We Are Not A Quarter-To-Quarter Co: Kavinder Singh, MD & CEO, Mahindra Holidays & Resorts India

On the long-term commitment model and consequent growth…

Our business model has allowed us to be a zero debt company. We gained significant momentum in the last seven years when we almost doubled our room count from 2,000 to 4,000-plus. We also moved up our member count to 2,50,000 members. Even during the pandemic, we grew our cash on hand from Rs 781 crore to Rs 940 crore. This is an amazing feat because companies struggled in this period globally. We have no peer in the world that has this business model. Unlike other businesses that are around room rates, our model is driven by experience and magical moments, given the long-term commitment that is involved. For us, engaging the family is central to our business.
 
On why brand Mahindra was crucial to the model…

We began this business 25 years ago, on September 20, 1996, to be precise. At some point in the early days, the idea to create a business that served the needs for family vacations took shape. Vacation is about experience; people don’t want to stay cooped up in a hotel or just do sightseeing, they want to do more. Our model needs members to sign up for long periods but why would anyone pay in advance, in this case, 25 years in advance. To put this in perspective, whatever we are selling today in 2021, we are committing to give the family great vacations till 2046. Not many businesses commit beyond a year or two warranty. This was only possible if the company enjoyed timeless trust. Brand Mahindra, hence, for this model to work.

The other crucial aspect was the long-term sustainability of the business. The business model had to be designed such that it could withstand the ups and downs of business cycles.  This is where we looked to build additional income streams within this model. This acts as a hedge to the ups and downs. We are, therefore, in a position today, where despite the hurdles, we not only delivered profits but also increased our cash.
 
On recovery post-pandemic…

The recovery becomes even more pronounced if you have to look at it quarter-on-quarter. In the last quarter, we clocked 85 per cent without vaccine rollout. This meant we were able to inspire trust and confidence. We could do this due to various initiatives we undertook like creating a Safe Stay programme with contactless transactions, the best disinfection protocols and so on. We created physically distant but socially connected activities, travel with confidence program and other new concepts.

We added to our international business where we already have a robust presence in several markets. We acquired Holiday Club Resorts, which is the largest timeshare player in Europe, based out of Finland, and we climbed up to 79 resorts in March 2021. We added nine resorts even during the pandemic. We grew not just in terms of profits but more importantly, by living our purpose.
 
On living with purpose…

We have spent time and energy in making our presence blend in harmony with nature while doing work with micro-communities and creating sustainable livelihoods for them. This is in line with our purpose ‘Rise’. We are probably the only hospitality player that has signed all commitments related to the environment, renewable energy and being water positive, among others. Much of our initiatives have also been acknowledged on various platforms.

We have created value for our shareholders and investors. Mahindra invested Rs 18 crore when the business started. Today, we are at a market cap of Rs 4,500 crore and we are a self-sustaining business from a financial standpoint. If you look at all our stakeholders, whether it is our customers, investors, environment, or our people, it has been a steep climb upwards for us on all metrics.
 
On what kept the company going…

This journey is possible only if you keep an eye on the long-term because we are committing and engaging our members for the long term; we are not a quarter-to-quarter company. We are very confident that leisure tourism and domestic leisure per se will boom in India, in the times ahead. We keep growing our business model, creating new destinations. Today, on the back of consistent growth, we are the largest leisure hospitality player in the country and the largest vacation ownership company in the world in terms of the number of members if you exclude America.
 
On investments ahead…

In our business, there are three fundamental things that we should do all the time. Make the customer experience such that every moment is magical. From the time that a consumer wants to book a trip until they leave the resort, there are a million things that can go right or go wrong. In line with our business philosophy, our focus is on how we can ensure those millions of moments of truth give delight. The second is whether we are doing this well. We are a business of referrals and more people may want to become our members. We need to keep adding capacity. The third point connects back to this, which is to keep adding members to ensure that this capacity gets utilised well for a sustainable business.

In our way forward, we want to create marquee resorts, build on our ethos, and in line with that, we want to add 1,500-odd room units. We are looking to build capacity through acquisition, by building own resorts or by leasing. In terms of investment, the ballpark number is Rs 1,000-1,200 crore but as time goes by, we may even accelerate it. However, our confidence in our business model has only grown with time. We are a pure-play family vacation provider and that is what works in our favour. This is what we will continue to build on.