Breaks are back: Sterling Holiday Resorts sees demand picking up

Anand Kalyanaraman BL Research Bureau | Updated on November 12, 2020

Ramesh Ramanathan, Chairman and Managing Director, Sterling Holiday Resorts Ltd

As Covid situation eases further, there’s a surge of confidence in the hospitality industry, says CMD Ramesh Ramanathan

Ramesh Ramanathan, Chairman and Managing Director, Sterling Holiday Resorts Ltd, is a pioneer in the vacation ownership business (timeshare business) in India. In an interview with BusinessLine, Ramanathan talks about how the company’s business is recovering after the pandemic shock and the way forward. Excerpts:

How bad was the lockdown impact on Sterling Holiday Resorts? How are things now after the gradual unlocking?

The lockdown had shaken up many industries and the hospitality sector was no exception. We tried our best to utilise our resources, designed contingency plans and prepared the resorts to handle any Covid-19 related scenarios. We have a strong member base and our senior management reached out to every member to reassure them. This strategy worked and most members responded that they would like to take a holiday once the lockdowns were eased — communication is really the key during a fraught situation like this.

Once the lockdown began to ease across several States in the country, we saw a rise in people taking holidays. Most holidays were quick getaways to nearby resorts within driving distance. This has given a boost to the demand for holidays and as the Covid-19 situation eases up even more, the demand for holidays will witness an uptick. We are slowly but steadily witnessing a surge of confidence in the hospitality industry to host guests and travellers.

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With the economy not out of the woods yet, what could be the impact of customer spend on discretionary items such as vacation ownerships?

I don’t think we should look at holidays as something discretionary; taking a break is extremely important for our minds and bodies to rejuvenate and relax. For the past six months, people have been stuck in a sort of rut, managing household chores and their office work from their very often cramped homes in cities. Hence, while vacation ownership may not be the first thing on everyone’s mind, it is surely a desired item that will remain mostly untouched by inflation and economic disruption.

However, to counter the measured pick-up during such an economically fraught period, it is possible to tailor budget-friendly experiences and give members a chance to holiday multiple times in a year and add more value to their ownership with options to top up their plans.

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When do you expect a return to pre-Covid levels of operations and growth?

During the initial phase of the lockdown, we were expecting the industry to start recovering by July this year. However, the pandemic took a turn for the worse during the months of July and August, and recovery was thus pushed to September. Although we started witnessing tiny green shoots in July itself, lockdown restrictions and bans on interstate and intrastate travel kept the percentage of travellers low. We expect a full recovery to now happen by the first quarter of the next year (April to June 2021).

What changes has Sterling Holiday Resorts made to deal with the new normal?

We have developed Sterling CARES, our comprehensive hygiene and sanitation programme in association with Apollo Clinics and in line with the guidelines from the government and institutions such as the WHO, ICMR and FSSAI. Also, to ensure security for our guests’ holiday plans, we have introduced a complimentary holiday insurance policy.

We have rationalised the cost of our operations by moving our membership sales to digital presentations. As part of our long-term strategy, we have also been working on new resort expansion on an asset-lite model of management contracts.

We have launched new FIT (free independent travellers) products to cater to emerging trends such as ‘Sterling What-A-Trip’ with value back offers on holidays and ‘Sterling Playcations’ for customers who would like to work out of our resorts. We also offer ‘Sterling Weddings’ to leverage the increasing demand for destination weddings at nearby drive-to locations, especially due to the increased restrictions on wedding events in cities.

Then there’s Sterling Vantage — a flexible points-based 10-year membership programme — targeting millennials. We have also re-positioned Sterling Nature Trails, our adventure holiday resorts near Mumbai and Pune.

Are members reluctant to opt for their vacation weeks, given the continuing health scare?

Not at all. Even during the lockdown, when we had reached out to our members, more than 70 per cent had expressed their desire to go on a holiday the moment lockdown restrictions were eased. Now, with lockdowns easing all across the country, we have started seeing members opting for holidays in resorts that are close by and are within driving distance. We are also seeing members booking long-haul domestic holidays now because their confidence in the safety of air travel and our resorts is high.

Has the government done enough to help the sector? What are your expectations now?

Ever since the lockdown was announced in March, tourism at several lesser known destinations has been hit hard. But with the country slowly reopening now, we do expect a steady recovery. While we do not expect a full relaxation of norms to happen immediately, slowly increasing the capacity to host larger events will continue to boost travellers’ confidence levels and encourage them to travel.

Published on November 12, 2020

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