Treebo Hits ₹100 Cr Revenue in FY24 Despite Mounting Losses

Treebo Hotels, a leading premium-budget hotel chain, achieved a significant milestone by crossing the ₹100 crore revenue mark in FY24. The Bengaluru-based company reported a 22.5% growth in operational revenue, reaching ₹109 crore, up from ₹89 crore in FY23. The majority, 95%, of this revenue came from accommodation services, which saw a 22.3% increase, contributing ₹104 crore. The remaining income came from product sales and subscription services, while non-operating income added another ₹7.22 crore, bringing the total revenue to ₹116 crore for the fiscal year.

Despite this growth, Treebo’s losses climbed 16.7%, with total outstanding losses reaching ₹488 crore. The company’s advertising costs surged by 70%, hitting ₹17 crore, while commission expenses increased 48% to ₹43 crore. Employee benefits, accounting for 41% of overall expenditure, rose marginally by 7% to ₹59 crore. Additional expenses related to materials, technology, legal, travel, and other overheads drove total costs up 22% to ₹144 crore, compared to ₹118 crore in FY23.

On a unit level, Treebo spent ₹1.32 to earn a single rupee, reflecting ongoing challenges in achieving profitability. The company’s ROCE and EBITDA margins stood at -540% and -18.1%, respectively. As of the last fiscal, Treebo reported current assets of ₹34 crore, including cash and bank balances of ₹7 crore.

A decade-old startup, Treebo has raised ₹566 crore (approximately $70 million) in funding from prominent investors like Accor, Elevation Capital, Matrix Partners, and Bertelsmann. The most recent funding round of $16 million was completed in June 2021.

Treebo faces tough competition from Bloom Hotels and FabHotels. Bloom Hotels recorded an impressive 73.6% growth in FY24, with operational revenue reaching ₹250 crore and a profit of ₹14 crore. FabHotels reported ₹224 crore in operating revenue for FY23, with its FY24 numbers yet to be disclosed.

While Treebo’s revenue growth is noteworthy, the increase in expenses and mounting losses underscore the challenges it faces in the highly competitive budget hotel segment.