Lemon Tree Hotels lifts managed network revenue share to 41%

Lemon Tree Hotels increased managed and franchised hotel network revenue 35% year on year to Rs 236 crore in the second quarter of financial year 2027 (Q2 FY27), raising this portfolio’s share of total network revenue to 41% from 37% in Q2 FY26. Total network revenue rose 23% to Rs 573 crore.

How did Lemon Tree Hotels’ managed and franchised revenue change in Q2 FY27?

Lemon Tree Hotels’ managed and franchised hotels generated Rs 236 crore of network revenue in Q2 FY27, up Rs 61 crore from Rs 174 crore a year earlier. That 35% increase exceeded the 15% rise in owned-hotel network revenue, which increased by Rs 45 crore to Rs 337 crore.

The differing growth rates changed the revenue mix. Managed and franchised hotels accounted for 41% of Rs 573 crore in total network revenue in Q2 FY27, compared with 37% of Rs 467 crore in Q2 FY26. Owned hotels consequently represented 59% of network revenue, down from 63%, despite an increase in their revenue in absolute rupee terms.

The presentation defines managed and franchised hotel network revenue as excluding fees from those hotels. The Rs 236 crore figure therefore measures hotel revenue across that network, while management and franchise fees earned by Lemon Tree Hotels are reported separately. Total network revenue increased by Rs 106 crore between the two Q2 periods.

Did Lemon Tree Hotels sustain managed and franchised growth in H1 FY27?

Lemon Tree Hotels sustained faster managed and franchised growth in the first half of financial year 2027 (H1 FY27), with network revenue increasing 32% year on year to Rs 492 crore. Owned-hotel network revenue rose 11% to Rs 657 crore, so managed and franchised hotels again expanded faster than owned hotels.

Managed and franchised hotels contributed 43% of Rs 1,149 crore in total network revenue in H1 FY27, up from 39% of Rs 965 crore in H1 FY26. Owned hotels represented 57%, compared with 61% a year earlier, reflecting a four-percentage-point change in each portfolio’s revenue share.

In absolute terms, managed and franchised network revenue added Rs 120 crore in H1 FY27, versus a Rs 64 crore increase from owned hotels. Total network revenue grew by Rs 184 crore, or 19%, meaning managed and franchised hotels accounted for about two-thirds of the reported increase based on those segment additions.

What happened to Lemon Tree Hotels’ management and franchise fees?

Lemon Tree Hotels reported total management fees of Rs 40.8 crore in Q2 FY27, up 19% from Rs 34.3 crore in Q2 FY26. Management and franchise fees from third-party-owned hotels increased 30% to Rs 18.7 crore, while management fees from Fleur Hotels increased 11% to Rs 22.1 crore.

Third-party-owned hotels were the faster-growing fee stream during the quarter, increasing by Rs 4.4 crore compared with a Rs 2.2 crore increase in fees from Fleur Hotels. Fleur Hotels remained the larger reported fee category in Q2 FY27, at Rs 22.1 crore versus Rs 18.7 crore from third-party-owned hotels. Total management fees increased by Rs 6.5 crore.

For H1 FY27, total management fees rose 20% to Rs 86.1 crore from Rs 71.6 crore. Management and franchise fees from third-party-owned hotels increased 36% to Rs 41.5 crore, while fees from Fleur Hotels grew 8% to Rs 44.7 crore. Fleur Hotels generated Rs 3.2 crore more in fees than third-party-owned hotels during the half year.

What managed and franchised expansion activity did Lemon Tree Hotels report?

Lemon Tree Hotels signed 11 managed and franchised hotel contracts comprising 825 rooms in Q2 FY27. The signings included a 120-room Lemon Tree Hotel in Siddharthanagar, Lumbini Province, and a 110-room Lemon Tree Premier in Visakhapatnam, Andhra Pradesh, alongside properties in Bihar, Himachal Pradesh, Madhya Pradesh, Assam and Telangana.

Lemon Tree Hotels also opened eight managed and franchised hotels with 523 rooms during Q2 FY27. The openings ranged from the 33-room Keys Lite by Lemon Tree Hotels, Moga, to the 94-room Lemon Tree Premier, Vadodara, and included an 85-room Lemon Tree Hotel, Bharuch, and a 71-room Lemon Tree Resort, Nashik.

Signings exceeded openings by three hotels and 302 rooms in the quarter. The 825 signed rooms represent contracted future additions, whereas the 523 rooms opened were added to the operating managed and franchised network during Q2 FY27. The presentation does not provide opening dates or expected revenue contributions for the signed rooms.

How did Lemon Tree Hotels’ broader Q2 FY27 operations compare?

Lemon Tree Hotels reported consolidated revenue from operations of Rs 361.4 crore in Q2 FY27, up 18% from Rs 306.3 crore in Q2 FY26. Consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) rose 22% to Rs 162.2 crore, while EBITDA margin increased by 157 basis points to 44.6%.

The consolidated figures show gross average room rate (ARR) rising 8% year on year to Rs 6,751 in Q2 FY27 and occupancy increasing 633 basis points to 76.1%. Revenue per available room (RevPAR) rose 18% to Rs 5,137. These operating measures are not reported separately for managed and franchised hotels.

Lemon Tree Hotels’ total expenses were 55.4% of total revenue in Q2 FY27, down 157 basis points from 57.0% in Q2 FY26. The presentation says Q2 FY27 expenses included a stock appreciation rights provision equal to 0.8% of total revenue and a goods and services tax impact equal to 2.4% of total revenue.

Conclusion

Lemon Tree Hotels’ Q2 FY27 figures show managed and franchised hotels growing faster than owned hotels in both network revenue and the reported third-party fee stream. Managed and franchised network revenue rose 35% to Rs 236 crore and reached 41% of total network revenue, while management and franchise fees from third-party-owned hotels increased 30% to Rs 18.7 crore.

The next disclosed expansion measure is conversion of Q2 FY27 contracts into operating hotels. Lemon Tree Hotels signed 11 contracts covering 825 rooms and opened eight hotels with 523 rooms; future presentations may show the timing of those openings, further movement in managed and franchised network revenue, and changes in the mix of third-party and Fleur Hotels fees.