Why Lemon Tree Is Spinning Off Its Hotels Into a New Company
Photo Credit: Lemon Tree Hotel, Srinagar in Jammu & Kashmir, India. Lemon Tree Hotels
Skift Take
Moral of the story: companies don’t have to own hotels to run them well anymore.
Lemon Tree Hotel’s management made the case Thursday for its recent restructuring plan, arguing that owning hotels and running hotels no longer belong in the same company — at least not if scale and speed are the goals.
Under the plan, Lemon Tree will become a largely asset-light hotel operating company. It will focus on brands, hotel management, franchising, loyalty, distribution, and digital services. Its owned hotels will be transferred to a separate, asset-heavy platform called Fleur Hotels, which will own, renovate, develop, and acquire hotel real estate.
At the same time, private equity firm Warburg Pincus will buy Dutch asset manager APG’s 41.09% stake in Fleur and commit up to INR 9.6 billion ($106 million) of fresh capital in stages to fund Fleur’s growth.
This turns Lemon Tree into a pure operator and positions Fleur as one of India’s largest institutional hotel owners.
Lemon Tree Wants to Be a Hotel Operator, Not a Hotel O
