Question

Lemon Tree operates mid-premium hotels in India and position it for cost conscience corporate travelers. They have decided to enter European market now with 4 properties, two each in Germany & France. a. Suggest what should be their pricing strategy for the European market

Answer 1

Answer:

Pricing strategy of Lemon tree hotels

Explanation:

According to Thadani, currently, the Indian hotel industry has around 100,000 rooms which

includes 35,000 rooms in the branded segment (read star categories). Of these 35,000 rooms,

only 6,000 rooms are in the budget 3-star category. By 2025, around 60,000 rooms will be added

to the branded segment raising the number of rooms to 12,000 in the budget category. There will

therefore, be around 18,000 rooms in this (budget) category by 2025. He also estimates that

around 100 budget hotels in numerous tariff brackets are likely to come up in the next four years

in the branded segment.

Several international companies are entering the market and those that are already there in this

segment are either expanding or are atleast introducing their budget brands in the country.

Choice Hotels India, the master franchisee of Choice Hotels International, was perhaps the first

in this segment to make a foray way back in 1987 with Quality Inn and Comfort Inn, both

positioned as three-star. It plans to have 100 hotels by 2030.