Mahindra Holidays looks to take on titans with new resort venture

Plans to launch a new resort brand to tap into the growing number of travellers in the country

Mahindra Holidays & Resorts India, the country’s largest timeshare company, is planning to launch a new resort brand to tap into the growing number of travellers in the country.

The new resort brand, which will be launched shortly, will compete with established chains by selling rooms on a per-night basis.

The company aims to double its room inventory to 10,000 rooms by 2030.

“We are planning to launch the new resort brand with properties next to our existing resorts. The new resort brand would help us showcase our properties to new customers and facilitate on-site sales to acquire new timeshare members,” said Arun Nanda, chairman of the company, in an exclusive interview.

“We have identified and are acquiring land near the existing sites, and our future sites will have space for both verticals,” Nanda added.

Mahindra Holidays opened its first timeshare resort in 1998 and has grown to become the market leader in the vacation ownership business with over 280,000 members in India and a market valuation of Rs 7,000 crore as of Tuesday.

“Together with our Finnish subsidiary, Holidays Club Resorts (HCR), we have over 340,000 members and provide them access to 135 resorts in India, Asia, Europe, and the US, making us the largest vacation ownership company outside of the US,” said Nanda, who is credited with the success of Mahindra Group’s real estate and resort arms.

The company is in the middle of investing Rs 800 crore to expand the existing resorts chain. It will add 185 keys to make a 257-keys flagship resort in Kandaghat, Himachal Pradesh (HP), add another 44 keys to make a 244-room resort in Goa, and add 62 keys to make a 187-key resort in Puducherry.

The company is also setting up greenfield projects in Theog, near Kufri (HP), and Ganpatipule (Maharashtra). It is also setting up public-private partnership projects with local governments in Janjehli (HP), Harihareshwar (Maharashtra), and Chilika Lake (Odisha).

“We have potential targets for acquisition in Maharashtra and Karnataka,” Nanda said. The company is also looking to Sri Lanka to set up new resorts.

Mahindra Holidays, which currently has zero debt and owns the majority of its resorts, reported a 20 per cent higher total income of Rs 2,624 crore and earnings before interest, tax, depreciation, and amortisation of Rs 579 crore, and saw its net profit grow 54 per cent to Rs 171 crore.

“After the pandemic, our resorts are reporting extended stays of members due to the work-from-home policy, and customers are willing to spend more on travel. The upgrades in the last financial year were 71 per cent higher than the previous year — showing customers’ confidence in our services,” said Nanda, who retires from the board after 26 years.

The occupancy rate in 2022-23 was at 84 per cent, leading to higher sales of food and beverages and other services like spa, Nanda said.

Talking about the company’s international business, Nanda said the Finnish subsidiary — HCR — has paid back long-term debt of approximately €35 million, significantly improving the networth of the company since acquisition.

“The company will be debt-free by 2024-25 and free of all debt covenants, giving us an opportunity to consider aggressive timeshare construction in sales,” Nanda, who plans to spend his post-retirement time in social activities, said.