Mahindra Holidays & Resorts India Limited (MHRIL) has announced a significant expansion into the luxury leisure hospitality sector, marking a strategic move to diversify its portfolio and capture a larger share of the growing tourism market.

Key Highlights

• MHRIL's Board approves entry into leisure hospitality as a new business line
• New venture to operate under the brand 'Mahindra Signature Resorts'
• Initial investment of approximately Rs 1000 crore planned for capex and business setup
• Target of 2,000 keys by FY30 for the new luxury brand
• Expansion of core vacation ownership business to 10,000 keys

Strategic Expansion

Mahindra Holidays, known for its vacation ownership segment, is set to broaden its horizons in the hospitality industry. The company plans to establish this new business line through its wholly-owned subsidiary, Mahindra Hotels and Residences India Limited, under the brand 'Mahindra Signature Resorts'.

Investment and Growth Targets

The company has outlined a growth strategy, allocating a substantial initial investment of approximately Rs 1000 crore towards capital expenditure and setting up the new business. This investment aims to achieve the following targets:

Enhanced Member Experience

As part of its transformation, MHRIL is also focusing on enhancing its core vacation ownership business. Key initiatives include:

• Accelerated inventory addition
• Launch of 'Keystone', a Privileged Access Program with premium benefits
• Premiumization of the resort portfolio
• Rebranding of Club Mahindra as 'Club M'

Market Positioning

The new 'Mahindra Signature Resorts' brand is positioned to cater to the luxury leisure market, targeting families seeking sophisticated and immersive experiences. This move is in response to the rising demand for experiential holidays driven by increasing affluence among Indian consumers.

Management's Perspective

Manoj Bhat, MD & CEO of Mahindra Holidays, commented on the strategic move: "For almost three decades, Mahindra Holidays has shaped how Indian families holiday, which gives us a competitive edge. The demand for experiential holidays is rising swiftly due to increasing affluence. We recognize that family extends beyond the traditional sense to encompass meaningful connections and shared experiences. Hence, we are embarking on our two-brand strategy, to gain a leadership position in the leisure market."

Conclusion

MHRIL's expansion into the luxury leisure hospitality sector represents a significant step in its growth strategy. By leveraging its existing expertise in the vacation ownership segment and venturing into the luxury market, the company aims to strengthen its position in India's evolving tourism landscape. The substantial investment and ambitious targets underscore MHRIL's commitment to becoming a leading player in the leisure hospitality industry.

Mahindra Holidays & Resorts India Limited (MHRIL) has delivered a robust performance in the second quarter, showcasing resilience in the face of weather-related challenges. The company reported significant growth in key financial metrics while maintaining a strong focus on expansion and member experience.

Financial Highlights

MHRIL's Q2 results demonstrate solid growth across key financial parameters:

The company's EBITDA margin improvement to 37.00% is particularly noteworthy, indicating enhanced operational efficiency.

Operational Performance

Despite facing weather-related challenges, MHRIL maintained a healthy occupancy rate of 73.40%. This is impressive considering the company lost an estimated 10,000 nights due to cancellations in the Himachal and Uttarakhand clusters. Resort revenue reached ₹84.00 crores, marking an 8% growth year-on-year.

Expansion and Inventory Optimization

MHRIL continues to execute its growth strategy:

• Added a new resort in Mahabaleshwar, Maharashtra
• Completed four expansion projects in Kandaghat, Dindi, Patkote, and Jaipur
• Added 209 keys while exiting 261 keys as part of quality optimization efforts
• Current inventory stands at 5,742 keys across 118 resorts

The company plans to add about 1,000 keys at the gross level in the second half, further improving room availability for members.

Member Additions and Sales Strategy

MHRIL's focus on selective customer acquisition is yielding results:

• Added 1,432 new members in Q2
• Average Unit Realization (AUR) surged by 85% to ₹9.30 lakhs
• 66% of sales now come through referrals and digital channels, up from 58% last year
• Member-to-room ratio improved to 53 from 55 in the same quarter last year

Future Outlook

Manoj Bhat, MD and CEO of MHRIL, reaffirmed the company's target of reaching 10,000 keys by FY30. The company is exploring capital-light models, with plans to have about 30% of future inventory coming from owned properties and 70% from leased or other capital-light models.

MHRIL is also working on strategic initiatives beyond the vacation ownership model, with announcements expected in the near future. The company continues to focus on enhancing member experiences, leveraging AI for inventory optimization, and improving operational efficiencies.

As Mahindra Holidays & Resorts India Limited navigates through the evolving travel and leisure landscape, its strong financial performance and strategic initiatives position it well for future growth in the Indian hospitality sector.