Treebo Hotels targets 3-fold jump in portfolio

Treebo entered the mid-to-premium segment earlier this month with the launch of Treebo Select, which is primarily aimed at the corporate customer.

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Treebo expects to add 500 additional properties to its portfolio over the next one year.
NEW DELHI: Treebo Hotels, one of the largest budget hotel chains in the country, is targeting a threefold increase in its portfolio size as it enters newer segments, a strategy that could potentially drive its top line at a similar pace.

Treebo — which competes with the likes of SoftBank-backed OYO Rooms and Goldman Sachs-backed FabHotels — entered the mid-to-premium segment earlier this month with the launch of Treebo Select, which is primarily aimed at the corporate customer.

It plans to have 40-50 properties under the new umbrella over the next 12 months, said a top official at Bengaluru-based RupTub Solutions, which owns and operates the Treebo brand. RupTub cofounder Sidharth Gupta said the company’s big theme for 2018 is to drive a step change in what it does to improve customer experience. “One of the very concrete parts of that strategy is the launch of the midscale brand Treebo Select,” he told ET.


According to Gupta, Treebo expects to add 500 additional properties to its portfolio over the next one year. Currently it has about 350 properties. It is also exploring the option of managing some properties directly. “While we continue to work on the franchisee model as the core business model, we have also started managing properties ourselves,” Gupta said.

“It is happening at an experimental level right now, but we do intend to scale it up, where the entire operations of the property are run by us,” he added. He said going forward some of the Select properties might come under management model.

Treebo’s decision to focus on the corporate travel segment is in line with the strategy of its rival OYO, which launched mid-market offering OYO Townhouse last year. OYO also acquired service apartment chain Novascotia Boutique Homes earlier this week. The Ritesh Agarwal-led company had also entered the facilities management space through OYO Asset Management last year.

In terms of geographical expansion, Treebo is looking to enter 50-70 towns and cities, doubling its footprints. “It was a conscious decision to press the pedal a little harder this year,” Gupta said. “We hadn’t added a lot of properties in 2017, but 2018 is going to be different. Now we feel a lot more confident, given that our foundational capabilities are in place.”
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Gupta said the expansion plans are expected to add to its overall revenue. “We will grow two and a half times, in terms of scale, and my sense is that top-line will also grow three times, because we are including the take rates – the commission that we charge to the hotel owners,” he said.

For fiscal 2017, the company reported total revenues of Rs 20.56 crore and loss of Rs 73.47 crore, according to documents sourced from business intelligence platform Tofler.

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