“We have a two-step strategy to grow. First, we want to increase our total asset ownership and second, we are setting up a management company to manage assets of other hotel owners,” said Rahul Pandit, president and chief operating officer of Lemon Tree Hotels.

The company owns and operates 18 mid-scale hotels in the country with a total capacity of 1,970 rooms. It had entered into a joint venture with Warburg Pincus last April to launch a housing project with an investment of Rs.1,400 crore as per a report in Mint by Moulishree Srivastava.

“The management company will be a separate entity under a new brand, which will manage the assets of deluxe and upscale properties, primarily to attain bigger channel distribution and expand the company’s reach nationally,” said Pandit.

Pasu Keswani, chairman of Lemon Tree Hotels, is in talks with investors for raising funds, Pandit said. He expects to set up the management company by May.

The management route is an easy way to grow fast, say analysts. “Hospitality firms will have to plant as many flags as possible if they want to grow. It doesn’t happen if you only own hotels, as it will take huge investments if a firm wants to expand,” said a Delhi-based analyst who did not want to be named. “These firms will have to take management opportunities for growth, which will get them market traction at low cost.”