No impact from Omicron, expect 80% occupancy in Q3, says Club Mahindra CEO

The jury is out on the Omicron variant’s real impact on individual health, but Kavinder Singh, Managing Director and CEO of Mahindra Holidays & Resorts India, which owns the brand Club Mahindra, doesn’t see much impact on the company’s business. 

“If this variant really spreads far and wide, then we could probably see some effect. However, our ability to ramp down and ramp up operations has been tested twice - once in the first wave, and second in the second wave,” says Singh. 

“We have been able to show our ability to withstand these shocks both in our performance as well as on ground. We should be above 80 per cent occupancy in Q3,” he adds.

 

Singh argues that his bullishness is based on the company’s “resilient” business model, “where members are able to book and cancel up to 48 hours before the stay. Because of this idea of being able to book and cancel without penalty, people have been booking and coming. Even in the April-June quarter, we grew our profits, but in July-September, we grew our profits by 20 per cent.” 

Mahindra Holidays’ revenues see equal contribution from India and from Finland, where it has 25 destinations, of which eight are full-fledged resorts, and the rest are timeshare destinations. The consolidated business had shown a loss last fiscal. “Last year while India gave bumper profit, Finland got hit because their business model is slightly different from ours,” says Singh. “They sell timeshare but they are selling fixed weeks, unlike us where we sell on a right-to-use basis.”

 

While business travel and hospitality segment has been badly affected by the pandemic, leisure tourism is seeing a revival. Singh predicts that domestic leisure tourism is not going to slow down, and will only rise. 

“People are getting more comfortable, particularly driving to nearby destinations where they can spend some time with their families in open air.” He points out that even in Club Mahindra resorts, the restaurants are running full. “In our resorts too, we see people eating in the restaurants. They could very well order in the room…activities that we never used to promote earlier like bird watching, treks, we are doing them today,” he says.

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