Business Model of Treebo Hotels | How Does Treebo Hotels make money

Pratyusha Srivastava Pratyusha Srivastava
Jul 20, 2021 4 min read
Business Model of Treebo Hotels | How Does Treebo Hotels make money

Treebo Hotels are well known for their tremendous facilities and services for its customers. With the advancing hotel budget network in India, Treebo Hotels are quite high on the list, closing a total of $34 million series in the C round.

And it's estimated that by 2021, Treebo Hotels will lay in more profit than ever. Treebo Hotels are backed by some very prominent investors SAIF Partners and Matrix India Partners.

Treebo Hotels has experienced many ups and downs throughout the last four years which resulted in many lay-offs and fortunes plummet. Meanwhile, there was certain news in the market that Treebo Hotels are in acquisition deals with the Gurugram based Unicorn Oyo. That's why Treebo Hotels spent around one year building a strong upholding strategy for the market that could bring the company back to its previous status and more.

The strong deed that came out was reducing the cash burn and certain liabilities along with bold strategies for improving revenue sources. In this article, we have discussed the business model of Treebo Hotels, briefly. Let's get started!

About Treebo Hotels
Where does Treebo Hotels operate?
Key Services of Treebo Hotels
Target Audience of Treebo Hotels
Business Model of Treebo Hotels
What's Unique about the Business Model of Treebo Hotels?
How does Treebo Hotels make money?
FAQ

About Treebo Hotels

Treebo Hotels is a prominent digital hotel chain developed by IIT Roorkee graduates Sidharth Gupta, Rahul Chaudhary and Kadam Jeet Singh. Treebo Hotels aims for providing top-notch quality hospitality in a stated budget segment.

The company focuses on the budget hotel sector by opting for a new well-organized hotel and taking that under the Franchise of Treebo Hotels. These become an official part of Treebo Hotel chains.

The biggest competitors of Treebo Hotels are Oyo Rooms, ClearTrip, Fabhotels and MakeMyTrip.

Treebo Hotels entirely manage all the aspects of hotels through advanced technology and look for the best revenue management and enhance the quality. With the growing hospitality industry in India, the customers get total facilities and can easily book any hotel under Treebo Hotels or Oyo with a minimum charge of Rs. 3,000 to Rs. 5,000. This offers the customers total hostel facilities without any interceptions.

Where does Treebo Hotels operate?

Treebo Hotels is a major part of India's budget hotel chain that took over other hotels through Franchising.

With the latest data of 2020, Treebo Hotels has established its chain of hotels in over 113 cities with around 600 hotels across India.

Key Services of Treebo Hotels

It often becomes very tough in finding the right suitable hotel with fresh toiletries, clean rooms and affordable basic breakfast service. A middle-class always suffers in finding this at a reasonable price. And that's where Treebo Hotels comes in.

Treebo Hotels provide great customer services and manage the basic requirements of the customers at their convenience. It provides exclusive hotel choices at very reasonable prices and with covering all aspects of the requirements.

Target Audience of Treebo Hotels

Treebo Hotels compete with the biggest hotel services of Oyo Room and FabHotels. Oyo is backed by SoftBank while FabHotels is backed by Goldman Sachs and these hotel services are extensively popular.

On this note, Treebo Hotels in its mid-to-premium segment targets corporate customers and especially middle-class customers.

Business Model of Treebo Hotels

Treebo Hotels believes in branding rather than aggregating a marketplace. Their business model is franchise based. Treebo Hotels looks for the most suited hotel with good service and keeps up the standard of their brand. They communicate with the owners and offer great customer acquisition channels, branding, management software and many more.

It charges around 40% of total revenue per cent from each hotel, which is quite high.

Treebo Hotels works through the mid-segment hotel industry and for that, a strong complete business model which holds the operational capabilities has become quite a necessity.

Treebo Hotels is looking for all aspects that can be covered in order to build a strong market upholding. And in the upcoming years, it is expected to grow more extensively.

What's Unique about the Business Model of Treebo Hotels?

With most of the successful hotel services companies, look for a few hotels and sell them online. This makes them no different from MakeMyTrip or any other travelling company. However, Treebo Hotels offers the entire hotel services while covering all aspects of the requirements.

Customers often get upset or angry with the poor services by many hotels. But, Treebo Hotels offers great customer service and experiences.

Treebo Hotels is a Hotel Brand, not an aggregator and that's why it is known to be the largest budget hotel chain across India. Treebo Hotels offers different locations in different cities at some very reasonable prices.

Good hospitality is very necessary for greeting the customers. And India greetings are more important than anything. Treebo Hotels offers such hospitality in their hotels.

How does Treebo Hotels make money?

In the past few years, Treebo Hotels experienced some major losses up to Rs. 114. 94 crore. That's why from next year, 2018, Treebo Hotels increased its cash burn by 80 per cent and doubled the revenue growth. Treebo Hotels is now focusing on the immense profit deals by 2021.

Treebo Hotels operates the franchise model that's why its major source of revenue is the hotels that come under the Treebo brand.

In the last funding round of Treebo Hotels, it raised around $23 million which includes the $17 million series B.

Treebo Hotels charges around the range of INR 1,000-3,000 per night with the best facilities of clean linen, free WiFi, bedding and other things. The annual revenue of Treebo Hotels as of 2019 is USD 11.7 million.

Conclusion

In the hyper-competitive market, Treebo Hotels are building their strong upholding. However, it experienced a major loss in past years but now, with advancing technology and services Treebo Hotels are stabilising their position.

Developing a strong technical on-ground operation is very important in this sector to bring consistent experience for the customers. This is known as the capital intensive business which requires funding and great effort to establish. And Treebo Hotel is quite prominent among the members of India's rising budget hotel networks. Stay tuned for more updates!

FAQ

Who is the founder of Treebo?

Treebo Hotels is a budget hotel chain founded by Sidharth Gupta, Rahul Chaudhary, Kadam Jeet Jain in 2015.

What is the revenue of Treebo Hotels?

The estimated revenue of Treebo Hotels is $9.7 million as of 2020.

When was Treebo founded?

Treebo hotels was founded in 2015 by Sidharth Gupta, Rahul Chaudhary, Kadam Jeet Jain.

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