mahindra holidays resorts india ltd share price Management discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Mahindra Holidays & Resorts India Limited (Mahindra Holidays MHRIL or the Company) is a leading player in the leisure hospitality industry in India. Founded in 1996, the Company has established vacation ownership business in India and is the market leader with over 2 8 lakhs members. Together with its Finnish subsidiary, Holiday Club Resorts (HCR), Mahindra Holidays has over 3.4 lakhs members and 143 resorts in India, Asia, Europe and the USA — making it the largest vacation ownership company outside the USA.

Mahindra Holidays also offers its members access to over 4,300 RCI affiliate resorts worldwide and an opportunity to holiday at 388 partner hotels in India and abroad through Horizons Rs.— its own holiday exchange programme for members. In addition, it offers unique membership privileges — an unmatched range of travel and lifestyle experiences — which differentiates it within the industry. This experience ecosystem has made Club Mahindraan aspirational brand in the leisure hospitality industry in India.

This Management Discussion and Analysis (MDA) Report presents an overview of the operational and financial performance of the Company. It also discusses the macroeconomic environment and opportunities, Mahindra Holidays strategy and important initiatives taken by it during the year. We begin with a summary of the Companys performance in 2022-23.

Summary and Key Highlights

After multiple waves of Covid-19 in the previous two years, 202223 was the first full year when India was not directly impacted by it. However, there were challenges due to disruptions in global supply chains following fresh outbreaks in China and the war in Ukraine. But India continued to be a global bright spot, with impressive macro-economic stability and a strong GDP growth of 7% in 2022-23. The section on Macroeconomic Environment and Opportunities provides further details.

Based on the experience from the pandemic, particularly the Omicron wave in January 2022, it was clear that the leisure travel and hospitality industry in India was poised for significant growth provided there were no major Covid outbreaks. We had also shared this sentiment in our outlook for 2022-23 in the last years MDA report. As the year progressed and a supportive environment ensued, Mahindra Holidays implemented a focussed two-pronged strategy anticipating significant increase in demand for holidays.

First initiative was to drive occupancy and ensuring highest levels of customer satisfaction — both while holidaying at resorts and in member servicing.

Further details on these initiatives and achievements are provided in the sections on Resort Operations and Member Experience.

Second, the Company took wide-ranging measures to expand its distribution network across multiple channels with the objective of surpassing its pre-Covid performance on member acquisition. These are covered in greater detail in the section on Membership.

This focus substantially augmented the organisational capabilities built over time through the Companys commitment to its three key identified priorities: Experience Ecosystem, Member Lifetime Value and Digital First. (See the section on Strategic Priorities for discussion on these areas). As a result, Mahindra Holidays reported a considerable improvement in performance in 2022-23:

• Mahindra Holidays added 17,477 members to its vacation ownership business in 2022-23, a growth of 36.9% compared to 12,764 members added in the previous year. This is also significantly higher than 15,697members added in the pre-Covid year of 2019-20.

After accounting for members who completed their membership tenure, the cumulative membership base stood at 281,820 as on March 31, 2023, compared to 265,980 at the end of 2021-22. See the section on Membership for further details on products and initiatives.

• Another significant achievement in 2022-23 was that the number of Club Mahindra resorts crossed the 100-mark to close at 102 resorts as on March 31, 2023.

Up from 84 at the end of the previous year. Several new domestic and international destinations were added. Overall, the Company added 372 rooms taking the total room inventory to 4,940 units as on March 31, 2023. Further details are provided in the section on Properties and New Projects.

• Occupancy improved significantly to 84% in 2022-23, compared to 74% and 72% in 2021-22 and 2020-21 respectively. It was even higher than 80% achieved in the pre-Covid year of2019-20.

This is momentous as it comes on a significantly larger operating inventory given the strong inventory additions in the last few years.

At the same time, considerable improvements were reported in member servicing parameters, feedback scores as well as appreciation on social media.

Initiatives to engage with members and excellence in operations are presented in sections on Member Experience and Business Excellence.

This improvement in MHRILs operational performance is also reflected in the financial results for 2022-23. As shown in Chart A.

Total Income (including Other Income) for Mahindra Holidays as a standalone entity, increased by 21.9% from Rs.1,071 crore in 2021-22 to Rs.1,306 crore 202223.

This was also driven by an impressive 67.4% growth in Resort Income from Rs.193 crore in 2021-22 to Rs.323 crore in 2022-23.

Profit Before Taxes (PBT) of MHRIL as a standalone entity grew from Rs.204 crore in 2021-22 to Rs.214 crore in 2022-23. Profit After Taxes (PAT) also grew along similar lines from Rs.151 crore in 2021-22 to Rs.159 crore in 2022-23. A more detailed analysis is provided in the section on Financials.

Macroeconomic Environment and Opportunities

After a strong recovery in 2021 following the Covid-19 pandemic, the global economy was expected to register another year of impressive growth. But the fragile recovery was soon derailed. The war in Ukraine severely affected global energy and food markets. At the same time, restrictions in China following fresh Covid-19 outbreaks disrupted global supply chains.

According to the International Monetary Fund (IMF), world GDP grew at 3.4% in 2022, compared to the growth of 6.3% in 2021. Emerging and developing economies in Europe were the most impacted.

Spiralling inflation in global commodities and consumer goods prompted several advanced economies to tighten their monetary policy, causing further recessionary pressures and well as systemic risks to the banking and financial sectors.

In its latest estimates released in April 2023, the IMF projects the global economy to grow at 2.8% in 2023. This slowdown will be concentrated in Advanced Economies, especially the Euro Area and the UK.

In comparison, the Indian economy has performed much better.

According to the second advance estimate released by the National Statistical Office in February 2023, Indias GDP grew at 7.0% in 2022-23, with both private consumption and public investment driving this growth.

While the growth moderated somewhat compared to 9.1% in 2021-22, it continued to be broad-based with the exception of manufacturing. In fact, India continues to be a bright spot in the global economy, not just as the fastest growing large economy in the world but also in terms of its macroeconomic and financial stability.

This is not to say that India is insulated from the rest of the world or that it does not face headwinds from persistent inflation or poor external demand. But the fact remains that it has been able to navigate the situation well. While the Reserve Bank of India (RBI) has been quick to react, increasing policy rates cumulatively by 250 basis points in 2022-23 to rein in inflation, the Governments policies have continued to support growth.

According to the RBIs recent Monetary Policy Report released in April 2023, India is likely to witness only a marginal deceleration in growth from 7.0% in 2022-23 to 6.5% in 2023-24.

As far as the hospitality industry in India is concerned, 202223 saw major improvement in performance. There has been a significant rebound in domestic travel, with domestic air passenger traffic continuing to post healthy growth right through the fourth quarter of 2022-23. Both occupancy and the average daily room rates witnessed impressive growth, surpassing their pre-pandemic levels. Overall, the Leisure travel has seen a big rebound as well. Post Covid, members have been availing holidays with their extended families and the increase in hotel tariffs has made vacation ownership proposition more attractive.

At the same time, the long-term fundamentals of the industry in India remain strong. Governments strong push on domestic tourism as well as creating an enabling infrastructure is likely to have a multiplier effect in the future. The vacation ownership industry, with its loyal membership base, has even better prospects. The aspirational consumer segment in India is increasing at a rapid pace, expanding the opportunities for growth of the business. At the same time, the current market penetration of vacation ownership in India is very low at around 2% compared to 11% in the US, indicating considerable scope for growth.

More generally, if one looks at the hospitality industry, emerging trends in leisure travel — for instance, multi - generational travel for family bonding, wellness tourism for rejuvenation, Eco & Conscious travel, curated do-it-yourself experiences, alternative and experiential holidays, drivable destinations — open-up further opportunities for companies that can innovate and provide immersive holiday experiences.

Mahindra Holidays is the market leader in the vacation ownership business and is well placed to capitalize on these opportunities. Besides, its large network of resorts in India and an unparalleled experience ecosystem gives the Company an edge when it comes to not just deliver on these emerging consumer trends and expectations, but also to establish industry benchmarks. Its impressive performance in 2022-23 highlights the resilience of its business model as well as its ability to scale-up operations with agility. It also underscores the trust and confidence its members repose in the Mahindra brand, which is a crucial differentiator and contributes enormously to the Companys performance.

Strategic Priorities

Considering the competitive landscape, major trends in the leisure travel and media consumption habits, the Company has identified three key strategic priorities to differentiate itself in the market and deliver superior business performance.

These are discussed below.

Building an Experience Ecosystem

The objective is to strengthen the Club value proposition of the Club Mahindra brand by building an extensive ecosystem offering unparalleled choice of destinations, itineraries, experiences and services as well as implementing appropriate tech-based solutions to aid their utilisation.

While providing immersive holiday experiences continues to be at the core of the Club Mahindra offering, the idea is to go beyond that and offer unique privileges to its members even outside the seven-day annual holiday period. In 202223, there was considerable progress in this journey. Key developments are given in Box 1.

Box 1: The Club Mahindra Experience Ecosystem

• Choice of Resorts: Added several resorts with a focus on new destinations and experiences to take the total number of resorts from 84 to 102 by the end of 2022-23: new domestic additions include Gangtok, Lachung, Jambughoda, Janjehli, Koyna, Khopoli, Ambaghat and Tirupati; new international locations include Maldives, Abu Dhabi, Chiang Mai (Thailand), multiple destinations in Cambodia (Phnom Penh and Angkor), Vietnam (Hanoi, Saigon and Halong) and Nepal (Kathmandu and Chitwan).

• Horizon Holiday Exchange Programme: Members can exchange their Club Mahindra room nights for stays in top-rated hotel chains after paying a nominal access fee. This currently covers 388 hotels across 180+ locations in India and abroad, covering major cities and holiday destinations where Club Mahindra is not currently present. During the year, it added several popular international destinations such as Vienna, Prague, Paris, Berlin, Budapest, Rome, Venice and Lisbon. The platform now also supports real-time availability and booking in select hotels, adding to the convenience and increased utilisation. 2022-23 saw strong increase in utilisation of room nights under this programme.

• Travel Services and Curated Holiday Experiences: Offers its members a wide range of travel services such as airport transfers; travel assistance; curated holiday experiences, seasonal tours and weekend getaways and villas. Members can book individual services or complete packages at attractive discounts at the Companys online platforms. In 2022-23, packages were added for several new destinations and experiences. An exclusive help and fulfilment desk was also set-up to facilitate seamless access for our members.

• Club M Select: An exclusive subscription programme which allows enrolled members access to several luxury lifestyle offerings: international hotels, cruises and excursions; air travel benefits; dining privileges; lifestyle experiences; and luxury holidays. The platform provides exclusive member only pricing, real time booking, unrestricted access, unlimited usage as well as zero transaction charges. During the year, it added offers on SPA treatment in MHRIL resorts, SPA services at airports, personalised yoga sessions and luxury holidays, while at the same time making several improvements to the user experience. 2022-23 saw strong growth in membership and transactions.

• MHRIL increased its stake in Great Rocksport Private Limited (Rocksport) from 6.67% to 23.42%. The primary objective is to enhance outdoor experience offerings by developing theme adventure parks in Club Mahindra resorts. It currently has two adventure parks as a part of this partnership: Jungle Adventure Park in Assonora and Ape Adventure Land in Netrang. Members will also have access to Rocksports facilities in cities.

Enhancing Member Lifetime Value

The objective is to engage with the members and enhance the lifetime value during their tenure of membership. To achieve this, the singular focus is on developing an indepth understanding of the consumer — their needs and preferences — by utilising data and best-in-class analytics. The results of this approach are reflected in the Companys (i) product portfolio, (ii) thoughtfully designed service offerings and (iii) Best in class member engagement processes and programmes.

Over the years, these capabilities have been used to drive product and season upgrades, generate referrals, increase resort income and improve collection efficiency — directly contributing to its operational and financial performance. Some important elements of this strategy as well as key developments in 2022-23 are presented in Box 2.

Box 2: Enhancing Member Lifetime Value

• MHRIL has a complete product portfolio that covers all key life-stage segments — GoZest for young families (<30 years), longer term Club Mahindra (CMH25 and CMH15) for families in age group of 30+ years and Bliss for 50+ years. This allows the Company to market its products to people across all life stages. Buoyed by the success of GoZest in bringing young consumers into the Club Mahindra fold and opening-up opportunities to later upgrade them to its longer-term products, MHRIL piloted Resort Escapes in 2022-23. This is another short- tenure product targeted at millennials which will be sold exclusively through digital channels.

• The Company also encourages members to upgrade to higher tenure products as well as to higher seasons and room configuration within the same product. The upgrade process is automated with complete information on season and rooms upgrade options as well as facility for online payments through the website or the mobile app. Revenues from upgrades reflected a healthy increase, growing at 71% to Rs.188 crore in 2022-23.

• In another important initiative during the year, Mahindra Holidays launched Club M Rewards, a multi-tiered loyalty programme to enhance member engagement and incentivising referrals with a wider set of benefits and redemption choices. This builds on the erstwhile Happy Family Referral Programme, making the entire referral process more attractive as well as seamless through greater adoption of digital technology for access, sharing information, tracking progress and redemptions. Both participation in the rewards programme and member additions through referrals increased significantly in 2022-23.

• Data & Analytics has been instrumental in implementing member-friendly services as well as driving business goals: (i) using booking history, patterns and member profile to recommend holiday options is one of the most used features for resort discovery (ii) proactive analytics based recommendation of new resorts (iii) predicting member demand and cancellations to dynamically manage inventory utilisation, maximising occupancy and member holidays (iv) generating insights on holidaying needs, food preferences and special occasions to customise attractive options to prebook meals and experiences to drive resort incomes (v) identifying members for referrals and upgrades (vi) receivables management and collections.

Digital First Philosophy

Another strategic priority for the Company has been to reinvent its marketing strategy around digital content in line with media consumption trends which favour social media, as well as utilise technology to improve outcomes while engaging with members and prospects. Some of the key initiatives and achievements in 2022-23 are presented in Box 3.

Box 3: Reinventing Marketing — Key Initiatives

• Brand Campaign: Club Mahindra launched its new flagship campaign with Raveena Tandon — across social media, TV and print — to showcase family experiences and position Club Mahindra as a caring family brand from the perspective of a mother (#Familykisuperwoman). The campaign generated over 170 million impressions on digital and social media platforms. It also produced a 6-part series Club Mahindra Presents Magical Trails in which celebrities promoted its destinations, properties and experiences. Its Family Premier League campaign won the 2022 DMA Asia Echo CREATEFFECT Award under the Travel and Hospitality category.

• Brand Platform: MHRIL launched The Stage, its intellectual property platform curating events that resonates with the brands core values, thereby differentiating it within the industry and augmenting its aspirational value. Events showcased under the platform in 2022-23 included: Discover India Art Fair, a 3-Day Theatre Festival by renowned theatre artist Lillete Dubey and a Conversation with Dinesh Karthik, one of Indias most prolific wicketkeeper batsmen.

• Digital Assets and Platforms: Upgrading the

Companys digital assets and platforms is a continuous process. Several measures were taken during the year to improve the prospects as well as members websites, improvements in online journeys pertaining to upgrade process, digital onboarding of members as well as holiday planning and booking, digital payments and collections. The enhancements in prospects website contributed to significantly higher organic traffic, sessions, digital leads and sales during the year. Besides, several initiatives are underway including: (i) new members website and mobile app encompassing all its products to provide an unified experience to the members, and (ii) an interactive solution for virtually assisted selling.

• The Club Mahindra Members Community has become a vibrant engagement platform for its members to share their experiences and help other members with valuable information on resorts and planning holidays. The user generated content of the community is leveraged across the Companys digital platforms in the form of travel stories and blogs to showcase member delight and drive occupancy, referrals and lead generation.

Business Performance

Membership

Club Mahindra is the Companys flagship product in the vacation ownership business. The core offering CMH25 entitles its members a weeks holiday every year for a period of 25 years. During the year, the Company launched CMH15 — a shorter duration 15-year product. Both these products are targeted at young families in the 30-plus age group who would like to take regular vacations and spend quality time with their families.

It also markets Bliss — a flexible points-based product targeted at the 50-plus age group — which offers a weeks holiday every year for 10 years and GoZest, which is a three- year points-based product aimed at travellers in the less than 30 years age-group to introduce them to the Club Mahindra experience and generate interest for the core offerings. With these products, the Company has a complete product portfolio across all life stages of its target audience.

The Company added17,477members in 2022-23compared to 12,764 in the previous year, reflecting a growth of 37% during the year. After accounting for members who completed their membership tenure, total membership stood at 281,820 as on March 31, 2023, compared to 265,980 at the end of2021-22. Chart B provides data on the cumulative membership for the last 10 years.

Note: Membership includes all vacation ownership products of the Company.

This exceptional performance was made possible by the wide-ranging measures taken by the Company to expand its distribution network across multiple channels. The key elements are presented below:

• First, Mahindra Holidays strengthened its core presence through its branch network, sales offices and teams which operate in large towns and cities. The distribution network was also expanded with appointment of franchisee and direct sales agents (DSAs).

• Second, given the increased occupancy at resorts, special focus was on on-site sales channel at resort locations. Here, the effort was not just limited to sales, but also to augment efforts on renewals and upgrades. These are increasingly becoming more important as the Company targets younger families with its experiential offerings. On-site sales teams expanded from 38 to 44 locations in 2022-23.

• Third, the Company has put in place a new channel for corporates. Here, the idea is to target their employees and generate leads through partnerships and brand associations. This strategy has been successful in expanding our reach and brand proposition among the target audience and generating high-quality leads.

• Moreover, all of this was powered by appropriate technology interventions as well as the Companys ability to train and deploy adequate manpower. For instance, MPower — the Companys Mobile App for its sales team was extended to DSAs to augment their capabilities and standardise sales process across the organisation.

As a result of these efforts, Mahindra Holidays geographic reach and presence increased significantly during the year. Smaller towns and cities saw their contribution to the sales mix increase.

In 2022-23, 37% of its new members came from smaller towns and cities. At the same time, focus on digital and referral leads continued and about 57% of the sales came from these sources, reflecting the Companys success in digital marketing and superior member engagement. These have already been discussed in the earlier section on Strategic Priorities

Club Mahindra Fundays is a corporate product which allows enrolled organisations to offer holiday entitlements to its employees either as a part of their reward and recognition programme or as an employment perquisite. In 2022-23, Mahindra Holidays onboarded new clients into the platform and the increase in utilisation of room nights was satisfactory.

Properties and New Projects

Mahindra Holidays has a pan-India presence through its extensive network of resorts across destinations including hill stations, beaches, backwaters, wildlife sanctuaries, forts and heritage destinations. It is also present in international destinations such as Bangkok, Pattaya, Phuket, Bali, Kuala Lumpur, Singapore, Dubai, Colombo, Bhutan, Maldives, Vietnam, Cambodia and Nepal. In addition, Club Mahindra members have a choice to access HCRs 33 resorts in Finland, Sweden and Spain.

During the year, Mahindra Holidays continued to add room inventory in line with its positive long-term outlook for growth of leisure travel industry in India. As shown in Chart C, it added 372 rooms units in 2022-23, taking the total inventory from 4,568 room units in 2021-22 to 4,940 room units by the end of the year.

This has been a significant year also in terms of resorts added: number of resorts crossed the 100-mark to close at 102 at the end of2022-23, up from 84 at the end of the previous year.

This addition includes several international destinations, where the Company entered for the first time: Maldives, Abu Dhabi, Chiang Mai (Thailand), multiple destinations in Cambodia (Phnom Penh and Angkor), Vietnam (Hanoi, Saigon and Halong) and Nepal (Kathmandu and Chitwan). Room inventory additions in 2022-23 also included new domestic destinations such as Tirupati (Andhra Pradesh), Jambughoda (Gujarat), Janjehli (Himachal Pradesh), Lachung (Sikkim) as well as Koyna, Khopoli, and Ambaghat in Maharashtra.

The Janjehli resort in Mandi district is under a public-private partnership (PPP) contract with the Himachal Pradesh Government. The efficiency and pace at which this property was renovated and made operational gives MHRIL the confidence to explore further opportunities in this space. In the previous year, MHRIL had also emerged as the successful bidder for another PPP project with Maharashtra Tourism Development Corporation at Harihareshwar where the formalities are in progress.

In line with the Companys strategy, a significant part of the room inventory is owned by it. In cases where resorts are under long-term lease arrangements, it manages the resorts to ensure delivery of a consistent experience to its members. It also adds inventory through short-term arrangements to test new destinations and offer greater choice to its members.

Given the long-term potential for vacation ownership business in India and the Companys growth outlook, increasing room inventory continues to be a key focus area.

Over the next few years, additions are planned through both greenfield and expansion projects. New projects are planned at Ganpatipule (Maharashtra) and Theog (Himachal Pradesh), whereas expansion projects include Kandaghat (Himachal Pradesh), Assonora (Goa) and Puducherry.

Mahindra Holidays also has land bank at several other destinations, including at some of its existing resorts, which provides further flexibility in adding inventory on an ongoing basis. The Company is actively evaluating the opportunity at some of these locations. In addition, it will continue to look at opportunities for fresh leases and acquisitions, especially in regions where it perceives demand to be stronger in the medium term.

Resort Operations

Efficient resort operations and thoughtfully designed, engaging resort amenities are central to delivering immersive holiday experiences. This encompasses three key areas: infrastructure and facilities, holiday activities and F&B. Mahindra Holidays has the unique distinction of having 31 RCI Gold Crown, which bears testimony to the high standards of resort facilities, amenities and services that its resorts offer.

Holiday activities are central to delivering a complete holiday experience. At Mahindra Holidays, these are institutionalised under the banner of Happy Hubbuilt around a strategy of do-learn-connect. The Host and Champs programmes, which have been instrumental in enhancing member engagement at resorts were expanded further.

At the end of the year, the Company had over 300 hosts and around 120 Champs across resort locations making moments magical for our holidaying members.

During the year, the Company introduced Happy Ville in Club Mahindra Tungi — a dedicated play zone and activity area for kids that can also be used for birthday celebrations, arts and craft workshops, daycation picnics, special kids theme events and photo shoots. It also launched Happy Days — to institutionalise celebration of our members birthdays and anniversaries. Special events were also curated to celebrate local festivals, Christmas and new year events and International Days associated with food such as World Chocolate Day, Pizza & Pasta Day. Besides, theme nights have been integrated into the core activities calendar, with most resorts doing three such events every week.

In F&B, efforts are continuously undertaken to make the dining experience more exciting and fulfilling. Twenty-eight of its resorts are certified under ISO 22000:2018, which is an international accreditation recognising enhanced food hygiene and safety. Mahindra Holidays operates several successful restaurant concepts across its resorts such as Barbeque Bay, Unwind, Curries, Spice, Finz and Ripples.

During the year, two of our F&B outlets in Goa — Curries at Club Mahindra Assonora and Waterfield Cafe at Club Mahindra Varca — were nominated for the Best All-Day Dining category at the prestigious Times Food & Nightlife Awards 2022, Goa.

Mahindra Holidays has institutionalised post-holiday feedback (PHF), which encompasses all key areas of resort operations. This serves as a measure of its success in delivering quality holiday experience as well as identifying and addressing member concerns. The Company continues to improve its PHF scores on an ongoing basis.

Member Experience

At Mahindra Holidays, excellence in member services is about a customer centric mindset and ensuring high levels of satisfaction in all its interactions with members, thus improving their overall experience of the Club Mahindra brand. This is aided by appropriate technological and digital interventions to also deliver on key operating metrics including occupancy, referrals, upgrades, collection, proactive management of issues and retention.

During the year, MHRIL upgraded its member contact centre to enable 24 x 7 availability, which has improved the service levels and member experience considerably. At the same time, enhancing its digital interaction and servicing capabilities through its website and mobile app as well as newer channels such as WhatsApp, Voice and Mobile Bot continue to be a focus area. Several improvements were implemented in these areas in 2022-23.

Online bookings continue to be over 80% of the total bookings and over one-third of all member queries are being answered through digital channels. Overall turnaround times for resolution of member requests came down significantly across all touchpoints in 2022-23.

The Company carried out several resort and region specific campaigns as well and personalised communication to drive member holidays, especially among non-holidaying members. Besides, it proactively plans first holidays for new members. As a result of these initiatives, occupancy increased significantly to 84% in 2022-23, compared to 74% in the previous year.

All key operational metrics of effective member experience — be it referrals, product upgrades, collection or retention have shown a healthy improvement during the year. Feedback received through internal feedback mechanisms as well as external surveys continues to be on an upward trajectory, reflecting the success of its member servicing efforts. Sentiment metrics for key social media platforms were also overwhelmingly positive during the year.

Business Excellence

Mahindra Holidays has adopted the principles of Total Quality Management (TQM) under the banner of The Mahindra Way — the Mahindra Groups integrated approach to promote excellence in all spheres of its operations. The Company has successfully institutionalised quality systems in all critical business functions. Some of the other key developments in 2022-23 are discussed below.

Promoting a culture of continuous improvement by institutionalising Kaizens has been central to the Companys efforts in this area. The impact of these projects has also been amplified by the online portal which acts as a repository and a tool for company-wide deployment.

During the year, the adoption of i2i (idea to implementation) mobile app for submission of ideas for innovation and sharing of best practices, including Kaizens, increased further. Over 60,000 Kaizens were registered across the organisation in 2022-23, including around 17,000 through the mobile app.

The Company has also implemented CAPA (Corrective Actions & Preventive Actions) methodology for the identified problems by monitoring daily work to arrive at solutions. Over 900 CAPA projects were implemented in 2022-23. It also has a CAPA portal to register these projects and create a repository for organisation-wide deployment.

Continuous learning is at the centre of our journey towards excellence and the Companys e-learning platform plays an important role in this regard.

In 2022-23, new e-learning modules were created to create awareness on Quality. Overall, 3,900participants completed22,500 certifications during the year.

Human Resources (HR)

Hospitality is a service-oriented business where customer experience depends directly on the interaction between the customers and employees. At Mahindra Holidays, this is codified in the SEWA philosophy: a set of values and behaviours reflecting "Service with Empathy Warmth and Attentiveness". This philosophy is embedded in all day-to-day processes to drive a service culture in the organisation and ultimately, performance.

The Companys operations are spread across its 102 resorts as well as another 50 locations comprising its sales establishments and corporate offices. Accordingly, the HR function at Mahindra Holidays is organised into three key areas: resort operations, customer acquisition and corporate functions. Over 70% of its people are in customer facing roles. Besides, as millennials form a large part of our workforce, attracting the right talent and providing them with right avenues to grow is key to its success.

Accordingly, the Company strives to ensure that its talent development and engagement practices successfully assess employee strengths, identify areas of development, augment skills through targeted learning and development (L&D) interventions and reward performance with opportunities for growth. Some of the key L&D initiatives undertaken in 202223 were:

• The Company has institutionalised Shubharambh — its induction and onboarding programme for all sales and frontline resorts personnel — to handhold them and impart necessary skills for early success. This is achieved through a combination of training on processes, sharing experiences, imparting practical skills and sharing feedback for improvement.

• Two new programmes were launched to train sales personnel in line with business priorities in 2022-23: (i) Road to Success, which is a week-long training program for Relationship Managers and Telemarketing Executives focused on teaching the most effective way to interact with prospects and creating a customised sales pitch, and (ii) On-site Sales Pitch, which is a specialised programme designed to identify opportunities to connect with members and prospects at our resorts.

• Fast-track growth programmes to identify and develop high-potential employees for supervisory and managerial positions after a rigorous training including classroom sessions, on the job assignments and live projects. During the year, high potential employees were enrolled in these programmes under the banner of iGrow for both sales and resort functions.

• Club Mahindra Executive Training programme for resorts and sales aims at building homegrown team of

best-in-class professionals following source-hire-train model for its unique and differentiated product offerings. Over the years, this 18-month intensive programme has been successfully providing a steady stream of trained managerial talent for sales and resorts.

Other important programmes undertaken in 2022-23 include Leading to Grow for team management and leadership skills, Department Trainers Programme to create a core group of trainers in each functional area at resorts, Customer Leadership and Commercial Mindset for resort leaders to successfully deliver on business outcomes. Besides these, MHRILs ASPIRE E-learning portal and Harvard ManageMentor Spark continue to provide self-paced learning opportunities based on individual developmental needs.

Maintaining high employee engagement levels continues to be a top priority. The Companys rewards and recognition program is aligned with its values and is designed to celebrate role models and performers. It also has a digital platform called CHEERS — Club Mahindra Happy Employees Engagement & Recognition System — to connect, collaborate, celebrate milestones and appreciate peers for their efforts all under one unified hub. Mahindra Holidays featured among the Best Companies to work for in India — Rank 20, Best Workplace Hotels and Resorts and Best Workplaces Asia by Great Place to Work Institute in 2022

As on March 31, 2023, there were 5,206 people on the rolls of the Company. Industrial and employee relations remained cordial throughout the year.

Information Technology (IT)

Mahindra Holidays believes that IT plays an active role in providing a competitive edge and contributes directly to its performance. The Company has invested significant resources in its IT architecture and benefits from it in all key spheres of its operations.

During the year, the Company took several measures to support growth. This included extending the core IT infrastructure to its new operating locations — both resorts and sales offices. Efforts to upgrade its IT assets and application environment to digitise processes in customer acquisition, resort operations and member experience which have already been discussed in the respective sections of this report.

Security continued to be an important area of focus in 202223. This included upgrading security at the Companys data centres as well as establishing back-up link for any downtime in primary network line as a part of business continuity planning. Several initiatives have also been taken to strengthen internal data security systems and processes: implementation of data encryption and leak protection tools; restrictions on data access and sharing; mobile access and application security protocols; network and VPN access management.

Security awareness training for employees is an important part of its internal compliance processes. It also successfully conducted a surprise mock drill to restore its server powering the website for one of its core products to evaluate its readiness in the event of a cyber-attack.

Environment Social Governance (ESG)

As a part of the Mahindra Group, Mahindra Holidays is guided by the Rise philosophy, with the broader goal of driving positive change for all its stakeholders — including its customers, employees, vendors, shareholders — the communities in which it operates and the larger society. Adherence to the underlying principles of ESG have always been an important part of its functioning, guiding its strategic decision making to create long-term value as well as a tool for mitigating risks.

A discussion on the Companys processes and initiatives around Governance is provided in the chapter on Corporate Governance that forms a part of this Annual Report. In what follows, we present the Companys initiatives in the areas of Environment and Sustainability and Corporate Social Responsibility (CSR).

Environment and Sustainability

Mahindra Holidays is committed to conserve the ecological integrity of its operating locations through responsible business practices and activities such as measurement of carbon footprint, conservation of biodiversity, energy conservation, use of renewable sources, water conservation and waste recycling (See Box 4). These green initiatives undertaken by the Company are aligned to its larger mission of Good Living, Happy Families.

Box 4: MHRILs Sustainability Commitments

• Mahindra Holidays has committed to become carbon neutral by 2040.

• It is Indias first hospitality company that has signed both RE100 (Renewable Energy) and EP100 (Energy Productivity), a global campaign led by The Climate Group — setting targets to run on 100% renewable energy by 2050 and to double its energy productivity by 2030.

• MHRIL has also committed itself to the Science Based Target Initiative, which requires it to reduce greenhouse gas (GHG) emissions to limit global temperature rise to below two degrees Celsius.

• It is also committed to EP100 cooling challenge for which it monitors the efficiency of air conditioning systems and implements energy efficient solutions.

In 2022-23, Mahindra Holidays undertook various initiatives in the areas of renewable energy, energy saving, water conservation, waste recycling and biodiversity:

• Renewable Energy and Energy Saving: Solar power is streaming in 22 of its resorts with 43.43 lakh units (kWh) generated during the year.

Microgrid operations comprising solar energy and BESS (Battery Energy Storage System) is another major initiative to bring down use of diesel generators. It is installing a capacity of 9 mwp for its resorts in Maharashtra, Kerala and Madikeri. Outdoor solar lights continue to be installed in landscaped areas, whereas other energy saving initiatives have been systematically implemented at resorts as a part of its energy saving action plan. Deployment of electric vehicles at resorts, especially for internal movement has also increased.

• Water Conservation: Important initiatives include recycling of water from sewage treatment plants, rainwater harvesting, installation of water saving taps/ fixtures in rooms as well as public areas. Six of our resorts are currently water secure, with net-zero water usage through the principles of reducing consumption and recycling, rain harvesting, and recharging more than consumption.

Utilisation of rainwater increased considerably to 275 million litres in 2022-23. Similar systems will be implemented in another 20 resorts by 2025. Water consumption has reduced by 100 million litres compared to last year and 60% of total water consumed by the resorts was recycled in 2022-23.

• Waste recycling: The Company had embarked on the Zero Waste to Landfill (ZWL) programme in 2019-20 with its Virajpet resort becoming Indias first ZWL resort. Currently, four of its resorts are ZWL certified, and the aim is to certify all its resorts in another three years. It is also focused on the installation of organic waste converters, vermicompost systems and biogas which are currently operational at many of its resorts. It has also initiated steps towards implementing principles of circular economy, responsible sourcing and elimination of single-use plastics.

• Biodiversity: MHRIL has organic gardens at several of its resorts: Kanha, Munnar, Corbett, Poovar, Manali, Cherai, Dharamshala, Thekkady, Kandaghat, Assonora and Mahabaleshwar. Assonora Nature Park has theme-based gardens namely Herb, Spice, Butterfly, Medicinal and Nature trails. It also has butterfly gardens at Puducherry and Ashtamudi. India Business and Biodiversity Initiative (IBBI) has developed a case study on biodiversity initiative at Madikeri. Achievements in the Companys tree plantation drive are presented in the section on CSR.

The Companys efforts on sustainability are also reflected in the Platinumgreen building certification (IGBC-CH) of ten of its resorts at Ashtamudi, Emerald Palms, Puducherry, Naldehra, Kandhaghat, Varca, Poovar, Kanha, Mussoorie and Jaisalmer.

The Company actively participates in the Mahindra Groups Corporate Sustainability Reporting. The Sustainability Report of the Group is prepared in accordance with the internationally accepted framework specified by the Global Reporting Initiative (GRI). This framework sets out the principles and indicators that should be used to measure and report economic, environmental, and social performance.

During 2022-23, 43 resorts participated in sustainability reporting of the Group.

Corporate Social Responsibility (CSR)

Mahindra Holidays has been at the forefront of taking affirmative action and seeks to contribute to the socioeconomic wellbeing of communities that it interacts with in carrying out its business. MHRIL assists communities around its resorts by implementing initiatives in areas such as Girl Child Education, Women Empowerment and Environmental Sustainability.

Apart from working with not-for-profit organisations and contributing resources for CSR projects, the Company also encourages community service by its employees by involving them through its Employee Social Options Programme.

During the year. 2,155 employees volunteered 15,655 person hours on CSR initiatives. Key CSR initiatives undertaken by the Company in 2022-23 are presented below:

• Girl Child Education: Through the Nanhi Kali project, the Company supports education of 2,782 girls from socially and economically marginalised families. Under project Gyandeep, it provides infrastructure support, provisioning of books and stationary kits and renovation of schools.

• Women Empowerment: The Udaan programme provided support to 61 women by enhancing their skills, while the Saksham programme helped 100 women in developing businesses. Both initiatives aimed at providing employment opportunities, encourage entrepreneurship, and improve the financial independence of women in the community.

• Environment: 20,817 trees were planted in 2022-23 as a part of Mahindra Hariyali— the tree plantation initiative of the Mahindra Group — taking the total trees planted to 515,228 since the beginning of the project in 201011. Under its Green Guardians initiative, it undertook multiple programmes for sustainable fuelwood management. A water tank with a storage capacity of 1.5 lakh litres was constructed and connected to a glacier to address the issue of unreliable water supply in Prini, Manali. In another programme, 745 street vendors in Alibaug were provided solar lanterns for a safer and more conducive work environment.

Financials

Standalone Financial Results

Table 1 presents the abridged financial statements of the Company as a standalone entity.

Table 1: Financial Information (Standalone)

		(Rs. in crore)
	2022-23	2021-22
Income from Operations	1,196.2	960.7
Other Income	109.4	110.0
Total Income	1,305.6	1,070.7
Operating & Other Expenses	923.3	726.1
Finance cost	29.1	21.2
Depreciation	139.1	119.9
Total Expenditure	1,091.5	867.2
Profit Before Tax (PBT)	214.1	203.5
Tax Expenses	55.5	52.2
Profit After Tax (PAT)	158.6	151.3
Diluted EPS ( Rs.)	7.89	7.55
Cash & Cash Equivalents	1,157.7	1,171.6
Long-term Debt	-	-
Deferred Revenues	5,326.5	5,082.8

Total Income, which includes both operating and other income, grew at 21.9% from Rs.1070.7 crore in 2021-22 to Rs.1,305.6 crore in 2022-23. This increase was driven by an impressive 67.4% increase in Resort Income, which increased from Rs.192.7 crore in 2021-22 to Rs.322.5 crore in 2022-23. Income from vacation ownership, which includes income from sale of vacation ownership products (including interest income on payment plans) and Annual Subscription Fees (ASF) is the largest components of the Companys operating income, grew at 13.8% from Rs.768 crore in 2021-22 to Rs.873.7 crore in 2022-23.

Total Expenditure grew at 25.9% from Rs.867.2 crore in 2021-22 to Rs.1,091.5 crore in 2022-23, mainly on account of higher business activity reflected in higher sales and marketing spend, resort expenses and other overheads. Employee expenses also increased from Rs.248.6 crore in 2021-22 to Rs.301.9 crore in 2022-23 as the Company strengthened its capabilities in both customer acquisition and resort operations to support growth.

As a result, Profit Before Taxes (PBT) grew from Rs.203.5 crore in 2021-22 to Rs.214.1 crore in 2022-23. After accounting for taxes, Profit After Taxes (PAT) grew from Rs.151.3 crore in 2021-22 to Rs.158.6 crore in 2022-23. It must be noted here that PBT, without considering the items in Other Income that are one-off in nature, also reflects a healthy increase of 14.3% from Rs.160.4 crore in 2021-22 to Rs.183.3 crore in 2022-23.

Cash balances continued to be strong at Rs.1,157.7 crore at the end of 2022-23 — primarily due to better member quality and higher resort incomes. As a result, the liquidity situation of the Company remains comfortable. The Deferred Revenue pool of increased to Rs.5,326.5 crore as on 31^St March 2023, primarily driven by higher member additions during the year. This provides visibility on future revenues and improved profitability with minimal incremental costs. The Companys strong balance sheet is further underscored by lack of any long-term debt as a standalone entity.

Table 2: Key Financial Ratios (Standalone)

	2022-23	2021-22
Debtors Turnover a	1.05	0.82
Inventory Turnover a	7.97	5.74
Current ratio	1.99	1.90
Operating profit margin (%)	32.0%	35.9%
PBT margin (%)	17.9%	21.2%
PAT margin (%)	13.3%	15.8%
Return on Net Worth* (%)	12.2%	13.4%

* Net worth has been derived after excluding revaluation reserve of Rs.845.6 crore and Transition Difference of Rs.1,402.7 crore.

A Ratios where the change between 2021-22 and 2022-23 are significant — more than 25% as defined under the revised SEBI Listing Regulations.

Table 2 presents key financial ratios for Mahindra Holidays as a standalone entity. As the Company does not have any debt on its standalone balance sheet, Debt Equity and Interest Coverage ratios are not applicable and have not been calculated. Both debtor and inventory turnover ratios reflect a significant improvement — more than 25% — as defined under the revised SEBI Listing Regulations. In both cases, the improvement is consistent with increase in business activity during the year.

Holiday Club Resorts (HCR)

Holiday Club Resorts (HCR), Finland, is a wholly owned subsidiary of Mahindra Holidays through its step-down subsidiary Covington Sarl, Luxembourg. Established in 1986, HCR is the largest vacation ownership company in Europe and the largest operator of leisure hotels in Finland. As of 31^St March 2023, HCR had 33 resorts of which 25 are in Finland, 2 in Sweden and 6 in Spain. Its revenues are evenly split between the timeshare-related business and the hotel business. Its current timeshare membership is about 60,000 families and 1,300 companies. Besides, HCRs Spa Hotels service over 1.3 million guest visits annually.

The Finnish economy was significantly impacted by the Russia-Ukraine war and the rising inflationary pressures in 2022-23. Unlike in India, Covid situation in Finland also continued to pose challenges. As a result, operations of HCR were also impacted. Even so, HCR registered strong performance, especially in the second quarter, which is the main summer holiday season in Finland, and the skiing season in the fourth quarter. At the same time, the focus on reining in its costs continued during the year. Given the challenging environment, HCR reported a creditable performance in 2022-23. Table 3 provides summary of financial performance of HCR.

Table 3: Summary Financials — Holiday Club Resorts

		(million €)
	2022-23	2021-22
Total Income	144.2	122.1
EBITDA	5.0	(0.3)
Profit Before Tax (PBT)	(0.5)	(5.9)
Profit After Tax (PAT)	(0.5)	(5.3)

Note: As per Finnish Accounting Standard (FAS) Accounts

During the year under review, total income of HCR, which includes turnover and other operating income grew at 18.1% from € 122.1 million in 2021-22 to € 144.2 million in 202223. Both key businesses reported improvement in revenues. While the revenues from Spa Hotels grew at 27% to € 82.9 million, the revenues from Timeshare business increased by 32% to € 38.4 million.

This improvement in income coupled with the companys efforts to optimise costs resulted in a strong turnaround in operating performance in 2022-23. Earnings before interest, tax, depreciation and amortization (EBITDA) improved significantly to € 5.0 million in 2022-23, compared to € (0.3) million in 2021-22. PBT and PAT also improved during the year.

Although the war in Ukraine continues to pose challenges to its economy, Finland is now part of NATO which address long-term concerns when it comes to security. As for domestic leisure travel, timeshare demand in Finland has picked-up and SPA hotel occupancies have outperformed the local hospitality market. This buoyancy in the domestic leisure travel is expected to continue, which augurs well for HCRs performance in 2023-24.

Consolidated Financial Results

For the purpose of consolidation of financial results of the Company, 23 subsidiaries, two joint ventures (JV) and two associates as on 31^st March 2023 were considered. Table 4 presents the abridged financial statements of the Company as a consolidated entity. Further details of operational and financial performance of Holiday Club Resorts have already been provided.

Table 4: Financial Information (Consolidated)

		(Rs. in crore)
	2022-23	2021-22
Income from Operations	2,517	2,013.3
Other Income	106.9	165.6
Total Income	2,623.9	2,178.9
Operating & Other Expenses	2,045.4	1,698.2
Finance Cost	118.6	99.4
Depreciation	290	270.7
Total Expenditure	2,454.0	2,068.3
Profit before Share of Profit of JVs and Associate	169.9	110.6
Share of Profit of JVs and Associate	0.8	-
Profit Before Tax (PBT)	170.7	110.6
Tax Expenses	56.8	42.9
Profit after Tax (PAT)	113.9	67.6
Diluted EPS ( Rs.)	5.73	3.37
Cash & Cash Equivalents	1,287.1	1,241.3
Total Debt	756	934

Total Income increased by 20.4% from Rs.2,178.9 crore in 2021-22 to Rs.2,623.9 crore in 2022-23, whereas Total Expenditure increased by 18.6% Rs.2,068.3 crore in 2021-22 to Rs.2,454 crore in 2022-23. As a result, PBT after including share in profit/loss of JV and associates improved considerably from Rs.110.6 crore in 2021-22 to Rs.170.7 crore 2022-23. Consolidated PAT also grew from Rs.67.6 crore in 2021-22 to Rs.113.9 crore 2022-23, reflecting a growth of 68.3%. Accordingly, Diluted EPS improved from Rs.3.37 in 2021-22 to Rs.5.73 in 2022-23.

The liquidity situation remained comfortable during the year. On consolidated basis, total debt came down to Rs.756 crore as on 31^st March 2023, compared to Rs.934 crore at the end of the previous financial year.

Internal Controls

The Company has an adequate internal control system, commensurate with the size and nature of its business. The system is supported by documented policies, guidelines and procedures to monitor business and operational performance which are aimed at ensuring business integrity and promoting operational efficiency.

The Company conducts periodic internal audits in line with an audit plan that is drawn at the beginning of the year and is approved by the Audit Committee. The scope of the exercise includes ensuring adequacy of internal control systems, adherence to management policies and compliance with the laws and regulations of the country. The Companys ERP system has appropriate controls embedded in its processes and systems to reduce the need and reliance for compensating manual controls. These have also been strengthened from time to time.

Internal audit reports are placed before the Audit Committee of the Board of Directors, which reviews the adequacy and effectiveness of the internal control systems and suggests improvements for strengthening them.

Threats, Risks and Concerns

Mahindra Holidays risk management framework consists of identification of risks, assessment of their nature, severity and potential impact, and measures to mitigate them. This framework is in place for adequate and timely reporting and monitoring. Risks are reviewed periodically and updated to reflect the business environment and change in the size and scope of the Companys operations. The Company has a Risk Management Committee consisting of four Directors.

Macroeconomic Risks

Although the pandemic related risks came down considerably during the year, one cannot rule out future outbreaks and disruptions in economic activity due to this. Global inflation remains persistently high even as major central banks acted in sync to tighten monetary policies. The global economic environment remains fragile, with growth slowing down considerably in advanced economies and risks to their banking systems. India has fared much better, but things can change if there is a full-blown global financial crisis or further decline in outlook for global trade and output. This can adversely impact Indias growth prospects and also the Companys performance.

Mahindra Holidays recognises these risks. The Company has established risk mitigation measures for Covid-19 that have stood the test of time and it is fully geared to bring them back on short notice, if required. It also believes that its focus on customer acquisition through referrals, alliances and digital leads will help it to mitigate risks from economic downturns. Other initiatives to generate robust performance include a complete product portfolio across all life-stage segments, a differentiated product proposition and initiatives to augment member spends at resorts. That it is an aspirational brand and the market leader augurs well for it in tough times.

Operational Risks

Operational risks mainly relate to meeting customer expectations in terms of quality of service and maintaining a balance between the inventory of resorts and growth of customers. These assume significance given the long service duration of key products. As there are multiple choices of locations and seasons, there could be occasions where the first choice of holiday requested by the customers may not be available, which may result in dissatisfaction. Another operational risk is in the ability to consistently attract, retain and motivate managerial talent and other skilled personnel, especially in a high growth industry with unique characteristics. Further, some of the Companys resorts are in remote areas and natural calamities such as earthquake, flood, landslide etc. may affect the accessibility of the resort to members.

The Company has invested significant resources in systems and processes to mitigate these risks. Customer satisfaction continues to be favourable and on an upward trend. Regarding room inventory, the Company will continue to be judicious in the use of different options — greenfield projects, acquisitions, expanding inventory at existing locations, long term leases and inventory arrangements — to meet the expectations of its customers and at the same time maintain a balance between demand and supply. Regarding talent management and retention, management believes that its HR practices enhance employee engagement and satisfaction to effectively mitigate this risk.

Financial Risks

The Companys business operations involve significant investments in building resorts. These expose it to risks in terms of timely and adequate availability of funds at competitive rates to finance its growth. Besides, it offers its customers schemes to finance the purchase of the vacation ownership and similar products, which exposes it to credit risks. The Company is, therefore, exposed to potential risk of non-payment or delayed payment of membership instalments and/or the annual subscription fee by members resulting in higher outstanding receivables. Rising inflation could potentially increase the cost of resort operations as well as its project and renovation related costs. The Company is also exposed to foreign exchange risks due to its overseas subsidiary companies and debts on their books. However, such risk is mitigated since subsidiarys underlying assets are in respective foreign currencies and naturally hedged.

Currently, Mahindra Holidays has no long-term debt on a standalone basis and has a strong and stable capital structure to raise money for further expansion, if needed. The Companys focus on improving quality of sales by increasing down payments and lowering EMI tenures have been very effective in bringing down credit and repayment risks. Even so, it undertakes comprehensive assessment of the profile of its customers and carefully monitors its exposure to credit risk. Several improvements have also been implemented in the receivables management and collections to reduce such risks. Regarding inflation, the Company has a strong processes to mitigate these risks through a combination of cost savings measures such as centralised procurement of consumables and inputs for its projects. Suitable price increases have also been passed to the consumers in the form of F&B charges as well as membership fees. In respect of foreign currency debt, the underlying assets are also in the same currency, minimising the exposure to forex-related risks. HCR has also reduced its debt over the years. However, the risks of mark- to-market movements remain and the Company monitors the situation closely in this regard.

Regulatory and Legal Risks

Mahindra Holidays is exposed to regulatory and legal risks. These include cumbersome processes and risks relating to land acquisition, conversion of land for commercial usage and development of properties, environmental clearances, approvals and activities related to development of new resorts. There are also other regulatory and legal risks pertaining to tax proceedings, legal proceedings on properties, customer complaints, non-compliance of regulations including environmental regulations and those pertaining to the hospitality sector. Further, as the Company has investments and operations in different countries, it is also exposed to political and regulatory risks that emanate from its international presence.

Mahindra Holidays has adequate systems and controls in place to reasonably mitigate these risks and minimise instances of non-compliance. The Company also believes that its proactive stance on sustainability will hold it in good stead for future development and growth.

Outlook

India has been an outperformer in a fragile global macroeconomic environment. It has avoided runaway inflation, there are no systemic risks to its banking and financial markets and it delivered excellent economic performance in 2022-23. Even though there are downside risks, these are primarily from contagion effects of any major crisis in global financial markets, imported inflation and poor external demand. Overall, the outlook for domestic growth is positive, with the RBI projecting only a marginal deceleration in GDP growth to 6.5% in 2023-24. This means that India will continue to be the fastest growing large economy in the world.

With no Covid-related challenges, leisure travel in India gathered considerable momentum during the year. Demand for holidays increased, and so did the room rates. This meant that there were significant opportunities to drive occupancies as well as business. The inherent value proposition of the Companys products — providing a natural hedge against increase in room rents — also meant that they became much more attractive in the current environment.

Your Company had anticipated this and was fully geared to deliver on both fronts. Occupancy increased significantly during the year. At the same time, member acquisitions rebounded, and surpassed pre-Covid performance. This has been possible due to successful implementation of its strategy, committed teams and a strong service culture.

The focus on delivering immersive holidays for the entire family and building a complete experience ecosystem around it has made Club Mahindra an aspirational brand.

Mahindra Holidays believes in the long-term growth potential of the leisure travel and hospitality industry in India and expects the business environment to remain robust in 202324. It has an attractive product for all age-groups, over 2,000+ unique experiences across its 100+ resorts for its members to choose from, and a strong balance sheet to benefit from emerging opportunities in the leisure hospitality sector.

Cautionary Statement

Certain statements in the Management Discussion and Analysis describing the Companys objectives, projections, estimates, expectations or predictions may be forwardlooking statements within the meaning of applicable securities laws and regulations. Actual results could differ from those expressed or implied. Important factors that could make a difference to the Companys operations include poor macroeconomic growth and consumer confidence, inability to add resorts and increase the inventory of room, cyclical demand and pricing in the Companys principal markets, changes in tastes and preferences, government regulations, tax regimes, economic development within India and other incidental factors.