Mahindra Holidays and Resorts is offering members more choice, whether in menus, location of resorts and type of holiday. It is also targeting younger, urban couples with short getaways.
It’s raining services
Of course, not all its potential subscribers will be equally prosperous. In order to expand its market, MHR offers an installment-payment plan as well; earlier, Citibank and HDFC Bank partnered the company for these initiatives, but now MHR handles it independently. The installment plan is also an additional revenue stream. Ramanathan explains that, internationally, time-share resorts earn up to 15 per cent of their revenues from financing schemes. “Most people here, too, prefer paying in EMI’s,” he adds. BCG’s Singhi, too, thinks the EMI option is a smart move, “Going ahead, this is what will drive MHR’s business.”
While that happens, MHR is offering value-added services to make it easier for subscribers to avail of its facilities: after all, it isn’t enough to bring in the customers; MHR needs them to visit the resorts and spend there as well. The company is launching a travel service to take care of members’ ticketing transport and even accommodation in case they need to stop over en route to the resort. Says Ramanathan, “We need to make sure people take their holidays, And unless we keep pushing people, occupancies tend to fall.” At present, occupancies are around 75 per cent, with the average holiday lasting 4.5 days.
Building top-of –mind awareness is, therefore, a priority. Apart from well-timed direct mailers—for instance, lawyers are sent mailers just before the court holidays—MHR also offers special events and promotions to entice members to take a break. The effort seems to be paying off. Over a fourth of members polled recently said the reminders helped them plan their holiday.
Next on the cards is a CRM initiative—Project Sunshine –planned for the Diwali season. The objective is to meaningfully predict customer requirement by mapping out their activities at the resort. Explains Ramanathan, “Without invading their privacy, we are trying to find out what guests would like. It could be something as simple as a harder bed.”
Giving guests is what they want also means anticipating their wishes. So MHR offers varied menus, changing them often to reflect guests’ tastes. For instance, stricter dietary norms are followed and more vegetarian dishes offered after Diwali, when the resort host groups of Jain guests.
Of course, customized choice is not restricted to the menu. MHR is tempting members and potential subscribers by offering variety in location and type if holiday as well. Apart from log huts and tents at some properties, it is also expanding in the next three years it will add another five resorts to the existing 20.
Besides, MHR now manages and rents properties over seas as well, in Thailand and Austria – the company’s arrangement with Resorts Condominium international (RCI) already allows members to stay at RCI’s hotels abroad.
Says Steve Borgie, who headed rival time-share company Sterling Resorts from 1996 to 2003, “There is a big shift in customers’ attitudes: they want new experiences continuously, So managements have to be on their toes.”
Better usages of its resorts will not just enhance MHR’s brand salience, believes the management. It will help bring in new customers through referrals. And growing the customer base is important because, as Borgie point out time-share resorts need build scale, apart from having a national foot print to survive. “Unfortunately, that is the way the business works; it is the bigger players that survive,” he observes.
Once they gain scale, how ever, it is less of a climb. Explains BCG’s Singhi, “The economics of time-share resorts tend to be better than those for hotels, because revenues are less volatile, In the US, time-share businesses have done better than hotels.” That should encourage MHR to keep going. With revenues growing at a compounded 50 per cent in the past three four years and net profits rising at even faster to hit Rs 41.76 crore in FY07, MHR’s growth is gaining momentum. But this holiday-maker simply cannot afford to take a break.