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How Mahindra Holidays is bucking the trend in the travel and tourism industry?

Manu Kaushik     November 24, 2020

The coronavirus pandemic has affected a bunch of sectors over the past eight months. One of the worst-hit sectors is travel and tourism. It's estimated that the hospitality sector alone would incur losses of over Rs 90,000 crore in 2020.

Amid the gloom, the timeshare companies, particularly Mahindra Holidays & Resorts, seem to be doing well. When the overall hospitality sector occupancy rates are below 30 per cent, Mahindra Holidays claims to have occupancies of above 70 per cent. For instance, the company expects to close November with occupancy of about 75 per cent, higher than 62 per cent in October, and 30 per cent in September.

"Because we are in leisure destinations, our business has actually taken off. We are a family vacation brand. Our customers are fundamentally retail customers That's the best part of our 2,60,000 member base that we are not dependent on corporates, MICE (meetings, incentives, conferences and exhibitions), or weddings segments. On Diwali and weekends, we were sold out. December is looking good and we should cross 80 per cent (occupancies)," says Kavinder Singh, MD & CEO of Mahindra Holidays & Resorts India.

Within the hotel sector, the business segment has been badly hit as corporates have cut down on their travel, and even the SMEs (small and medium enterprises) and self-employed are planning their trips sans hotel stays.

But how is Mahindra Holidays managing to keep its occupancies high? Singh says that the reasons are primarily four-fold: the urge of people to go on holidays (especially in the drivable distance), the safety protocols followed at its resorts, the trust of its members with the 'Mahindra' brand, and a communications campaign called 'Travel with Confidence' started by the company to deal with the uncertainty around travelling during Covid times. For instance, if any of its members want to travel from point A to point B, they can find out Covid restrictions from Club Mahindra helpline. The members are also offered Covid insurance and travel insurance in addition to the sanitisation facility that's being made available through a group firm (Mahindra First Choice Wheels).

"At the resorts, all service interactions are contactless. We picked up the best protocols from facility management companies. We believe that we have been able to weather the storm in a resilient manner," he says.

The travel pattern has shifted during the pandemic where people are avoiding common transport systems like flights or trains. They prefer travelling in the bubble of their car where they feel more secure. So for instance, if prior to Covid, people would fly down from Mumbai to Chandigarh, and from Chandigarh, they would take a car and travel to Himachal Pradesh. That kind of travel has nearly diminished. The local travel - Delhi-to-Shimla or Chandigarh-to-Shimla - is picking up. Singh says that nearly 80 per cent of his properties are within the driving duration of 5-6 hours where at least 85-90 per cent of the members are travelling in their own cars.

That's not all! Mahindra Holidays is actually registering month-on-month growth in new membership signups, and is considering acquisitions of some resort properties to fulfil its previous-stated goal of reaching 5,000 rooms (up from 3,700 currently). That's because it's sitting on about Rs 800 crore of cash with zero debt in its books.

Interestingly, people are also opting for longer tenure memberships (25-year product called Club Mahindra Holidays) as against some of the shorter tenure products (Bliss for 10 years and GoZest for three years) that were launched by the company in recent years to meet the demand for travellers in different age groups.

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