Mahindra Holidays Plans To Raise Capex To Rs 2,000 Crore By Fiscal 2025

Mahindra Holidays and Resorts India Ltd. plans to raise its room count and to achieve that aim, it expects to hike its capex to Rs 2,000 crore in the next fiscal.

"We plan to double the room count from 5,000 to 10,000 in the next six years and have about Rs 835 crore capex in play to deliver 690 rooms in the next one or two years. We are aiming to increase the capex to approximately Rs 2,000 crore in the next year (FY25)," said Kavinder Singh, managing director and chief executive officer, Mahindra Holidays and Resorts India Ltd.

The aim is to quickly ramp up "our run rate of room additions", which currently stands at 370-400, he said.

"We have seen quite robust occupancies—approximately 84-85%—this quarter. And in December, we would have probably reached 90%. We have seen a significant uptake," Singh said.

It currently has two greenfield projects underway—one in Ratnagiri, Maharashtra and another in Theog, Himachal Pradesh. "We also have an expansion project in Himachal Pradesh and a few other projects..."

Mahindra Holidays has seen significant momentum in member additions, he said. They have grown member addition by 17% on a year-on-year basis and they see the momentum continuing, Singh said.

"There is a lot of action taking place to make sure that the member additions keep pace with the inventory additions," he said. "We have started to move extremely fast in terms of greenfield projects, expansion of existing resorts, leasing and acquisitions."

Singh termed this year as an inflection point, in terms of creating supply. "In India, the leisure market is very underserved."

There are only 28,000 rooms in the leisure category in India, as compared with destinations like Bangkok and Dubai, according to him. "We will be increasing them to 5,000-7,000 keys, with significant amount of capex outlay," Singh said.

The company doesn't need to borrow, he said. "We have Rs 1,176 crore cash available with us and are very confident on maintaining occupancy."

The hospitality major plans to cross 400 room additions next year. "And this is a momentum that will continue for at least 5-10 years," Singh said.

In terms of the public-private partnership model, Singh said it suits the interests of the state government as well as the company. "The government wants us to popularise new destinations, which is the need of the nation and the state. And we are fulfilling that purpose, while getting an opportunity to create resorts faster in newer destinations."

They are working closely with state governments in PPP models, he said. "We have signed an MoU with the Uttarakhand government, with Rs 1,000 crore investment. We have also identified four pieces of land, with the Odisha government near Chilika Lake, and have been awarded land by the government as well. So, we see a lot of action happening in the PPP models."

Their recently opened hotel in Himachal Pradesh's Janjehli Valley "is doing extremely well", he said.