Mahindra Resorts recently acquired 95% stake in a Finland vacation ownership firm Holiday Club Resorts Oy.
The Indian tourism and hospitality industry has emerged as one of the key growth drivers among the services sector in India. Tourism is also potentially a large employment generator besides being a significant source of foreign exchange for the country. The tourism and hospitality sector’s direct contribution to GDP in 2016 was US$ 71.53 billion. Tourism in India has significant potential considering the rich cultural and historic heritage, bio-diversity and places of natural beauty spread across the country.
Yash Ved of NewsBarons connected with Kavinder Singh, MD & CEO of Mahindra Holidays who stated ‘We have Rs 600 crore worth of investment and added 600 rooms to our inventory’.
NB: What is the changing trend amongst Indian travellers?
Kavinder Singh: A short getaway is a trend that is here to stay. People also want to explore new places. As much as 83% of Indian travel and tourism is domestic, so we will keep investing in India. Of the 53 resorts, 48 are in the country, but we also want to ensure that we have an adequate network of options available outside the country. India’s outbound travel will accelerate, but family vacations and leisure holidaying will never go out of fashion.
What comes as a surprise is that millennials like to travel with extended families and friends and not alone. While Indian travellers want to explore lesser-known destinations, they expect basic amenities, which are going to be critical in these destinations. Liveable
NB: Tell us about your membership growth and business expansion plans?
Kavinder Singh: The member addition for Q2 FY18 is 3705 and the cumulative member base is at present is 225,635. Apart from that, we have a 240-room resort coming up in Goa at a cost of Rs 230 crore; a new project in Ashtamudi, which will add another 100 rooms at a cost of Rs 100 crore; in Naldehra, we have opened a 55-room resort and are adding another 60 rooms at a total cost of Rs 100 crore. So, we have Rs 600 crore worth of investment and three ongoing projects, which will add 600 rooms to our inventory. We are also planning to expand near Shimla.
We also have land banks and will consider starting construction of new resorts in the near future. We are also looking for acquisition opportunities in Sri Lanka, South East Asia, Western Europe and US, if we get appropriate inventory, either on lease or purchase.
NB: What are some of the new initiatives taken by Mahindra Holidays?
Kavinder Singh: Our new initiatives are divided across categories such as expansion of new properties, partnerships with other brands and innovations on the digital platform.
Last year, Mahindra invested in start-ups like XOXOday and are also partnering with international travel aggregators for cruises. In the new product category, we will be launching ‘Bliss’, a 10 year membership product designed for travellers above 50 years of age. In addition to this, our ‘Experience Zone’ programme gives members access to unique experiences even in their city of residence, all year round.
We have also introduced a mobile app last year and nearly 85% of our member bookings have originated through the web and app. In this way we are completely digitising this process.
NB: Brief us about your financials.
Kavinder Singh: On a standalone basis, our H1 FY’18 performance, the total income is at INR 528.7 crore as compared to INR 515.4 crore last year registering a growth of 2.6% and profit after tax at INR 64 crore compared to INR 63.1 crore last year, a growth of 1.5%.
NB: Do you expect an increase in outbound travel?
Kavinder Singh: India is the fastest growing outbound market, ranked next to China with a prediction to grow 50 million by 2020 as per the United Nations World Tourism Organisation (UNWTO).
Dubai, USA, Thailand, and Singapore are the top choices for Indian outbound tourists. A number of factors have contributed towards the growth of outbound Indian tourism and travel industry, the most prevalent being: An increase in GDP over 7%, growing air connectivity due to low-cost carriers (LCCs), an increase in the expanding urban middle class and growth of woman and senior travellers.
Not only is the market growing in volume and value but, following the introduction of more direct flights to key cities across the world, Indian travellers now venture further than ever before.
NB: What are your acquisition plans in US?
Kavinder Singh: We are constantly looking for acquisition of resorts both in India and overseas. We are assessing acquisition opportunities in the US as well; especially in our effort to make Mahindra Holidays portfolio more attractive to outbound Indian holiday makers.
Mahindra Resorts have acquired 95% stake in a Finland vacation ownership firm Holiday Club Resorts Oy. We are also present at international destinations including Malaysia, Thailand, Dubai, Austria and Singapore.
NB: Your growth target for FY18?
Kavinder Singh: The Y-o-Y growth in 2016-2017 is 14%. Last year too, we had a double-digit growth and we expect the trend to continue even in FY18.