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Mahindra Holidays and Resort has decided to put on hold its plans to acquire management contracts for upscale hotels for FY21 as part of a strategy to conserve cash in the midst of the Covid-19 pandemic.
The hospitality firm will instead focus on development and expansion of existing facilities for this fiscal, said a senior official of the company.
Speaking to BusinessLine , Kavinder Singh, Managing Director and Chief Executive Officer, Mahindra Holidays & Resorts India Limited, explained that in the midst of the pandemic, it was important to cut other costs and focus on the existing plans.
“While we still aim to acquire upscale and midscale management contracts through our management company, it will not be in FY21. Instead, we are focusing on continuous momentum in the core company,” he added.
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Mahindra Holidays Q2 profit up 18.1% at ₹28.7 cr despite testing times
29% cut in expenses helps hospitality firm register higher profit despite lower total incomeMahindra Holidays is currently in the midst of finishing work on its 24-room property in Jaipur and a 82-room property in Alleppey, Kerala. It is also opening up its fourth property in Goa. Along with this, BusinessLine had reported in January that the company was in the midst of getting permissions for a ₹150-crore property in Ganapati Phule.
However, Singh said that “due to the lockdown, there is a delay in getting permissions from the authorities.”
Besides this, Mahindra Holidays is finalising two properties in Gujarat. “We have taken up an inventory of 20 rooms at Club Kensville near Ahemadabad and a second property at Netrang, which is a resort in a forest near Statue of Unity. The latter is an hour away from Surat,” Singh said.
Cash in hand gets a boost
By cutting down costs, Mahindra Holidays has been able to increase its cash in hand to ₹791 crore in the first half of FY21 as opposed to ₹781 crore the previous fiscal. It has also raised funds from banks to maintain liquidity.
Speaking about the festive season occupancy trend, Singh said the comapny is expecting a better momentum in Q3 and Q4.
“We aim to maintain a 7-8 per cent growth on a year-on-year basis, if not more.”
The company has been reopening resorts in a phased manner. This has improved the operating inventory to 69 per cent of total inventory in September and to 54 per cent in the second quarter. Currently, it is operating 37 of its 68 resorts, including those in India and abroad and those of its subsidiaries.
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