Companies

‘Timeshare is insulated against effects of slowdown’

Nivedita Ganguly Mumbai | Updated on September 06, 2013 Published on September 06, 2013

Rajiv Sawhney, MD and CEO, Mahindra Holidays — Paul Noronha

Our expansion will be governed by accessibility and development of new airports.

Mahindra Holidays and Resorts India Ltd has established its presence in timeshare sector, with its ‘Club Mahindra’ brand. Over the past five years, the company has expanded its room inventory 20 per cent to 2,480 and has a membership base of 1.60 lakh. Rajiv Sawhney, MD and CEO, spoke to Business Line about the company’s future plans. Excerpts:

What is your expansion strategy for the year ahead? Which are the new regions you are looking at?

We want to reach a total room inventory of 3,500 by March 2015. We are right now absent in Eastern India, barring two places in Sikkim. We want to strengthen our presence in this region and expand in the North-East, in places like Shillong and Kaziranga and the hills of Bengal. We are also looking to expand in Himachal Pradesh, Uttarakhand and Goa.

We have expanded our presence in Kerala, where we have six properties now, from just three a year ago. In Goa, we have a total of nearly 350 rooms. Goa and Kerala continue to be the strong regions for us and we will explore opportunities to expand further in these regions.

In India, our expansion will be governed by accessibility and development of new airports. We recently opened our first property in Jaisalmer following the development of an airport there. We are also looking at acquiring land near Pantnagar in Uttarakhand, where an airport is present.

In the international space, where are you looking to expand your footprints?

Low-cost carriers have made the neighbouring countries more accessible from India.

We have acquired a property each in Bangkok and Dubai. Sri Lanka is the next destination.

This will be a place close to Colombo and we hope to be there in less than a year’s time. We are also looking at Malaysia as our next focus, as well as Pattaya in Thailand.

At a time when margin pressures continue to impact the hospitality industry, have you tweaked your strategy to remain profitable?

Our business operates at two levels. One is acquisition of properties and signing up of new members and the second is the timeshare usage.

The usage goes up in times like these, as this is a cashless scheme. The members purchase the vacation years in advance, which makes the timeshare industry insulated against immediate slowdown effects.

Also, our clientele is different. We are totally focused on family products and cater to a clientele who have an annual income of Rs 15 to 20 lakh per annum.

But the penetration is very low. The country has just about 3 lakh timeshare members. Our model is different compared to the hotel industry. In our business, we utilise the membership fee for our expansion and growth.

We will be able to remain debt free unless we accelerate expansion very aggressively. But operating costs have gone up in the past few years.

Why did you discontinue ‘Zest’, your shorter duration product?

We discontinued ‘Zest’ seven months ago. The product was for youngsters. To create two ecosystems — one for the youth and the other for the family — was doubling the effort. It was not working out for us.

>nivedita.ganguly@thehindu.co.in

Published on September 06, 2013
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