Lemon Tree Hotels · tone and specificity signals across the available quarters.
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The majority of which were in Delhi, Hyderabad and Bangalore. And we shall continue to spend on renovation into FY27 until the entire portfolio of owned hotels has been fully renovated and refreshed. Once these incremental investments are done with over the next 15 months, the renovation and tech costs will also drop significantly down to about 2 to 2.25% of total revenue from 6% currently.
Nilendra has been in this specific area of branding franchising, he was earlier the senior vice president franchise globally for Adidas in Germany. He's run owned stores, he's run franchise stores, he has a very structured way of looking at managing scale. So if Lemon Tree is to scale up in an area which is currently totally unstructured, which is about 1.2 million rooms which are completely unbranded, we need somebody with that kind of a mindset and experience.
We have 2.1 million members already in the loyalty program. Our repeat usage is about 43-44%. So that's very encouraging for us because what it really means is that if you open a new hotel, we are very rapidly able to move customers there who are repeat members and make that hotel break even very quickly and that I think is an attractive proposition for any hotel owner from the asset light side.
Q1 sounds like everybody caught a little bit of a cold. Q2 is significantly better and July was great. Good recovery in July and August continues to be solid as well.
As long as the rate of growth of signings is significantly higher than the rate of growth of openings, it's a positive trajectory and a flywheel effect. You are going to see very clearly in the next two years in Lemon Tree.
We are not in an upcycle. The India occupancy is still mid-60s. An upcycle is defined when India occupancies cross 70-72%. At the rate of growth of our economy, I think we will be in an upcycle next year or the year following.
Lemon Tree is now reinventing itself as an asset-light player at scale. We did not feel we could do this split earlier. Lemon Tree had to demonstrate high growth in fee income for it to be an asset-light player in India because there is at present no asset-light player of scale in India in the hotel space.
The change in GST in this quarter accounted for 1.8% of revenue in a seasonally strong quarter of the year and we expect this to be 2% for the full year in FY27 and then further reduced to 1.7% in FY28.
We have grown about 23-24% [RevPAR] in 24 over 23, 20% in 25 over 24. In 26 we have shut a lot of rooms. So while we report on full inventory actually we had shut 1,200 rooms this year part of which is still shut by the way.
I don't think it's a cycle anymore. I really feel we are seeing early signs of a structural change in demand and a whole bunch of new customers especially post-COVID and these are younger customers who want to stay in branded hotels.