I am happy to share my thoughts with you as your Company completes twenty successful years. During the two decades, your Company''s flagship brand - Club Mahindra Holidays (CMH) — has assured customers of consistently high quality and memorable family experiences. It has always lived by the credo: ''Make Every Moment Magical'' for its vacation ownership members and guests. I really feel proud of the fact that your Company has been able to create a culture of regular vacationing amongst our members.
Mahindra Holidays during its 20 year journey has created a reputation for:
- Spotting hitherto unexplored destinations and creating marquee resorts.
- Managing these fully serviced resorts, often in relatively remote destinations, with high standards of service.
- Creating the largest direct sales force network in the hospitality industry within India.
In its 20th year, your Company is proud to have 2.18 lakh members who have a choice to avail holidays across 49 picturesque resorts in hill stations, on beaches, by backwaters, close to wildlife sanctuaries and near forts and heritage destinations. Your Company provides flexibility to its vacation ownership members in choosing the time of their holiday and type of accommodation across growing number of resort locations. It also strives to deliver a complete family experience that caters to the varying needs of all members of the family, from children, young adults to parents to grandparents. Many a times, I have seen four generations holidaying together. Where else is that possible? - It happens Only At Club Mahindra.
When I first wrote to you after your Company''s IPO in 2009-10, we had 1.10 lakh Club Mahindra members. By 2016-17, the membership base has almost doubled to 2.18 lakh. Digital leads and referrals from existing members account for approximately 50 per cent of sales clearly showing “Club Mahindra has been able to generate the required “pull for its core proposition.
There has been a very healthy increase in the room inventory across the various resorts. In 2009-10, your Company had around 1500 rooms. This has doubled to 3000 rooms at the end of 2016-17, making your Company the largest leisure hospitality player in India.
Your Company can proudly claim that it has created many new holiday destinations across India. Two decades ago, places like Binsar, Naukuchiatal, Kandaghat, Munnar, Madikeri, Virajpet, Varca, Ashtamudi, Thekkady, Kanha and Kumbhalgarh were not on the family tourism map. Today, these are well known tourist destinations, thanks to Mahindra Holidays. By creating comfortable eco-friendly resorts in these areas, your Company has not only created new tourist destinations but also provided livelihood and employment for the local communities.
All these and many other initiatives are reflected in your Company''s financials. During 2016-17, the Company''s standalone operating income crossed Rs.1000 crore. Profit after tax stood at Rs.131 crore — a growth of 15 per cent over the last year. What makes this performance all the more creditable is that it was achieved despite an adverse macroeconomic environment. Not only did economic growth decelerate by 1.3 per cent during the year — coming down to 6.6 per cent from 7.9 per cent in the previous year, demonetization also proved to be a dampener on consumer sentiments, especially for high-value discretionary spend categories like vacation ownership.
In the year 2014-15, your Company took a major step in realizing its global vision by acquiring 18% stake in Holiday Club Resorts Oy (HCR), a leading vacation ownership company in Europe. Subsequently, the stake has been increased to around 95 per cent. With this investment, Mahindra Holidays along with HCR has become the largest vacation ownership company outside of US. I am also pleased to say that HCR made a profit in the previous year and the future augurs well for the company in Finland.
Above all, your Company has a healthy balance sheet. An inventory of over 3000 rooms with near zero debt at the parent level. The debt in the subsidiaries is to take advantage of low interest rate available in those countries and is fully backed by assets in subsidiaries.
All this would not have been possible without the excellent work done by the management team, duly supported by all the employees and of course consistently upgrading technology to not only improve member experience but also operations.
Please join me in congratulating every employee of Mahindra Holidays for this performance in 2016-17 and also in encouraging them to do even better in the future.
Thank you for your support.
With warm regards,
Arun Nanda Chairman