company promoted by PRAMA Group and assisted by IL&FS Investment Managers, Apodis Hotels & Resorts Ltd had (in 2009) entered into to a master franchise agreement with Malaysian budget hotel chain Tune Hotels.com to launch ‘Tune’ hotels in India. Part of real estate and infrastructure investment firm Trikona Capital, Apodis was instituted to operate, develop and invest in hospitality assets in the leisure, business class and low-cost segments in the country.

During an earlier interaction back in September 2009, Umesh Luthria, business head and chief investment officer, AHC, had said the company was negotiating for six sites across Mumbai in addition to pursuing locations in the country’s southern and northern regions.

In the ensuing three years, Apodis was to invest to the tune of $200 million for the first 20 properties in a debt to equity ratio of 60:40. The company was planning to have close to 2,000 rooms in cities such as Mumbai and Delhi, around 1,000 rooms in Hyderabad, Chennai and Bangalore. “The smaller markets will have between 200 and 500 rooms,” Luthria had said then.

Apodis is targeting 20 Tune hotels across tier I, II and III Indian cities and after testing the market with this budget hotel product, Apodis-Tune joint venture was to launch an India Thematic Development Fund in the second phase. While the size and time-frame for the launch of this fund was not made public, the money thus raised was to be utilised to pursue development of another 50 Tune hotels across the country.

The arrangement between the Apodis-Tune is such that while Apodis will own / lease the hotel assets Tune Hotels.com will be their branding partner. The management of these hotels will be handled by a separate company under the banner Tune Hotels India Ltd (THIL). Besides managing the hotels, THIL’s scope of work would include handling technical and development services and project management consultancy.

Apodis has already worked out the structure of their upcoming hotels in the Tier I, II and III cities in the country. The company will ideally look to set up a 250-300 room hotel in the key metros, followed by 150-200 keys and 100-150 keys in the next tow layers respectively.

“These will be a completely new breed of hotels designed keeping in mind the Asian customers’ requirement of a value for money (VFM) proposition. The USP is non-dependency on expensive technology and processes that come with hotel out of the APAC region. The average gross floor area (GFA) per key will be 30 square meters including the washroom area. The cost per key will depend on the location in the range of $30,000 to $100,000 i.e. Rs 14 lakh to Rs 45 lakh including land cost,” Luthria had said.

Though positioned as a budget hotel brand, Tune sees itself competing with the likes of three- to five-star category hotels across the markets it intends to operate in. Among potential locations being identified include cities like Amritsar, Bangalore, Chandigarh, Chennai, Delhi, Goa, Hyderabad, Indore, Jodhpur, Kochi, Mumbai, Pune, Pipavav, Raipur, Thiruvananthapuram and Tiruchirapally.

Focusing heavily on optimising costs, the hotels will have a very efficient room to staff ratio. While provisions for food and beverage, meetings and banqueting facilities will be part of the design plan, these will be largely outsourced to third-party operators that will further enhance the hotels cash flow thereby increasing profitability.

Update on May 16, 2013.

Air Asia promoter Tune Group launches first hotel in India

Lifestyle business conglomerate Tune Group (also a substantial shareholder of AirAsia via Tune Air) has opened its first hotel in India. It's hospitality vertical Tune Hotels began receiving guests at its 100-room property located in Ahmedabad that offered pre-opening promotional room rates starting from Rs 599 ($11). Catering to both domestic travellers and overseas visitors, especially members of the large non-resident Indian (NRI) community from Gujarat settled in places like the US, Britain and the Gulf, Tune Hotels will have five to six hotels in Gujarat as part of the company’s 20 planned hotels across India in the next three years. Besides properties in major cities – Delhi, Mumbai, Kolkata, Bangalore, Hyderabad and Chennai – Tune Hotels is focusing on Tier-2 and Tier-3 cities along with hotels in the tourist triangle destinations of Agra, Jaipur and Delhi.

Birds Eye Systems' Traffline facilitates tracking traffic real-time

Traffic congestion has been and currently still is the biggest problem faced by people living in key Indian metros. While most people only crib about it and forget about it as routine, Brijraj Vaghani and Ravi Khemani, co-founders of Mumbai-based Birds Eye Systems (BES) have decided to do something about it.

Backed with recent funding from Indian Angels Network (IAN) and significant work experience with wireless and internet companies in the US, the duo have launched a unique product called Traffline, which is a low-cost, real-time traffic monitoring system that broadcasts live traffic conditions to road commuters using its patented technology. The company also provides software and mobile applications, for transport related applications.

According to Brijraj Vaghani, users can download traffic related information from their online platform (www.traffline.com) and plan / optimise their road journey accordingly. “Real-time traffic monitoring is very common in the US but is not something done very seriously in India as yet as it is perceived to be very capital intensive. Taking the partnership approach, we collect raw data from various entities that use global positioning system (GPS) for their businesses. Using a patented algorithm, the data is then compiled to offer real-time traffic updates. This information is very useful to road commuters, traffic police, emergency service providers and infrastructure and city planning agencies,” said Vaghani.

Launched early this year, Traffline is currently available in cities like Mumbai, Delhi and Bangalore and claims to have nearly 1,000 visitors a day. The company had also launched a taxi booking service in September 2011 thereby building a user base of 15,000. In the coming few quarters BES will add more cities and taxi service providers to its network.

“We are planning integrate additional external sources with the Traffline platform and offer wider coverage. We will shortly start offering customised solutions to map providers that they can use to value add their products. The logistics companies will benefit from historical data on traffic patterns to plan their routing better,” said Khemani.

For people on the move, the company has also launched a mobile version of the website (www.m.traffline.com) there by allowing users to avail real time traffic information on their handsets. For Android and iPhone users, a mobile application (beta) has been developed and is available for downloads. An advanced version of this mobile app with integrated social networking will be introduced in the coming months.

Built on a platform that continuously analyses live vehicle movement and displays results on Traffline.com, the results are also made available in an easy to read text format on the mobile version. The service is currently free of charge for both web and mobile versions though the company is likely to unveil paid versions in the coming months.

Analysts see Ertiga driving Maruti

This story first appeared in DNA Money edition on Saturday, April 14, 2012.

Ertiga, the newest offering from the Maruti Suzuki stable that aims to create a new segment within the multi-purpose vehicle (MPV) space, has got a huge thumbs-up from analysts.

They feel with Ertiga, the company has a strong product in terms of value of money, design, mileage and pricing, which would give it a strong footing in the 370,000 unit per annum utility vehicle (UV) market, where it did not have a presence. With an attractive introductory price proposition (Rs589,000 -845,000), Ertiga poses a challenge to current leaders Toyota’s Innova (starting price: Rs914,000) and M&M’s Xylo (starting price: Rs734,000).

Toyota and M&M have a combined volume of 9,000 units per month. While Maruti is targeting 4,000-5,000 units per month, analysts see it selling 2,000-3,000 units.

Kaushal Maroo and Keyur Vora, analysts, Religare Capital Markets, said, “The Ertiga will occupy a niche between premium hatchbacks and larger utility vehicles. Given its brand equity and reach, we expect the Ertiga to clock a monthly run-rate of 3,000 units.”

MPVs accounts for 10% of the total passenger vehicle market and in the past three years have outpaced car volume growth. According to industry estimates, about 10 million vehicle owners are looking for an upgrade, which spells a huge opportunity for Ertiga.

Hitesh Goel, analyst, Kotak Institutional Equities Research, said, “It could be attractive for a customer who is buying Xylo, Sumo Grande and Tavera as it is more compact and offers better value than these models (better fuel efficiency and lower price). However, Ertiga is under-powered compared with Xylo and Innova.”

Maruti is looking to differentiate the vehicle on two counts—its sedan-like handling, better driveability and fuel efficiency —16.02 / 20.77kmpl for petrol/diesel variants.

Jatin Chawla and Akshay Saxena, research analysts, Credit Suisse, said, “The Ertiga is around 30% lighter than the Xylo. Hence, despite its significantly smaller 1.3 litre diesel engine than Xylo’s 2.5 litre engine, the differences in power and torque are not as significant. Moreover, the Ertiga is built on a monocoque design (like the XUV), compared to a body on a frame chassis in the Xylo. Hence, the handling is much better, which should appeal to the personal segment.”

However, the competition would follow soon.

While Renault is introducing compact SUV Duster, Ford is bringing in the EcoSport, Nissan is coming with Evalia, M&M mini Xylo and GM is planning a new MPV.

“These products are likely to be priced between Rs 600,000 and Rs 10,00,000,” said Aditya Makharia and Ritesh Gupta, analysts, JPMorgan.

Deepak Jain, equity research, MF Global, said a number of compact MPVs are to be launched this fiscal but the Ertiga’s launch provides Maruti a head-start.

Meanwhile, Maruti will start exporting Ertiga to Indonesia by end of the next month.

Fund-short hotels find it hard to come up

An edited version of this story first appeared in DNA Money edition on Thursday, April 12, 2012.

India’s largest realty firm DLF Ltd bought out its joint venture (JV) partner Hilton for Rs 120 crore in December 2011. Instituted in 2006-7, the DLF Hotels & Hospitality Ltd (JV firm), was to set up 75 hotels across the country. The transaction, according to DLF spokesperson, was done to take complete ownership of the JV and its underlying assets including incomplete hotel sites with a view to monetise them. “This is part of DLF's ongoing strategy to divest non-core assets," the spokesperson had said.

Similarly, in June 2007, another leading realtor Emaar MGF had announced 50:50 JV with Premier Inn, a subsidiary of UK’s largest hospitality company Whitbread PLC. The JV was targeting to develop and operate 80 limited services hotels across India under the brand Premier Inn over next 10 years with an investment of up to $600 million. However, with Emaar MGF running into its own set of financial troubles, Premier Inn bought out their stake in the JV and is now pursuing expansion on its own.

Taking just the two instances into account, approximately 150 hotels or 15,000 guest rooms (assuming each hotel had 100 keys) have gone out of the Indian hospitality development pipeline. Financial hurdle in pursuing the developments was that one common factor with both the fiascoes.

 

Commenting on the situation, Aly Shariff, managing director, Premier Inn India P Ltd, said, ”The JV partner (Emaar MGF) had a change in their overall business strategy, as a result we decided to buy them out thereby holding 100% of the company.” The UK’s largest hotel chain has significantly scaled down its plans and will now expand on its own. The hotel chain is now targeting an overall guestroom inventory of over 650 in the next 3 years including the 200 plus already operational hotel rooms across Delhi and Bangalore. Going forward, the company will adopt asset light strategy (management contracts) to expand in the Indian hospitality market.

A white paper released by global hospitality consulting and services firm HVS in collaboration with World Travel & Tourism Council (WTTC) recently, said India will need overall investment to the tune of $25.5 billion for constructing 180,000 additional hotel rooms in the next decade from now i.e. 2012.

However, HVS also feels that challenges related to sourcing capital for these hotels will impact the overall development pipeline.

Kaushik Vardharajan, managing director, HVS Hospitality Services India, said, “There will be a shortfall in the overall projected additional supply of 1.88 lakh hotel rooms in the next seven to 10 years and we are of the opinion that only 60% of these guest rooms will actually get constructed within the stipulated time frame.”

Leading hospitality firms and financial institutions operating in the Indian market, are in agreement with the fact that non-availability of capital and or lack of funding options are significantly impacting hotel developments in the country.

At a recently concluded hotel investment conference (HICSA 2012), at Grand Hyatt Hotel in Mumbai, erstwhile CEO of IDFC Private Equity Luis Miranda, said while there is significant demand for funds in the Indian hospitality sector there aren’t enough sources.

“If the project and the investment are priced properly I think money will come. However, hospitality assets tend to be so expensive in India that it just doesn’t make sense for investors to invest,” he said. Miranda is currently advisor to SilverNeedle Hospitality which is part of the Nadathur Group, an investment firm owned by Nadathur S Raghavan and family, co-founder of NASDAQ-listed Infosys Technologies.

Miranda’s concerns were echoed by other HICSA 2012 panel discussion participants including Navneet Bali, chief investment officer, Duet India Hotels, Peter Meyer, managing director, Pacifica Partners, Sandeep Kotak, executive vice president, Kotak Mahindra Bank and Vijay Jayaraman, senior vice president, Equity International.

Akshay Kulkarni, executive director - SA, Cushman and Wakefield Hospitality, feels while companies are looking to expand, their single most important concern is funding it. “A majority of the hotel companies operating in the country are in agreement of the fact that there isn’t enough capital to build all the hotel rooms being talked about,” said Kulkarni.

The severity of the problem is evident from the fact that, companies that raised money in the past and over-leveraged their balance sheets are now left with not much option but to sell some of their existing assets.

For instance, the home grown luxury hotel chain Leela Palaces Hotels & Resorts had sold its Kovalam hotel for Rs 500 crore while retaining management contract. The BSE-listed company is considering similar options for the company’s yet to open luxury hotel in Chennai. The money thus raised will be used to retire debt instead of building new hotels and the management now wants to focus on pursuing the asset light strategy (management contracts) going forward.

Following the footsteps is Bangalore-based BSE-listed hotel company Royal Orchid Hotels Ltd (ROHL) which is looking to divest a few of its existing hotels in the portfolio to retire debt and use the balance money to fund developments in key metros like Mumbai. 

In fact, ROHL has already inked a deal to sell its Royal Orchid Central Ahmedabad hotel. “The deal is in final stages of conclusion and the hotel has been bought by SAMHI Hotels Pvt Ltd,” said a source familiar with the development. However, it is not clear at this stage whether ROHL will retain management post the closure of this deal.

Concern over return on investment, industry experts feel, is another reason why investing in the hotel sector is not priority for financial institutions. Sarovar Hotels & Resorts had, in 2005, raised Rs 38 crore from two global private equity funds to part finance its new budget hotel brand, Hometel. Bessemer Venture Partners Trust (an affiliate of Bessemer Venture Partners) and New Vernon Private Equity Ltd had contributed equally in this round of funding.

“The investment, in its seventh year now, has already crossed holding period of 5-6 years and the PE funds will have to start exploring exit options. It will be really challenging (for the PE firms) to take the exit call considering the market conditions and the overall health of the hospitality sector in the country isn’t looking very favourable to register a respectable return on investment,” said a top industry official requesting not to be quoted.

All is not lost with investing in the Indian hospitality market. Of a few hotel companies spoken to, a handful of them are expected to pump in approximately $535 million over the next 8 eight years from now. Interestingly a majority of them are backed by equity participation from international chain while others are banking on their proven track records and execution capabilities for investing in building hotels.

 

Hotels-focused fund Duet India Hotels (DIH) which has a partnership with InterContinental Hotels Group (IHG) is looking at an investment of around $125 million in addition to the close to $200 million being earmarked already. The DIH management has set itself a target of 1,000 rooms for the next 8 years and is aggressively working towards getting the hotels up and running.

“We currently have enough money for deployment and are aggressively focussing on demonstrating execution capabilities. A new round of fund raise will happen in the future and it’s really heartening to see that international institutions are already showing interest on investing with our hotel development platform,” said Bali.

The UK’s Premier Inn will investment to the tune of $35 million. “We will be investing approximately Rs 175 crore (to be funded through internal accruals) for new properties coming up in cities like Pune (113 keys), Goa (131 keys) and Chennai (108 keys),” said Shariff.

Urbanedge Hotels, a joint venture company between Citigroup Property Investors and Auromatrix Hotels, has partnered with Starwood Hotels & Resorts Worldwide to develop ‘aloft’ hotels across India. Kumar Sitaraman, chairman and CEO, Auromatrix Hotels Pvt Ltd, said, “We will be investing to the tune of approximately $300 million in the said time frame. While a significant portion ($200 million) of the capital expenditure will come from internal accruals, we will explore other options including private equity for the balance $100 million.”

Adopting the selective investment approach, SilverNeedle Hospitality will invest a very conservative $75 million. The hotel company currently manages over 4,000 keys in the Asia-Pacific region, with an aim to have over 10,000 keys in its portfolio by 2016.

Among, prominent international hotel chains (with significant presence in India) that have already committed equity participation with their respective joint venture partners in India include Accor (with InterGlobe), Marriott International (with SAMHI Hotels), Carlson Rezidor (with Bestech), InterContinental Hotels Group (with Duet India Hotels) and Hyatt International (with Emaar MGF).

Starwood Hotels and Resorts Worldwide is currently the only international hotel company that is yet to invest in the Indian hospitality market. "It's not that we are averse to investing. We have done that in the international markets and will consider if the situation demands. However, I must also state here that our partners are very confident of the value that we bring to the table and that is the key reason they associate with us for their hotel developments," said, Simon M Turner, president - global development, Starwood Hotels and Resorts.

Indraprastha Gas moves High Court after PNGRB orders tariff cut

An edited version of this story first appeared in DNA Money edition on Wednesday, April 11, 2012.

The decision by Petroleum and Natural Gas Regulatory Board (PNGRB) to cut gas tariffs in New Delhi has created a major furore in the market.

Going against the order, monopoly gas supplier in the country’s capital Indraprastha Gas Ltd (IGL) has approached the Delhi High Court to contest the PNGRB directive. “We are not clear how they (PNGRB) have calculated this tariff. We do not know the assumptions they have made. IGL has approached Delhi high court, where we have challenged the constitutionality and legality of the powers of the regulator to fix the tariff,” said M Ravindran, managing director, IGL at a media conference in New Delhi.

A joint venture of GAIL (India) Ltd, Bharat Petroleum Corp and the state government of New Delhi, IGL sells auto and cooking gas in New Delhi and adjacent areas.

While IGL is the first to be impacted by this order, industry experts said, other (listed and private) players like Gujarat Gas, Mahanagar Gas, Petronet LNG, Adani Gas etc. are likely to feel the heat next.

Rohit Nagraj, senior research analyst - institutional equity research, Centrum Broking, said the network tariff and compression charges submitted by IGL to the PNGRB have been slashed by almost 60%. “This decision by the regulator will certainly put pressure on peers as their tariffs will also be reviewed and revised based on the parameters used for ordering the price cut for IGL,” he said.

Echoing the sentiments, Dhaval Joshi and Jagdish Meghnani, analysts with Emkay Global Financial Services Ltd, added that post PNGRB’s announcement (and if Implemented) would result in private players staying away from the city gas distribution (CGD) space as lucrative margins would significantly curb down. “In the current scenario only public sector units (PSU) will be the key players in the segment which would run the business with the regulated margins,” the analysts said in their report.

PNGRB, the Indian downstream regulator with a mandate to set tariffs, in its recent order on Monday asked IGL to lower certain tariffs and prices of the natural gas it sells in the capital city. This move, analysts tracking the sector feel, will significantly impact IGL’s operating margins.

As per the new order, IGL will have to lower its network tariff for compressed natural gas (CNG) and liquefied petroleum gas (LPG) by around 60% in New Delhi as well as NCR. This in effect is expected to bring down the price of compressed natural gas in the capital could come down by 20% and of piped natural gas (PNG) by 10%. The new tariffs are applicable for a period of five years, post which assumptions regarding capex and operating costs will be reviewed and new tariffs will be effective prospectively.

The tariffs have been fixed retroactively from April 2008 (at levels lower than what IGL had been charging) and the PNGRB has also ordered the company to refund the difference to its customers, which as per rough estimates, could be as high as Rs 1,600 crore.

According to Dikshit Mittal, analyst - institutional research, Sbicap Securities Ltd, said the regulator’s decision to cut tariffs was largely based on IGL’s capex plans which the company management wasn’t able to justify. “This is a major negative for the stock and operating profits of the company are expected to decline by more than 50% as compared to our earlier estimates. At the net profit level, fall is expected to be much sharper with expected 80% downgrade in F13 PAT estimates,” he said.

Lower net block, lower future capex and higher volumes assumptions by the regulator have certainly led to lower approved tariffs feel Gagan Dixit and Sapan Shah, analysts with quant Global research. “Regulator assumed FY09 as first year of operations vs. IGL’s FY10, subsequently lower future profile of net block was assumed for tariffs calculations. Regulator conservatively assumed just 47% of future capex provided by IGL on steel pipeline network augmentation based on actual capex done vs. initially submitted in technical report by IGL. Additionally, PNGRB does not allow offsetting of 1-2% gas loss during operations via higher tariffs,” said the analysts in their report.

Since, marketing margins were agreed up on between the buyers and the sellers, it was said that IGL could charge higher marketing margins in an attempt to offset the lower tariff. However, it is now understood that the regulator has initiated the process to ultimately regulate marketing margin that can be charged by any gas marketing entity thereby negating any such possibility.
“While network and compression tariffs are calculated based on 14% post tax IRR, marketing margins are currently de-regulated. Currently, issue of regulating marketing margins is also under the consideration of PNGRB, which may limit flexibility in maintaining the margins,” Mittal said.

Rattan Keswani may partner Patu Keswani for new hospitality venture

Rattan Keswani, the erstwhile president of Trident Hotels at East India Hotels Ltd (EIH) is likely to partner with Patu Keswani, chairman and managing director of Lemon Tree Hotels Pvt Ltd (LTHPL), which owns and manages the Lemon Tree Premier, Lemon Tree and Red Fox chain of hotels.

While both Rattan and Patu are tight-lipped about their possible association to launch a new business venture, people familiar with the development said an announcement is likely once Rattan Keswani completes his notice period at EIH by April-end.

“He (Rattan) is partnering hands with Patu Keswani to launch the third-party hotel management company which is on the cards. He will be heading the new venture as its president,” said a top official from a leading hospitality company.

Both Rattan and Patu however, did not respond on the said development.

In an earlier interaction, Patu Keswani had shared some of the new developments being worked out at Lemon Tree Hotels including the setting up of a new third-party hotel management company. The new venture was being mulled keeping in mind the growing demand for professional hotel management companies, which industry experts also feel, is a quicker way of expanding business and gaining market share in the current business environment.

“It (hotel management company) is going to be a step-down company where we will do joint venture with other people. It could also be a subsidiary of Lemon Tree where we will be managing hotels of other asset owners,” said Patu Keswani.

Thus projects meeting LTHPL’s brand standards would be operated / managed under the company’s existing brands viz. Lemon Tree Premiere, Lemon Tree or Red Fox. However, LTHPL will also create three new brands to operate / manage hotels that don’t meet the hotel company’s brand standards.

“We intend to do management contracts only in the mid-scale, upscale and deluxe categories. Thus, three new brands are currently being conceived and work is in a very preliminary stage. The new brands will sit in the management company and we should be ready to unveil them in another 3-4 months from now,” he said.