Lemon Tree Hotels (NSE: LEMONTREE) expands with 52-room Mahoba property—what it means for tier II travel

Lemon Tree Hotels Limited (NSE: LEMONTREE), one of India’s fastest-growing hospitality chains, has announced the signing of a new hotel under its Keys Select brand in Mahoba, Uttar Pradesh. The 52-room property will be operated by Carnation Hotels Private Limited, a wholly owned subsidiary of Lemon Tree Hotels Limited, and will cater to both business and leisure travellers in a region known for its cultural and historical significance.

The newly signed hotel in Mahoba marks another strategic addition to Lemon Tree Hotels Limited’s growing Uttar Pradesh portfolio. With eight hotels currently operational in the state and thirteen more already in the pipeline, this new addition brings the company’s total presence in Uttar Pradesh to twenty-two properties. The announcement signals Lemon Tree Hotels Limited’s continued confidence in expanding across tier II cities that offer both commercial growth and tourism potential.

Why is Lemon Tree Hotels targeting Mahoba as a heritage and tourism-led hospitality market?

Located in the Bundelkhand region of Uttar Pradesh, Mahoba is a culturally significant destination known for its 9th-century granite Sun Temple, rock-cut Jain Tirthankara sculptures, and historical lakes like Kirat Sagar and Madan Sagar. The Badi Chandrika Devi Temple and folklore surrounding warrior legends Alha and Udal add a mythic dimension to the city’s appeal. The new Keys Select hotel, with its modern amenities and strategic location, seeks to capitalize on this growing domestic interest in heritage-rich destinations.

The property will include 52 well-appointed rooms, a restaurant, a banquet hall, a conference hall, a swimming pool, and a fitness center. The hotel is situated about 75 kilometers from Khajuraho Airport and approximately five kilometers from Mahoba Railway Junction, making it accessible for both domestic and inbound tourists. With road connectivity in place for public and private transport, the hotel aims to serve a wide range of travellers including pilgrims, heritage tourists, and business guests.

What does this signing reveal about Lemon Tree Hotels’ brand strategy and tier segmentation play?

This expansion aligns with the broader vision of Lemon Tree Hotels Limited to scale up in emerging micro-markets through a capital-efficient model. By leveraging Carnation Hotels Private Limited to manage properties rather than owning them outright, the group continues to build a scalable, asset-light platform that enhances its nationwide footprint while maintaining operational control and brand consistency.

The group’s management has reaffirmed its intention to make Uttar Pradesh a core geography in its national expansion strategy. Vilas Pawar, Chief Executive Officer of the Managed and Franchise Business at Lemon Tree Hotels Limited, remarked that the signing of the Mahoba property reflects the company’s ongoing efforts to deliver refreshing and comfortable hospitality experiences across India’s cities and towns. He highlighted the state’s booming commerce, cultural depth, and strategic value as key drivers of the company’s growing presence.

How does the Keys Select brand help Lemon Tree tap into midscale demand across smaller cities?

The Mahoba announcement is part of a much larger strategy in which Lemon Tree Hotels Limited is extending its reach beyond India’s major metros and deep into regional markets where infrastructure is improving and domestic tourism is accelerating. With seven distinct brands across its portfolio, Lemon Tree Hotels Limited caters to a spectrum of segments ranging from the value-driven Red Fox and Keys Lite brands to upscale offerings like Aurika Hotels and Resorts and Lemon Tree Premier. The Keys Select brand, under which the Mahoba hotel falls, specifically targets the midscale segment, providing well-appointed stays that combine comfort with affordability.

Since launching its first 49-room hotel in 2004, Lemon Tree Hotels Limited has expanded its portfolio to include over 120 operational hotels across more than 80 cities. The group also has an international presence in Dubai, Bhutan, and Nepal and is continuing to invest in properties across religious, wildlife, leisure, and business destinations. Its pipeline of 120 additional properties reinforces its status as a leading force in India’s midscale and premium hospitality segments.

What makes Bundelkhand an emerging travel corridor for hospitality investments in India?

The Mahoba location strengthens the group’s brand presence in the Bundelkhand region, a zone that has received increased attention for its untapped tourism potential and developing infrastructure. Analysts covering Lemon Tree Hotels Limited believe that the company’s expansion into such secondary markets is a prudent move that aligns with shifting travel patterns. There is a growing preference among domestic tourists for culturally immersive experiences in destinations that lie off the traditional Golden Triangle route. Mahoba, with its temples, shrines, and lakes, fits that narrative well and offers Lemon Tree Hotels Limited a strong first-mover advantage in organized hospitality in the area.

How is Lemon Tree balancing metro assets with strategic pushes into tier II and tier III markets?

Strategically, Lemon Tree Hotels Limited is balancing its expansion across different tiers by combining large urban centers with high-potential secondary towns. While it continues to operate in metro markets like Delhi-NCR, Mumbai, Bengaluru, and Hyderabad, the company is also building traction in cities such as Jaipur, Udaipur, Kochi, Indore, and now Mahoba. The balance of spiritual, leisure, and commercial appeal is critical to this strategy, allowing for diversified occupancy and revenue sources across segments.

What structural tailwinds are supporting regional hotel demand post-pandemic in India?

The Mahoba hotel also supports the company’s long-term thesis that domestic tourism in India is not only recovering post-pandemic but is structurally growing. Pilgrimage tourism, regional heritage circuits, and short-haul leisure travel are seeing a surge in demand, driven by rising disposable incomes, improving connectivity, and aggressive promotion by state tourism boards. Lemon Tree Hotels Limited is well-positioned to capitalize on this trend with a brand architecture that maps to varied customer expectations and price points.

How does Lemon Tree’s asset-light model help it scale across high-growth secondary cities?

From an investor perspective, Lemon Tree Hotels Limited’s ongoing expansion via the Carnation Hotels Private Limited platform underlines a commitment to scaling efficiently without overleveraging its balance sheet. The asset-light management model enables quicker market entry and higher return on capital employed while ensuring that the group retains a high degree of control over service quality and brand integrity.

What are institutional investors watching as Lemon Tree Hotels enters FY26 with a 240-property pipeline?

Stock market observers have noted that while the share price of Lemon Tree Hotels Limited has remained relatively stable in recent months, institutional sentiment continues to be constructive. The hospitality sector at large is benefiting from the return of domestic and international travel, and Lemon Tree Hotels Limited’s growing footprint in tier II and III cities could contribute meaningfully to revenue and EBITDA growth in FY26 and beyond.

As Lemon Tree Hotels Limited continues to execute its strategy of expanding in high-growth, under-penetrated regions, the Mahoba hotel will likely serve as a template for similar ventures across India. With strong heritage appeal, transport connectivity, and regional significance, Mahoba provides the kind of environment that fits neatly into the group’s long-term brand strategy.

The new Keys Select by Lemon Tree Hotels in Mahoba is more than just another signing. It represents the group’s steady and systematic approach to capturing India’s domestic travel momentum through thoughtful, heritage-aligned, and well-branded hospitality infrastructure.

What are the key takeaways from Lemon Tree Hotels’ new Mahoba property announcement?

• Lemon Tree Hotels Limited has signed a new 52-room hotel under its Keys Select brand in Mahoba, Uttar Pradesh, further expanding its presence in the state.

• The property will be managed by Carnation Hotels Private Limited, the wholly owned management subsidiary of Lemon Tree Hotels Limited.

• Mahoba, located in the Bundelkhand region, is a culturally significant district known for temples, lakes, and medieval heritage, positioning it as a promising tier II leisure destination.

• This addition brings Lemon Tree Hotels Limited’s Uttar Pradesh portfolio to 22 properties, including operational and upcoming hotels.

• The hotel will offer a restaurant, banquet and conference facilities, a swimming pool, and a fitness center, targeting both business and leisure travellers.

• The project supports Lemon Tree Hotels Limited’s tier II expansion strategy by activating underpenetrated cultural corridors through its midscale brand architecture.

• Keys Select is one of seven brands operated by Lemon Tree Hotels Limited, aimed at value-conscious guests seeking reliable service in non-metro markets.

• The hotel’s strategic location near Mahoba Railway Junction and Khajuraho Airport enhances its connectivity and accessibility.

• The group continues to scale using its asset-light model, with Carnation Hotels Private Limited enabling capital-efficient expansion into heritage and regional markets.

• Investors and analysts are watching Lemon Tree Hotels Limited’s execution in secondary cities as a key pillar of its growth strategy heading into FY26.