• Asset-light expansion: Lemon Tree is targeting 200 Indian cities with populations of half a million or more, having signed approximately 4,900 rooms last year to increase its inventory base by 30%.
• Fleur corporate restructuring: Warburg has bought out APG and will invest an additional $100 million before Fleur is listed as an independent asset-owning company in the next 12 months, supported by about 1,300 crore rupees in equity deployment.
• Target return yields: The company targets a stable EBITDA yield of 17% to 18% pre-fees (14% to 15% post-fees) on hotel developments, and requires a minimum yield of 12% to 13% on hotel acquisitions.
• Pricing and occupancy: Following demand softness starting in late March, the company expects mid-to-high single-digit growth and is prioritizing maximizing occupancy over aggressive average room rate increases.
• EBITDA margin defense: Management does not anticipate significant margin erosion despite cost inflation, utilizing internal cost controls and working to price more rooms above 7,500 rupees to neutralize past GST input tax credit changes.