FabHotels IPO Approval and Budget Hotel Comparison

FabHotels has secured approval from SEBI for its initial public offering (IPO). As this budget hospitality chain prepares to enter the public marketplace, a comparison with other startup hotel chains like Treebo Hotels and Bloom Hotels sheds light on how these three companies measure up in areas such as size, profitability, and cost structure.

Revenue Insights Across the Budget Hotel Industry

In terms of operating revenue, FabHotels stands out with Rs 716 crore in FY25, significantly outperforming Bloom Hotels, which reported Rs 344 crore for the same period. Treebo Hotels remains the smallest player, earning Rs 128 crore last fiscal year. To clarify, both FabHotels and Treebo function within the budget hotel sector (Rs 1,000 to Rs 2,500), while Bloom Hotels, supported by Samena Capital, operates in the premium range (Rs 3,500 to Rs 10,000).

Expenditure Breakdown of the Three Chains

When assessing expenditures, Bloom Hotels exhibited the highest rent expenses at Rs 63 crore, indicating a more asset-heavy or leased property strategy. In comparison, FabHotels and Treebo Hotels incurred rent costs of Rs 3 crore and Rs 1 crore respectively, suggesting a primary emphasis on franchising and management models.

Employee Benefits and Commission Payouts

In employee benefits, FabHotels made a significant expenditure of Rs 96 crore, followed closely by Bloom Hotels at Rs 86 crore and Treebo at Rs 71 crore. Notably, Treebo reported the highest commission payouts, reaching Rs 39 crore, compared to FabHotels’ Rs 28 crore and Bloom’s Rs 21.5 crore.

Advertising Expenses Comparison

Advertising outlay varied across the companies, spanning from Rs 11 crore to Rs 28 crore. In summary, FabHotels incurred total expenses of Rs 730 crore, a substantial amount when compared to Bloom Hotels at Rs 337 crore and Treebo Hotels with expenses amounting to Rs 170 crore.

First Half Fiscal Year Performance (H1 FY26)

During the first half of the current fiscal year (H1 FY26), FabHotels reported operating revenue of Rs 400 crore, alongside net profits of Rs 32 crore for the six months ending September 2025. Despite leading in revenue, FabHotels faced a net loss of Rs 6.3 crore and an EBITDA loss of Rs 5 crore. Conversely, Treebo Hotels reported the greatest losses among the trio, with a net loss of Rs 36 crore and an EBITDA loss of Rs 35.2 crore. Bloom Hotels, on the other hand, emerged as the only profitable entity, achieving a net profit of Rs 15.2 crore and the highest EBITDA of Rs 61.5 crore, reflecting stronger operational effectiveness.

Cost Efficiency and Liquidity Metrics

Cost efficiency and liquidity indicators further illuminate the disparities between the three companies. Treebo Hotels reported an expense-to-operating revenue ratio of 1.33. FabHotels reported a ratio of 1.02, indicating its position is near breakeven, while Bloom Hotels maintain the most efficient ratio at 0.98.

Current Asset Overview

In liquidity terms, FabHotels showcased the highest current assets at Rs 191 crore, which includes Rs 95.5 crore in cash and bank balances. Bloom Hotels followed with current assets of Rs 119 crore, including Rs 29 crore in cash, while Treebo reported Rs 30 crore in current assets, with Rs 9 crore in cash and bank balances.

Guest Experience Across the Brands

After experiencing stays at all three hotel brands, it can be observed that Bloom delivers a consistently superior experience. This may be attributed to the company’s commitment to providing a uniform guest experience. Bloom claims a high rejection rate for property owners as a unique selling point on its website, which is noteworthy. Conversely, FabHotels and Treebo primarily focus on the budget segment. While FabHotels offers a broader selection of properties and locations, the overall guest experience tends to vary considerably. Each brand has its rationale for adopting its respective model; however, FabHotels is well positioned for growth, especially with its extensive network of over 1300 properties. Bloom will likely maintain a slight premium due to its reliable guest experience, while Treebo faces challenges due to losses and a model that limits promises of a premium guest experience.