Mahindra Resorts to invest Rs 1,800 cr, to add 2,100 rooms in 5-6 years

Mahindra Holidays & Resorts, the only listed entity in the membership-driven holiday segment, will add 2,100 more rooms in the next five to six years with an investment of around Rs 1,800 crore, according to a top company official.

The company, better known as Club Mahindra, runs 119 properties, of which 74 are in the home market, 33 in Finland, Sweden and Spain being run under the banner of Holiday Club which it bought some years back. It also has 12 properties in the Middle East and South Asian markets. At present, the company has 4,900 keys inventory.

The company has a customer base -- all club members and most of them having 25-year memberships -- of 2.8 lakh as of December 2022. The membership fee is the biggest revenue stream for the company, which is a debt-free entity of the Mahindra group and had a cash pile of Rs 1,090 crore at the end of December.

"We'll be closing FY23 with 4,900 rooms across 119 properties, 60 per cent of them are owned properties and the rest leased. We'll be adding 600 more keys to take our inventory to 5,500 by FY25 and an additional 1,500 more rooms over the next three-four years from FY25, taking the total number of keys to 7,000.

"These inventory additions which will see a capex of around Rs 1,800 crore, will be besides the leased ones, which we haven't put a number yet," Kavinder Singh, the company's managing director & chief executive, told PTI in an interview.

Of the planned capex over the next five-six years, over Rs 750 crore worth work is already on for greenfield and brownfield projects. These include a new Rs 250 crore property in Ganapati Phule, Maharashtra, and expansion of existing properties in Pondicherry and Goa, Singh said.

Another business model the company is pursuing is public-private partnerships model with state governments, he said.

A beginning has already been made with the Himachal government recently wherein the company is running a 20-key boutique resort at Jhanjheli near Baddi.

"That apart, we've just signed an agreement with the Maharashtra tourism department to run a 100-key resort in Harihareshwar near Alibaug, which is off the eastern coast of the megapolis.

"Also, we've signed up for a 50 acre land parcel in Madhya Pradesh for a PPP project," Singh said,

Regarding owned properties, he said the key focus area for greenfield development will be the Konkan coast across Maharashtra and Karnataka.

Going forward, Singh said new properties will come up on the Konkan coast apart from the Gujarat, Andhra, Odisha and Bengal coasts and also Delhi-NCR.

The initial list of identified locations include a few coastal cities in Gujarat and Karnataka and Vizag in Andhra, and Konark and Puri in Odisha, he said.

For the first three quarters of this fiscal, the company reported a standalone income of Rs 969 crore, which was up over 26 per cent on-year, from which it earned a net income of Rs 127.3 crore.

Of the total income, resort income (from food & beverages and other activity fees) jumped 79 per cent to Rs 243 crore, and the rest came from membership fees and interest on installment based membership fees, he said.