Mahindra Holidays & Resorts India Notes
Mahindra Holidays boasts a widespread presence throughout India, with an extensive network of resorts in diverse destinations, including hill stations, beaches, backwaters, wildlife sanctuaries, forts, and heritage sites. Beyond India, the company has expanded into international destinations, such as Bangkok, Pattaya, Phuket, Bali, Kuala Lumpur, Singapore, Dubai, Colombo, Bhutan, Maldives, Vietnam, Cambodia, and Nepal.
With a substantial membership base of 2.8 lakh individuals and 143 resorts across India, Asia, Europe, and the USA, Mahindra Holidays stands as the largest vacation ownership company outside the USA. The company also offers its members access to a remarkable selection of over 4,300 RCI affiliate resorts worldwide, along with the chance to holiday at 388 partner hotels in India and abroad through its exclusive 'Horizons' holiday exchange program.
A significant aspect of Mahindra Holidays' strategy involves owning a substantial portion of the room inventory. In cases where resorts are under long-term lease arrangements, the company actively manages these resorts to ensure a consistent and exceptional experience for its members. Additionally, the company acquires inventory through short-term arrangements to explore new destinations and offer an even wider array of choices to its members. Looking ahead, Mahindra Holidays has ambitious plans to further expand its inventory, with a target of reaching 10,000 inventory units by FY30.
Membership
Mahindra Holidays & Resorts India Ltd. (MHRIL) vacation ownership memberships based Hospitality sector player.
The sale of membership is done in the following way
Sales
The distribution network was also expanded with the appointment of franchisees and direct sales agents (DSAs).
On-site sales channel at resort locations.
The company has put in place a new channel for corporates.
The member-to-room ratio is a key economic indicator for the company. Historically company had bit larger member ratio to the available rooms which had an impact on the company's review with its customers. In recent times company with constant inventory addition, the Member-to-room ratio has improved.
Traditionally companies use to sell long-term membership. In recent time company has introduced shorter time frame-based solutions to cater to different age groups. GoZest is introduced to attract young people who are in the age group <30 Years who want to try the experience and don’t want to commit for a long time period.
As of FY23, the company had a deferred revenue pool worth 5326 crore which provides steady revenue visibility for the vacation ownership fees going forward. Cashflow from upfront payment enables MHRIL to fund its growth capex requirements
Key membership products
Longterm Flagship Product
CM25 - membership valid for 25 years
CM15 - membership valid for 15 years
Short-term flexible points-based product
Bliss - membership valid for 10 years
GoZest - membership valid for 25 years
Historical numbers on rooms and inventoryMHRIL generates its income from three revenue streams
Vacation ownership (VO)The company recognizes the upfront membership fees on a straight-line basis over the tenure of the membership. The company has a Deferred Revenue pool of INR 5,083 cr as on 31st Mar 2022, providing visibility on future revenues and improved profitability with minimal incremental costs.
Annual subscription fees (ASF) are the annual charges collected from members and recognized as income on an accrual basis.
Resort income is the only variable revenue stream of the company as it depends on the room occupancy and willingness of members to spend on F&B and other hotel activities during their stay.