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The $700 million bet on Treebo and FabHotels

The two budget hotel chains have roared into contention over the last six months. And the duo believe that they can come out trumps in their segment

12/10/17

Patanjali Pahwa

The online hotel segment is set to grow to gross bookings worth $10.9 billion (about Rs 65,000 crore) by 2020

Typically, unorganised budget hotels run at 40% capacity. It, more or less, helps them break even

FabHotels earned Rs 20.9 crore ($3.2 million) from operations in FY16. But it gave up Rs 23.9 crore ($3.7 million) as part of its revenue share agreement with these hotels. Treebo had similar numbers

In this internet-led budget hotel chain business model, there is nothing to upsell or bundle. So there is a little room to make more money on the originally decided upon take rate

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Want to read a free 200 word summary?

Vaibhav Aggarwal, the founder and CEO of FabHotels, sits quietly in his cabin in Udyog Vihar, Gurugram. He has an unopened bottle of cold pressed juice sitting on his table and an uneaten apple lies forgotten on a chair leaning against a laptop bag.

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