‘Trying to ensure room and member additions are in sync’

One of the key beneficiaries of the government's big-bang FDI reforms is the travel and hospitality industry. Bloomberg TV caught up with Mahindra Holidays & Resorts India MD and CEO Kavinder Singh to get a sense of how the government policies are going to impact the hospitality industry.

The Cabinet on Wednesday gave post-facto approval to relaxation in FDI rules in 15 sectors, including real estate, travel and hospitality sectors. What’s your initial take on that?

As far as the foreign direct investment in the travel and tourism sector is concerned, you know that automatic FDI was there up to 51 per cent and 100 per cent under certain specific conditions. On Wednesday, what we have come to know is that the lock-in period has been removed — there was a three-year lock-in for the FDI . As far as we are concerned, we are a zero-debt company and we do not seek funds from the market for our growth plans. So, we do not see any impact on that for us at the moment.

What’s your business outlook for the near term? Run us through any expansion plans you might have to share with us right now?

We are currently engaged in five Greenfield projects — three of them are in Himachal Pradesh, one near Goa, and the other in Kerala. So, we are at this point of time trying to increase our room count from 2,800 to about 3,400 in the next two-and-a-half years with an investment of about ₹600 crore. Of course, we keep looking at opportunities.

Your room addition in Q2 was the lowest in six quarters. Why is that? How is your membership panning out?

As you know, room additions come bunched up together, because when once one project gets completed 50 rooms come in and when another project gets completed another 50 rooms come in. Last year, we added about 425 rooms, which is very good from our own internal standards. Coming to member additions, we are trying to ensure that the room additions are in line with the member additions. Fortunately for us, in Q2, we grew by 50 per cent and we are constantly having a programme to ensure that room and member additions are in sync.

With year-end holiday season coming, what’s your outlook on the demand?

We are seeing very healthy demand because our members plan holidays well in advance. We are seeing full occupancies in December and early January and even going ahead. The fact that the culture of holidaying has set in, where people plan for holidays in advance, has really helped our business and that is what we are seeing.

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