Hot Seat

When life hands you a branch...

...you design a Lemon Tree. This chain of hotels has managed to fill the huge vacuum between the five-star segment and guesthouses in the country, and the driving force behind this is Patu Keswani, its chairman and managing director. By Dinkar Farwaha

Patu Keswani

The first thing that strikes you when you meet Patu Keswani is his flamboyance - but one that is tinged with a certain sense of humility. As you begin to talk to him, you slowly but surely witness a unique passion that is within him, a passion that drives this force.

But this passion was not always visible and obvious; it was settled deep within him under the layers of conditioning. After finishing his schooling from St Columbus, New Delhi, Keswani attended IIT Delhi to earn a BTech degree in Electrical Engineering, which he went on to combine it with an MBA from IIM Kolkata. "After my MBA, I worked in Tata Steel and some other Tata companies," Keswani reveals.

A career in hospitality was, therefore, something which he had never planned. But he always had a hidden ambition to be an entrepreneur one day. "It does not matter what discipline you come from. It's a passion for something that is really important to you. And I must admit that I had a passion for designing and developing hotels," he confesses. So when the opportunity to join Taj hotels came along, he gladly accepted it with both hands.

Keswani worked with the Taj group for almost 15 years and left the company as the COO of the Taj Business Hotels. "The time spent with Taj gave me huge exposure to get an insight into the industry and helped me compare the industry with its western counterpart," he says.

Birth of Lemon Tree

Being in the industry for more than a decade, Keswani witnessed the enormous gap between five-star hotels and guesthouses. He therefore decided to bridge the gap by visualising the concept of Lemon Tree. He designed a hotel on the small plot of land in Gurgaon that he had acquired, which would operate in the mid-market segment and be different from the other existing hotels in the country. This was in September 2002. Its first 50-room property was developed on the same plot within the next 12 months and opened in May 2004.

There was no looking back for Keswani after this. He developed another property in Gurgaon in May 2005. In August 2006, private equity firm Warburg Pincus and Kotak Mahindra realty fund acquired around 30 per cent of the company by investing Rs 310 crore. The company used the funds to further its growth. It developed properties in Goa (60 rooms) and Pune (125 rooms). It is now in the process of developing its upscale chain properties in 12 major cities (Delhi, Gurgaon, Ghaziabad, Chandigarh, Jaipur, Ahmedabad, Mumbai, Pune, Goa, Bangalore, Chennai and Hyderabad). On completion of this project, the company would have around 2,000 rooms across India.

"After setting up our first two properties, we discovered that our guests were coming from both the five-stars and the guesthouses. We found that a five-star guest expected the same services that they get in a five-star but at an affordable price and our upscale chain Lemon Tree Hotels was catering to their needs very well." A pause and he continues, "We also found that the guesthouse users were very price-sensitive and did not necessarily want all the services." This motivated Keswani to enter the economy segment by creating a new brand called Red Fox Hotels. The company is currently building Red Fox properties aggregating 400 rooms in Delhi, Jaipur and Hyderabad. It plans to open nine more in Chandigarh, Navi Mumbai, Coimbatore, Kolkata, Ranchi, Raipur, Nagpur, Bangalore and Mysore in the near future.

In a short span of time, the group has managed to carve a niche for itself in the mid-market and economy segments of the Indian hospitality sector. But while Keswani spends a lot of time re-working strategies, he loves spending time with wife Sharanita and kids Aditya and Nayana. Other than that, he likes reading books, The Art of War by Sun Tzu, written in 500 BC, being his favourite. So where would he see himself 10 years from now? "You never know what the future has in store. But one thing is for sure that I will always be involved with Lemon Tree and Red Fox," he concludes.