Taking the Offbeat Track to Building a Great Brand

Lemon Tree Hotels chain’s “Senior Food Critic” and “Company Mascot” is Sparky—a dog.

“She adds to our brand—she’s fun, energetic,” says Patu Keswani, chairman and managing director of Lemon Tree’s holding company, Krism Hotels Pvt. Ltd, which runs four hotels in India’s midmarket rooms segment.

The slightly offbeat Keswani’s sense of whimsy doesn’t quite end at that.

Keswani wears the ponytail that all supervisory-level male Lemon Tree employees are mandated to have, though exceptions are made for the balding. Beneath the ponytail and the tie-less blazer look, however, is a businessman with strong knowledge of the hotel industry.

After getting an engineering degree from IIT-Delhi and a Post Graduate Diploma in Business Management from the Indian Institute of Management in Kolkata, Keswani has worked mostly in the hospitality industry.

From 1984 to 1999, he was with Indian Hotels Co. Ltd’s Taj Group of Hotels, eventually rising to the position of chief operating officer and senior vice-president. After leaving Indian Hotels, Keswani went on to become a director at consulting firm AT Kearney Inc.’s India office, before he decided to start the Lemon Tree chain.

Sitting in his office here, Keswani stops dragging on his cigarello for a moment and leans forward from behind his desk. On a clean piece of paper, he draws six circles, a few arrows and some numbers to explain, in less than five minutes, the current and future desires of hotel-goers in India. Indeed, almost immediately, it is easy to comprehend his focus and vision.

Such thinking has helped Keswani take the start-up Lemon Tree project, withRs3 crore investment in September 2002, and turn it into a company valued at about Rs790 crore by June 2006.

The following month, Warburg Pincus Llc. and Kotak Mahindra group together bought almost a 30% stake in Krism Hotels, investing about Rs250 crore.

“You had really only two small hotels to go by” in July 2006, said S. Sriniwasan, chief executive of Kotak Investment Advisors Ltd’s Realty Fund. But Keswani “knew the ins and outs of the hospitality business very well. He had mapped every aspect of the business.”

Keswani says Krism now has about 700 employees and expects 150% revenue growth in fiscal 2008 over the previous year. Keswani says he anticipates the Lemon Tree venture going public in 2011, with hotels operating in almost all of India’s major cities by 2009. “We are building 1,800 room,” says Keswani.

Keswani has also launched Spank Hotels Pvt. Ltd, the owner of the upcoming budget brand Red Fox.

The first three Red Fox hotels are scheduled to open in 2009 and, in total, the two chains will have with at least 4,500 employees by fiscal 2012, operating 18 hotels by then. Behind the hotel development is Keswani’s manic energy—he says he does his best work at night and rarely goes to sleep before 2:30am—that translates into an attention to detail. “If I have a dream, it’s not (about) making money; it’s building a great Indian brand,” he says.

The most important component of what Keswani is trying to impart to Lemon Tree might be the core service of the hospitality industry: taking care of people. Keswani says he considers himself “the chief people officer” of Lemon Tree Hotels. His work philosophy is “happy people equals happy customers equals happy shareholders equals happy management.”

Keswani shares his office with wife Sharanita. The pair live above one of Lemon Tree’s offices with their two children: Aditya, 16, and Nayana, 13. He also intends to take some of the money he makes through Lemon Tree and Red Fox to play a role in an NGO to address “coercive corruption,” which he refers to as a “canker in Indian society”.