Lemon Tree Hotels Limited has informed the Exchange about General Updates-Conversion of Lemon Tree Hotel, Motihari, Bihar from Franchised Hotel to Managed Hotel.
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Lemon Tree Hotels has terminated its franchise agreement (dated January 25, 2024) for its 50-room hotel in Motihari, Bihar, by mutual consent. Simultaneously, the company has signed a new Hotel Operating Agreement & License Agreement to run the property. The hotel will now be directly managed by Carnation Hotels Private Limited, a wholly-owned subsidiary of Lemon Tree Hotels. The property includes amenities such as a restaurant, fitness center, banquet hall, swimming pool, spa, and bar. This is part of the company's ongoing strategy to shift certain properties from franchise to managed operations for greater control.
This shift from franchise to managed model gives Lemon Tree Hotels more direct operational control and potentially higher revenue share from this 50-room property. For shareholders, it reflects better margin capture on this asset, though the financial impact of a single 50-room hotel is relatively small.