Lemon Tree Hotels expands with new properties in Andhra Pradesh and Chhattisgarh, bolstering mid-market footprint

Lemon Tree Hotels Limited (NSE: LEMONTREE, BSE: 541233) has announced the signing of two new license agreements, marking its latest push into India’s rapidly developing tier-II markets. The two properties—Lemon Tree Resort in Bapatla, Andhra Pradesh, and Lemon Tree Hotel in Bhilai, Chhattisgarh—are set to be managed by Carnation Hotels Private Limited, the wholly owned subsidiary responsible for the group’s managed and franchise operations. According to Lemon Tree Hotels’ disclosure to the National Stock Exchange and BSE, these additions are designed to cater to both business and leisure travellers, further strengthening the company’s footprint in regions that have been largely underserved by premium hospitality players.

This dual-property signing comes at a time when India’s hospitality sector is witnessing a pronounced shift beyond the major metros. With travel patterns increasingly favoring emerging urban and semi-urban centers, brands like Lemon Tree Hotels are seizing the opportunity to capture first-mover advantage. Industry analysts tracking the sector suggest that targeting destinations such as Bapatla—known for its tranquil Suryalanka Beach—and Bhilai, the Steel City of India, allows hospitality groups to balance portfolio risk, diversify revenue streams, and ride on the region’s infrastructural and industrial growth.

What makes the new Lemon Tree Resort in Bapatla a strategic play for coastal tourism in Andhra Pradesh?

The new Lemon Tree Resort in Bapatla is positioned as a gateway to one of Andhra Pradesh’s most serene coastal towns. The property, situated approximately 100 kilometers from Vijayawada International Airport and 85 kilometers from the main railway junction, promises 90 well-appointed rooms along with a restaurant, bar, banquet facilities, meeting rooms, a swimming pool, spa, and fitness center. With Suryalanka Beach emerging as a sought-after destination for domestic leisure tourism, the group’s choice of Bapatla underscores a clear intent to tap into the growing appetite for premium-yet-affordable resort experiences outside traditional hotspots.

By offering full-service amenities in a relatively underdeveloped hospitality market, Lemon Tree Hotels aims to cater to a new wave of travelers—urban families, business offsites, and destination event organizers—looking for quality accommodation near the beach. Executives familiar with regional travel trends believe that the addition of such properties will help elevate Andhra Pradesh’s status as a viable alternative to established coastal markets like Goa or Kerala.

How does the Bhilai launch signal Lemon Tree Hotels’ entry into new industrial markets?

Lemon Tree Hotel, Bhilai, marks the group’s debut in Chhattisgarh and brings 72 rooms, a restaurant, banquet facilities, a meeting room, a swimming pool, and a spa to the city best known for its industrial might. Bhilai, with its iconic steel plant and evolving urban landscape, represents a unique opportunity for hospitality brands. The hotel’s location—about 58 kilometers from Swami Vivekananda Airport in Raipur and 41 kilometers from the Raipur Railway Station—ensures connectivity for both business and leisure guests.

The strategic rationale here is clear: as India’s manufacturing and industrial hubs continue to grow, so does the demand for quality accommodation that can cater to traveling executives, consultants, and engineers, as well as families visiting the city for business or education-related purposes. Lemon Tree Hotels’ focus on providing a consistent mid-market experience is expected to resonate well with the steady influx of business travelers drawn by Bhilai’s industrial growth.

What is the broader growth strategy for Lemon Tree Hotels Limited across India and internationally?

Lemon Tree Hotels Limited has evolved into one of India’s largest and fastest-growing hospitality groups, now operating over 120 hotels across 80 cities in India and abroad. The group’s portfolio spans seven distinct brands—Aurika Hotels & Resorts, Lemon Tree Premier, Lemon Tree Hotels, Red Fox, Keys Prima, Keys Select, and Keys Lite—offering accommodation from upper upscale to value-conscious segments. The expansion into Bapatla and Bhilai is part of a wider pipeline that boasts more than 120 upcoming properties, further cementing the company’s ambition to deliver consistent experiences not just in India’s metros but also in its fast-emerging tier-II and tier-III markets.

Since the opening of its first 49-room hotel in 2004, Lemon Tree Hotels has rapidly scaled up operations. The group’s international presence in Dubai, Bhutan, and Nepal is complemented by deepening penetration across India, with operational and upcoming hotels in cities like Delhi-NCR, Mumbai, Bengaluru, Hyderabad, Jaipur, Udaipur, Kochi, and Indore. Management points out that this broad network enables the company to capture demand from both the business and leisure travel segments, while offering a standardized, value-driven experience.

How do these property signings fit into Lemon Tree Hotels’ asset-light management model?

Both new properties will be managed by Carnation Hotels Private Limited, Lemon Tree Hotels’ wholly owned subsidiary specializing in management and franchise contracts. This approach is emblematic of the group’s asset-light strategy, which minimizes capital expenditure while accelerating brand growth. By managing rather than owning the properties, Lemon Tree Hotels leverages its brand reputation, operational expertise, and technology systems, while local partners take on the financial and development risks.

Executives across the sector increasingly view such asset-light models as the key to rapid scale, especially in fragmented markets where hotel development is often led by local entrepreneurs. For Lemon Tree Hotels, this model not only speeds up expansion but also allows for a more nimble response to shifting demand and regional market trends.

What do industry observers expect from Lemon Tree Hotels’ growth and market positioning?

Industry analysts tracking the hospitality sector believe that Lemon Tree Hotels’ expansion into Bapatla and Bhilai aligns with a broader trend of branded chains moving into India’s “next 100 cities.” By deepening its presence in secondary markets, the group positions itself to capitalize on untapped travel demand and to build brand loyalty among a growing demographic of aspirational, value-seeking consumers. With competition intensifying in the mid-market segment, observers expect Lemon Tree Hotels to double down on product consistency, digital guest experience, and loyalty programs to maintain its edge.

Lemon Tree Hotels’ financial performance, as reflected in its listed status on the NSE and BSE, has benefited from a steady pipeline of new openings and robust occupancy rates post-pandemic. The market will be watching closely to see how new property additions contribute to revenue and margin growth in the upcoming quarters.

What is the latest sentiment and outlook for Lemon Tree Hotels’ stock and investor base?

Shares of Lemon Tree Hotels Limited (NSE: LEMONTREE, BSE: 541233) have shown resilience amid sector volatility, with institutional investors taking a keen interest in the company’s expansion plans and asset-light management approach. Over the past week, Lemon Tree Hotels’ stock price has reflected moderate upward momentum, fueled by optimism around the group’s growth trajectory and improving travel demand in non-metro markets. Analysts following the stock maintain a positive outlook, with a consensus leaning towards a “buy” rating, citing strong fundamentals and robust development pipeline as key drivers.

The company’s ability to execute its growth strategy while maintaining brand standards will be critical to sustaining investor confidence. Any acceleration in new signings, particularly in under-penetrated markets, is likely to be viewed favorably by both domestic and international institutional investors.

Is Lemon Tree Hotels reshaping India’s hospitality landscape with its tier-II focus?

With the latest signings in Bapatla and Bhilai, Lemon Tree Hotels is sending a clear signal to the market—it intends to be the hospitality brand of choice in India’s emerging cities, not just its metro hubs. By marrying an asset-light management strategy with a relentless focus on mid-market travelers, the group is well positioned to capture the next phase of hospitality growth in the country. As institutional sentiment remains positive and the pipeline expands, all eyes will be on Lemon Tree Hotels to see if it can translate this bold expansion drive into sustainable long-term returns.

Key takeaways: what Lemon Tree Hotels’ dual property signings reveal about its growth strategy

• Lemon Tree Hotels Limited has signed new license agreements for properties in Bapatla, Andhra Pradesh, and Bhilai, Chhattisgarh, both to be managed by its subsidiary Carnation Hotels Private Limited.

• The Bapatla resort will feature 90 rooms and a full suite of amenities including a restaurant, bar, banquet hall, meeting rooms, swimming pool, spa, and fitness center, targeting coastal tourism near Suryalanka Beach.

• The Bhilai hotel, the company’s first in Chhattisgarh, will offer 72 rooms along with banquet facilities, a restaurant, a swimming pool, and a spa, focusing on demand from industrial and business travelers.

• Both properties are strategically located for strong road and rail connectivity to major cities and transportation hubs, broadening the group’s accessibility.

• These signings reflect Lemon Tree Hotels’ asset-light strategy, enabling rapid portfolio expansion via management contracts instead of direct ownership.

• Lemon Tree Hotels now operates 120+ properties across 80+ cities in India and internationally, with a pipeline exceeding 120 upcoming hotels.

• The group’s expansion into tier-II cities aligns with a broader industry trend of moving beyond metro hubs to capture untapped demand in secondary and tertiary markets.

• Analysts see the company’s geographic diversification and asset-light approach as key to driving future revenue growth and market share.

• Shares of Lemon Tree Hotels Limited have demonstrated positive sentiment and resilience, with investors optimistic about the company’s ongoing growth and pipeline.

• Lemon Tree Hotels is increasingly viewed as a brand capable of reshaping the Indian hospitality sector, offering consistent mid-market experiences in both established and emerging cities.