Patu Keswani - Founder, Lemon Tree Hotels


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Patu Keswani - Founder, Lemon Tree Hotels

  2. 2. A bit about me ….The Corporate Professional The Entrepreneur Property of Lemon Tree Hotels Pvt. Ltd.
  3. 3. JRD Tata IIT - Delhi Rusi ModyIIM - Kolkata Ronnie Lobo TataAdministrative Services The Perfect Hotel Property of Lemon Tree Hotels Pvt. Ltd.
  4. 4. 1999: Three Friends, A bottle of scotch and a retirement plan Plan A: • Don’t haveBetting The catastrophic failures Bank • Failure is a step down in the ladder of success • The importance of plan B Property of Lemon Tree Hotels Pvt. Ltd.
  5. 5. Plan B : A.T. Kearney Timing and A Second Chance• The importance of Meritocracy and Incentivizing.• Why is risk taking important?
  6. 6. Boredom and the accidental evolution of Plan C : Retire as an Entrepreneur • Applying the ratios and creating the business model ( IDEA)2002 • Getting the right team ( TALENT) • Funding the hotel (CAPITAL) • The first Lemon Tree Hotel – Lemon Tree Udyog Vihar • Right price, Right product in the Right Market2004 • Validation of the business model • Asymmetric access to knowledge and excellent execution Property of Lemon Tree Hotels Pvt. Ltd.
  7. 7. The Idea -Talent -Capital Tripod and the advent of Private Equity 2006$ 200 Mn. 2008$ 500 Mn 2012$ 750 Mn Property of Lemon Tree Hotels Pvt. Ltd.
  8. 8. Hotel Openings: Aurangabad, Hotel Openings: Ahmadabad, City Centre Indore and North, Gurgaon Red Fox Hotels (3) and East Delhi Allepey Promoted APG Investment Kotak Realty Fund Warburg Pincus Hotel Openings: Lemon Tree Hotel and Shinsei Bank Investment New Delhi (2) Gurgaon (1) Investment Hotel Opening: Goa ’02 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘11 ‘12 Lemon Tree Hotel Openings:Hotels Promoted Pune and East Delhi Hotel Openings: Lemon Tree Hotel Opening: Bangalore (1) and Premier Brand City Centre, Jaipur Launch Gurgaon (2) Hotel Openings: Hyderabad (2), Bangalore (2) and Investment Chandigarh Hotel Opening Brand Launch Property of Lemon Tree Hotels Pvt. Ltd.
  9. 9. Where we are today….Presently:18 hotels and 1969rooms in 14 citieswith 2200employeesDecember 2014: 26 hotels and~3600 rooms in 16cities with 4000employees VISION 2020 20,000 Owned Rooms +20,000 Managed Rooms & 40, 000 Employees Property of Lemon Tree Hotels Pvt. Ltd.
  10. 10. Some recognition along the way…. National Award 2011, The NCPEDP – Shell Helen Ranked in the Top 50 FHRAI for the empowerment Keller Award, 2010 for Large Organizations, in Hall of of persons with exemplary policies, the 2012 study of the Fame, disabilities practices and belief in equal Best Companies to Work 2010 rights and gainful For by the Great Place to employment for persons Work Institute & the with disabilities Economic Times SATTE 2010 Republic of Awarded to Times Travel Honors, NCPEDP Mphasis“Best Mid-Market Noodles, Goa Lemon Tree 2011 Best Hotels – Universal Design Developer Winner 2010, 2011 Amarante Beach Resort Mid Range Award 2011 and 2012 (only 650 hotels out of 130,000 globally get this distinction) Property of Lemon Tree Hotels Pvt. Ltd.
  11. 11. … and a 50% plus year on year capacity growth driven by engaged employees who drive guest retention. Lemon Tree Employee Satisfaction Survey: Guest Overall Satisfaction Scores Overall Scores % 100% 94%100 90% 86% 88% 91% 90 80% 82% 80 70% 70 60 60% 50 50% 40 71 74 83 79 84 40% 30 30% 20 20% 10 10% 0 06-07 07-08 08-09 09-10 10-11 0% 07-08 08-09 09-10 10-11 11-12 Repeat Guest Percentage for inventory older that 1 year 2,000 40 38 1,750 35 35 1,500 31 30 29 1,250 25 22 1,000 20 18 750 1,478 15 1,393 500 10 857 Awarded to 15 out 250 218 273 682 5 of 18 operational 0 07-08 08-09 09-10 10-11 11-12 12-13 E 0 hotels in 2012. Repeat visitors % Count of rooms which have completed one or more years of operation
  12. 12. KEY LEARNINGGuests return ONLYbecause of engaged and happy employees… Property of Lemon Tree Hotels Pvt. Ltd.
  13. 13. We understand that anyone can build a superior product superior customer experience is impossible to duplicateIn India it is very easy for people toreplicate or develop a superior hotelproduct because: Therefore, to Attract,1. Hotels are often built by irrational Engage and investors with asymmetric access Retain customers – SUPERIOR SERVICE is to influence or capital the key differentiator.2. ROCE is never a concern, the biggest factor often is ROE – Return on Ego Property of Lemon Tree Hotels Pvt. Ltd.
  14. 14. Superior customer service comes only from the right talent …So we -Recruit for Attitude (Behavioral Competencies)AndTrain for Skill (Functional Competencies) The Lemon Tree Recruitment Matrix Competence = Attitude (or desire) + Experience (or knowledge) Key Competence: Interview Skills High Lemon Tree Hotels Lemon Tree Hotels (Current) (Desired) Attitude Low Low High Experience Key Competence: Skill Development and Wisdom Transfer
  15. 15. Right talent which is effectively engaged… Share the wealthIt is where Management devotes Create a happy and caring work time and resources that environment with unique practicesdetermines what is important and what is not to the organization Communicate effectively And this is how we show our Praise extensively and celebrateemployees that they are the most the small wins important factor in our success Mentor, coach and transfer wisdom at each step Property of Lemon Tree Hotels Pvt. Ltd.
  16. 16. Right talent which is effectively engaged in the correct role. The Lemon Tree Job Role Evaluation Matrix Quadrant 2 are key employees who are paid a premium over industry salaries for the roles they perform. Critical 1 2 Roles in quadrant 1 and 3 are whereCUSTOMERS compensation is typically in the 70th percentile of Industry standards. Non Critical 4 3 The aim is to move high potential employees from these quadrants to Non Critical Critical quadrant 2 BUSINESS Quadrant 4 job roles are paid minimum wage Property of Lemon Tree Hotels Pvt. Ltd.
  17. 17. KEY LEARNINGLeadership beginsand ends with how you manage People, Risk and Reputation Property of Lemon Tree Hotels Pvt. Ltd.
  18. 18. People (Culture)Risk Reputation Property of Lemon Tree Hotels Pvt. Ltd.
  19. 19. Our culture/ethos is based on one simple equation In a descending hierarchy, the equation is: (Happiness Axis) Happy Employees = Happy Customers = Happy Investors = Happy ManagementSo Lemon Tree Hotels has two sets of customers• Employees: Served by management• Guests: Served by employees Property of Lemon Tree Hotels Pvt. Ltd.
  20. 20. Creating a Virtuous Cycle of Happiness EMPLOYEESMANAGEMENT GUESTS INVESTORS Property of Lemon Tree Hotels Pvt. Ltd.
  21. 21. Business IS always about mitigating risk… Learn to Enjoy Risk Property of Lemon Tree Hotels Pvt. Ltd.
  22. 22. …. and managing reputation
  23. 23. Some dilemmas along the way ... Preserving theHigh growth + small companyHigh Attrition = culture in a large Doubling of corporateWorkforce each structure year Loyalty Re-inventing vs. roles in a fast Competency growth environment
  24. 24. ..and mistakes to be avoided.Invest in people and peoplerelated process FOR THE FUTURErather than for the presentNEVER use shortcuts forRecruitmentLearning and DevelopmentPerformance ManagementPromotionsRetentionCreate a system of wisdomtransfer from Day 1
  25. 25. In conclusion, Business IS NOT always about profits It is also about long term sustainability .. PEOPLEPLANET PROFITS Focus on the Triple Bottom Line – It is a key part of your culture Property of Lemon Tree Hotels Pvt. Ltd.
  26. 26. …and what you want to stand for INSPIRE EMPLOYER of CHOICE TRUST EXTENDING THE BRANDINDIAN SUSTAINABILITY Property of Lemon Tree Hotels Pvt. Ltd.
  27. 27. Thank You Property of Lemon Tree Hotels Pvt. Ltd.