Lemon Tree eyes overseas expansion in next 5 years as outbound travel booms

India's Lemon Tree Hotels is preparing to step up its overseas expansion over the ​next three to five years, as Indians increasingly travel ​abroad for leisure, a top executive said.

India is expected to become ‌the world's fourth-largest outbound tourism market by 2035, behind the U.S., China and Germany, rising from 10th place, Capital Economics said last year.

"We would like to go where the Indian traveller is going," Managing Director and CEO Neelendra Singh told Reuters in an interview last week, citing popular destinations such as Thailand, Vietnam and Singapore as natural fits for the brand.

He did not share more details.

 

The midscale chain has five hotels outside India, two in Nepal and Bhutan and one in the ‌UAE, out of more than 120 properties. Other hotel chains with luxury brands in their portfolio, including Taj owner Indian Hotels and Oberoi operator EIH, also have limited overseas footprints.

Lemon Tree has a pipeline of more than 120 hotels, with India remaining its main focus for now.

Owner of brands including Aurika, Red Fox and Keys Select, Lemon Tree is India's third-biggest homegrown ​hotel chain by number of rooms, behind Ginger-owner Indian Hotels and ITC Hotels, which runs ‌the Fortune and Welcomhotel brands.

Asked whether rising tensions in the Middle East could affect its plans, Singh said the company was sticking ​to its ‌strategy, adding the expansion remained a mid-term goal.

At home, Lemon Tree is exploring ‌bringing unbranded hotels into its system through a largely franchise-led model to tap India's vast independent hotel market, about half of which, according to ‌industry ​estimates, is unbranded.

In ​January, it said it would shift all hotel ownership to subsidiary Fleur and become a fully asset-light operator, creating two publicly traded ‌entities within 12 ​to 15 months.