Mahindra Holidays is focusing on property acquisition: Kavinder Singh, MD & CEO

Kavinder Singh, MD & CEO, Mahindra Holidays & Resorts India Limited (MHRIL) talks about demand, business outlook and occupancy level at his resorts, deployment of cash that the company have at present among others during a candid chat with Swati Khandelwal, Zee Business. Edited Excerpts:

Q: Unlocking is happening and the economy has been opened up. What kind of response you are getting and are you seeing the response that you used to see in the holiday season?

A: I would just like to mention that as I have said earlier also that as unlock process started than we started opening our resorts from June. And by now, 60 of our resorts have been opened and 90% of our room inventories are operational. So, I would like to share the good news with you that we saw an occupancy of around 74% in the month of November, which is a big thing at such a time. As far as your question is about the pent-up demand then yes there is pent-up demand and people want to come out. And we are seeing that people are coming to our resorts after sanitizing their vehicles and are doing open activities in the open areas. Thus, it is very popular in which people want to go to open areas. So, we have seen a trend at driveable destinations as well as in open areas. We have also launched a campaign, ‘Drive with Confidence’ in which people can sanitize their vehicles, take insurance, and get their COVID-test done, so we have seen a lot of momentum in demand. As far as locations or a destination of the states is concerned, I have seen very good momentum in Goa, Maharashtra, Rajasthan, Himachal and Uttarakhand in November.

Q: What is the member base now and have you seen any cancellations and are those numbers are alarming and what are the plans to roll-out the membership? Your company has a cash of Rs 790 crore. What are the plans to deploy it?

A: As far as members are concerned, we have 2.60 lakh members and to them, we through our actions have shown the safety and hygiene measures that we have taken at our resorts. And ‘Travel with Confidence’ about which I was talking has helped us in making all the transactions contactless at our resorts. Moreover, in all the activities that we have, we are ensuring that the physical distance is maintained but the social distance is not required because people can connect with each other with 2-meter distance apart. Most importantly, the hygiene standard that has been launched is certified by Bureau Veritas, so we have COVID-safe protocol certification due to which our members have gone up. Interestingly, we have added 2,681 members in the second quarter and we have seen a good trend in October and November on member additions. I will be able to share the numbers after the quarter comes to an end. So, there is an increase in member additions and the existing members are holidaying, this is why our occupancy level reached up to 74%. As far as the trend of holidaying is concerned, it is positive.

You can make a domestic holiday at present, and it is also positive. People want to get out, so member additions and occupancy both are going positive for us. As far as cash about which you have told, then we have a very unique business model due to which we are zero debt even after being in the hospitality industry and we have cash of around Rs 800 crore at present. At the same time, I would like to inform you that we have receivables of around Rs 1,500-1,600 crore, which can be securitized. So, we have liquid cash of around Rs 2,000 crore. Right now, we are looking at cash deployment and are focusing on the acquisition of properties. We need properties due to an increase in the number of our members. So, we have a focus to acquire properties in Maharashtra’s eastern zone. We are also focusing on the good properties in the south and the Northern region as well as we are looking at the properties that are located at a driveable distance. So, the simple plan of deployment of the cash is that we want to add 1,200-1,500 room units in the next 3-4 years and we will require around Rs 1,000-1,200 crore for that purpose. By the time, this Rs 800-1,000 crore is deployed we will get another Rs 1,000 crore because our new members will continue to come to us.

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