Treebo Hotels - Putting Dignity Back Into Budget Travel

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Indian hotel landscape was dominated by luxury five-star hotels for a very long time. There was a large vacuum in terms of quality accommodation between large five-star hotels and the way-side guest houses. The last one decade saw the rise of many budget and economy hotels in the country.  More than 80 per cent of the growth in new hotels were in the budget segment.

Staying at low-priced hotels has always meant making compromises on quality. One could book online but could hardly avoid the unwelcoming rooms and the indifferent service. Well, at Treebo, dignity is being put back into budget travel with their unmatched 100% quality guarantee.

Treebo Hotels is an Indian budget hotel chain that operates on franchising. As of January 2020, Treebo Hotel has over 600 hotels in 113 cities in India.

Treebo - Company Highlights

Treebo - About and How it Works?
Treebo - Logo and its Meaning
Treebo - Founder and History
Treebo - Mission
Treebo - Recent News
Treebo - Business Model
Treebo - Shareholding
Treebo - Revenue and Growth
Treebo - Products And Services
Treebo - Funding and Investors
Treebo - Partnership
Treebo - Acquisitions
Treebo - Competitors
Treebo - Challenges Faced
Treebo -Future Plans

Treebo - About and How it Works?

Founded in 2015, Treebo is a new age hotel brand offering comfortable stays at budget prices.

Treebo derives its name from “Bo Tree”, the fig tree under which Gautam Buddha attained enlightenment. The fig tree family - Banyan, Peepul among others - has inspired not just the company's name but also what they do. They aspire to emulate the vast reach of the fig trees.

Starting with Bangalore, they make sure that they are available to serve guests wherever their travels take them, with the same obsession for quality, with the same penchant for conversations.

Treebo - Logo and its Meaning

Treebo's new logo represents a pinwheel. It represents the colorful and childlike spirit of wonder that accompanies travel. Through its movement, it creates a sense of joy that puts a smile on everyone's face irrespective of age, occupation, and income.

Treebo - Founder and History

Treebo Hotels was founded in June 2015 as Zipotel by the IIT Roorkee graduates Sidharth Gupta, Rahul Chaudhary and Kadam Jeet Jain.

It’s been just over two years since the company’s founding, and Treebo is already India’s highest rated and third largest hotel brand in India (behind only Taj and ITC). While it’s still early days and there is a long way to go, the company is well on it’s path to create India’s largest and most loved hotel brand, leveraged by technology.

In July 2016, Treebo raised a $17 million round of investment. In August 2017, Treebo raised an additional investment round of $34 million. As of now, Treebo has raised $57 million and is backed by SAIF Partners and Matrix India Partners as investors. In May 2018, Treebo made its first acquisition of the online events discovery platform Events High.

In November 2018, Treebo launched three sub-brands (Trip, Trend, Tryst) as part of its new branding strategy. Treebo Trip Hotels offer basic comforts. Treebo Trend Hotels are the major chunk of properties. Treebo Tryst Hotels are the premium Treebo properties.

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Treebo - Mission

Treebo started with a simple question — how do you put dignity back into budget travel? The company’s mission is to answer this question - so every idea, every property they on-board, every hire, every strategic decision, every trade-off they make is put through this lens to see if it helps them answer this question a little better each day.

Treebo - Recent News

• Treebo Hotels raises Rs 10 crore from angel investors
• OYO Accused Of Listing Treebo Hotels Without Clearances

Treebo - Business Model

Treebo operates a full franchise model which means it takes on hotels exclusively, working with hotel owners to provide its branding, customer acquisition channels, management software and more. In exchange, it takes a revenue cut that can be as high as 40 percent.

While coming up with a sustainable solution, the founders were very clear that they were here to build a brand and not an aggregator or a marketplace or an OTA. And, this will take time.

“Our value proposition and business models didn’t shift even with hyper competition and the so-called lull that everyone was focused on. The number of properties working with us has increased by 100 percent. We have gone from 413 to 820 properties in a year," said Sidharth Gupta, co-founder of Treebo.

Treebo - Shareholding

• BCCL 5.58%
• Others 7.5%
• Sid Gupta  3.35%
• Bertelsman BV  12.64%
• Kadam Jeet Jain  3.65%
• Rahul Chaudhary 13.25%
• Matrix  19%
• SAIF Partners  19%
• WF Asian Recon 5.9%

Treebo - Revenue and Growth

Treebo reported revenue of INR 77 crore for financial year 2018-19, a 63% jump from the previous year, from INR 41.35 crore in 2018. It also generated INR 9.5 crore from the gain on sale of current investments, lease rental income, among others.

On January 19, 2023, Treebo Hotels announced that it had reached EBITDA break-even in December of the previous year 2022. According to the company, its adjusted EBITDA (adjusted for ESOP expenses) for the month was Rs 1.65 crore.
In the same month, the company reported achieving an annualized revenue runrate (ARR) of $82 million.

Some of the growth highlights of Treebo are:

• The average room rent of Treebo Hotels is 2100+ as of 2023.
• The company has 1,000+ corporate tie ups.
• Treebo has 100+ travel agent partners.
• As per company website it has 75%+ occupancy.

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Treebo - Products And Services

InstaConnect

In January 2018, Treebo Hotels announced the introduction of "InstaConnectWiFi," a technological innovation that enables visitors to over 50 Treebo locations to immediately connect to the hotel's Wi-Fi network.

Hero

On September 11, 2018, Treebo announced the debut of Hero, an offline-to-online software aimed toward intermediates such as cab and auto-rickshaw drivers, individual agents, small shops, and others who usually work at airports, train stations, and bus stands.

Treebo - Funding and Investors

Treebo Hotels has raised a total of $85M in funding over 10 rounds. Their latest funding was raised on June 30, 2021  from a Series D  Round.
Treebo Hotels is funded by 18 investors.

Treebo - Partnership

Radisson Hotel Group

Through the partnership with the parent business of Treebo Hotels, Ruptub Solutions Private Limited and the American global hospitality company Radisson Hotel Group in November, 2022  has introduced its new midscale brand, Park Inn & Suites by Radisson, specifically for India.

ixigo

One of the top travel marketplaces in India, ixigo, announced on September 14, 2018, a partnership with Treebo Hotels for the sale and distribution of Treebo's hotel inventory on ixigo's applications and website.

Dettol

Dettol declared its partnership with Treebo Hotels on January, 8, 2021 in order to promote safety and cleanliness when traveling throughout the country and raise awareness of the importance of out-of-home disinfection and safety . In addition to promoting frequent training for hotel workers, the partnership will guarantee the usage of Dettol products to improve the hotel's level of hygiene and disinfection.

Treebo - Acquisitions

Treebo Hotels has acquired Events High on May 31, 2018.

Treebo - Competitors

Treebo's top competitors include OYO Rooms, Yatra, Fabhotels, ClearTrip and MakeMyTrip.

Treebo - Challenges Faced

“We are building the Mc Donald’s of the hospitality industry, where until now the budget segment was only dominated by the standalone very similar to the F&B market back in the 90s,” said Sidharth Gupta, Co-Founder, Treebo Hotels.

According to Siddharth, only three things can have competitive advantage i.e., if one is in a network business if one is having proprietary assets and the execution DNA of the organization. “At Treebo we believe in ‘six months head start’ which means in a competitive market as such, we stay six months ahead,” he said.

In a traditional setup, where failure is always looked down upon, Treebo rewards the failure because “unless you don’t fail, you don’t learn,” believes Sidharth. “At Treebo we have two values, ‘obligation to invent’ and ‘display urgency’. Combining the both, we encourage our colleagues to try out an idea even if it gives 70 percent of surety,” he stated.

Today, Treebo has 7000+ keys, in 300+ properties across 50+ cities. Their benchmark Hotel and Guest NPS is consistently >60%. And the founders have done this while being capital efficient with a focus on profitable-growth with take rates between 20–25%.

That’s not to say, that they haven’t had their share of problems, with near death experiences on more than one occasion. But this has only strengthened the founders’ resolve.

Sidharth says, "There’s a lot to be done and several things yet to be improved. But it gives me great satisfaction that the entire Treebo team works relentlessly every day to answer one simple question - how do you put dignity back into budget travel?"

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Treebo - Future Plans

Treebo plans to double the number of hotels registered on its platform.

“The segment (homestay) has the potential to become large and exciting over the next two to three years. It’s very big in the markets outside India,” said Gupta, pointing out with India’s travel and accommodation market getting more professionalized with the technology, homestays are a natural progression in line with the global trend. The trend in India, however, may not be as linear as other markets and it may “leapfrog” a few stages.

Gupta said hotels would continue to be Treebo's core focus area and homestays would become large over a period of time. “We will launch some pilots by year-end. Like our hotels, the homestays, too, would be based on the premise of quality,” he said.

Treebo - FAQs

Who founded Treebo?

Treebo Hotels was founded in June 2015 as Zipotel by the IIT Roorkee graduates Sidharth Gupta, Rahul Chaudhary and Kadam Jeet Jain.

When was Treebo founded?

Treebo Hotels was founded in June 2015.

How does Treebo make money?

Treebo operates a full franchise model which means it takes on hotels exclusively, working with hotel owners to provide its branding, customer acquisition channels, management software and more. In exchange, it takes a revenue cut that can be as high as 40 percent.