Mahindra Holidays & Resorts India Limited · NSE:MHRIL
Mahindra Holidays & Resorts India — Investor Presentation (June 2019)
78 slides from Mahindra Holidays & Resorts India's investor presentation, Jun 11, 2019
Slide 1: Investors Presentation cover letter to stock exchanges
4 ClubMahindra June 11, 2019 MHRIL/SE/ 2019-20/28 Listing Compliance Department of Corporate Services National Stock Exchange of India Limited BSE Limited Exchange Plaza, Plot No. C/1, G Block Floor 25, PJ Towers, Bandra-Kurla Complex Dalai Street Bandra (E), Mumbai - 400 051 Mumbai — 400 001 Scrip
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Slide 3: Forward looking statements disclaimer
This presentation may contain ‘forward looking statements’ within the meaning of applicable laws and regulations. Investors are cautioned that ‘forward looking statements’ are based on certain assumptions, which Mahindra Holidays & Resorts India Limited considers reasonable at this time and our view
Slide 4: Agenda
Agenda Environment Scan Customer Value Proposition Business Model Product at a glance Levers of growth Key Strategic Priorities Predictability of Revenues Key Takeaways 3
Slide 5: Domestic Economic Scenario
Domestic Economic Scenario GDP Growth Corporate Performance Discretionary Spending • India's GDP growth has • Corporate results in Q4 FY19 slipped to 5.8 % in Q4 FY19 showed a pattern of slowdown • Slow down across sectors and falling margins in FY’19, especially those • It had grown 7.1% in the Q2
Slide 6: India Domestic Travel
India Domestic Travel Trends (FY18) High Growth: Domestic travel Leisure Wins: Leisure travel and tourism industry growth dominates the overall segment, estimated at 7% p.a. till 2028 accounting for 95% of the overall ($247 bn at present) spends Explore New Territories: New, Focus On Experiences: le
Slide 7: Hospitality Industry
Hospitality Industry • The number of hotel rooms are estimated to grow at a CAGR of ~4% over the next 5 years • Only 5% of Indian rooms are from branded chains as of FY18, compared to 71% in USA, representing the massive opportunity present in the market • Occupancy rate for FY 18 was 66.6%, inching
Slide 8: Global Vacation Ownership Industry
Global Vacation Ownership Industry • Size of the industry – USD 9.6Bn; Total Timeshare resorts – 1570 with 205,100 units; 9.2Mn Household who own Timeshare product • Average occupancy – 81% - 40% of occupants were owners or owners’ guests; 17% were exchange guests; 17% were renters; 7% were marketin
Slide 9: Emerging needs of Leisure Travel
Emerging needs of Leisure Travel Wellness Enrichment ▪ Mental Wellness ▪ Experiencing the varied ▪ Work Life Balance ▪ social consciousness, giving back, Insta- worthiness ▪ Local produce/ organic making a difference food Building connections & Individual Identity : an Aspiration ▪ Social Validation
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Slide 11: Product & Member Profile
Product & Member Profile Our Target Member Profile Seasons Super Peak Peak 32+ years Age of Customer Married Medium Off Peak Apartment Types ▪ Appreciates quality family time 1 Bedroom Studio (2 adults, 2 children) (2 adults, 1 child) ▪ Takes regular Vacation With 1-2 (Age 3- ▪ Seeking Variety 15 yr
Slide 12: Flexibility
Flexibility To choose Flexibility to choose Season of Holiday, HOLIDAY Apartment type and option of splitting the week To travel with Flexibility to travel with your Extended Flexibility EXTENDED FAMILY Family and Friends To travel across Flexibility to plan your holiday across 61 BEAUTIFUL RESORTS
Slide 13: Value Proposition
Value Proposition Price* Benefits for Members Leisure = Living Huge value in 25 years Vacation = Life of membership Program 5,98,600 5,07,000 Access to increasing Resort 3,67,800 count at no incremental cost 1,99,200 Unique & Immersive experiences and 1,35,000 spacious family accommodation Prepaid 2
Slide 14: Destination Network
Destination Network Inventory Exchange Program (IEX) 61 Resorts in 33 Resorts in 103 Partner Hotels 4300 Resorts in India & South Europe across Asia, 110 countries East Asia Europe & US 13
Slide 15: MHRIL Resort Network
MHRIL Resort Network India – 56 destinations UAE & Asia – 5 destinations Presence at the following International Destinations Bangkok Dubai Kuala Lumpur Singapore Srilanka 14
Slide 16: Resort for all generations - Kids
Resort for all generations - Kids 15
Slide 17: Resort for all generations – Parents/ Couples
Resort for all generations – Parents/ Couples 16
Slide 18: Resort for all generations – Parents/ Grandparents
Resort for all generations – Parents/ Grandparents 17
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Slide 20: Resilient Business Model
Resilient Business Model Income Admission Fee Annual Subscription Fee Resort - Members from Financing Resort - FIT Interest Recurring Revenue Streams : ASF*, Resort Income Value Creation Upfront Admission Fee Value Realized Residual Value*: Built-in Multiple Annuity Streams Opportunity for Upfront 2
Slide 21: Revenue Mix
Revenue Mix IND AS 18 IND AS 115 2% 1% 2% 3% 4% 5% 8% 7% 8% 9% 9% 12% 19% 18% 19% 20% 21% 27% Under IND AS 115 16% 18% 17% Cumulative 19% 19% member base contributes to 23% 67% of total income. 55% 56% 53% 50% 48% 33% FY'15 FY'16 FY'17 FY'18 FY'19 FY'19 VO Income Resort Income ASF Income Interest No
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Slide 23: Club Mahindra Product Portfolio
Club Mahindra Product Portfolio • The 25-year core Club Mahindra product, • To help empty nesters enjoy the life focused on families stage when they are time-rich & • Sweet spot of 32 year+ audience with kids money-rich • To remain focus and mainstay of MHRIL CMH 25 • Points-based flexible product .
Slide 24: Extending our Target Group
Extending our Target Group GoZest! CMH 25 Bliss Targeting basis 25-32 years 32-50 years 50+ years different age segments • 3 years of exclusive • Family bonding for a lifetime • Bond with spouse over Targeting basis experiences • Experience India’s diversity 10 golden years different • Unexplored de
Slide 25: Segment specific targeting
Segment specific targeting GoZest! CMH 25 Bliss Digital savvy & believers of try before buy Family focused, experiences with families Socially strong, professionally successful & friends In-resort sales and digital outreach Prospect out reach, digital outreach Club alliances, gated resident communit
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Slide 27: Member Demographics
Member Demographics FY 04 FY 19 < 30 years age bracket was 2% Which has grown to 12% Age Profile > 50 years age was ~28% Which now stands at ~15% Only 10% of the primary members were This has doubled to 22% in FY 19 Gender Mix females in FY 04 Occupation ~50% of new members were businessmen Which ha
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Slide 29: Member Journey – Then and Now
Member Journey – Then and Now THEN NOW 7 days of holidays every year + • Inventory exchange program with partners • Car rentals • Flight deals • Curated vacations 7 days of holidays every year • In City experiences/ Dreamscapes + Option to subscribe to “Club M Select” 28
Slide 30: Technology to enable Pre Sales journey
Technology to enable Pre Sales journey Validation & Appointment Booking Then Now – Sales App Now – Sales App Manual allocation of leads and appointments Integrated with existing CRM software Easy monitoring of the sales funnel with minimal leakages
Slide 31: Technology to enable Pre Sales journey
Technology to enable Pre Sales journey Product Demonstration Now – Sell Smart Now - Sell Smart Then Automated recommendation / nudges to Responses to Basic questions captured. the sales rep for product and offers Transparency established Offer calculations and presentation of the value explained by
Slide 32: Improved Booking Experience Through Recommendation System
Improved Booking Experience Through Recommendation System Resort Recommendations in Website Interface Resort Recommendations in Mobile App • Improving discoverability of resorts helping in demand smoothing and improving booking experience • Real-time chatbot integration of resort recommendations 31
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Slide 34: Levers of Growth
Levers of Growth Increasing Geographic Reach Innovating Acquisition Member Engagement Digitization and Analytics 33
Slide 35: Increasing Geographic Reach
Increasing Geographic Reach Segmentation based on active member base & new member additions for specific engagement plans : Priority Markets • A decade ago, top 17 cities contributed to 60% of member Target alternate target segments and additions. Today, top 17 contribute to 40% sales. existing memb
Slide 36: Expanding the Global Footprint| International Markets
Expanding the Global Footprint| International Markets EXISTING MARKETS - 9 NEW MARKETS - 3 KUWAIT UAE QATAR BANGLADESH BAHRAIN Expanding into New OMAN International Markets SAUDI SRI LANKA High population MALAYSIA of Indian expats KENYA INDONESIA Vacation Ownership is a unique offering SOUTH Exclusi
Slide 37: Levers of Growth
Levers of Growth Increasing Geographic Reach Innovating Acquisition Member Engagement Digitization and Analytics 36
Slide 38: Innovations in Acquisition Through Digital
Innovations in Acquisition Through Digital Targeted Lookalikes of auto customers owning premium vehicles or Amex Cards on Facebook Automated Chatbots collect details required for lead qualification. This eliminates costly and time consuming manual effort Marketing Technology Platform to get unified
Slide 39: Innovation in Alliances for Acquisition
Innovation in Alliances for Acquisition First ever third party tie-up with Hamleys for their Christmas promotion. Customers could shop and win a trip to NASA. Specific campaign targeted to elite clientele of Mahindra XUV 500 who are a part of their Purple Club. India & Dubai Kids fashion Week – mult
Slide 40: Improving Referrals
Improving Referrals Driving a Servicing Mindset via Chatbot introduced to generate 1 4 Member Meets better quality referral leads Create opportunities for For member engagement, members giving references 2 platforms such as Member Family 5 in a non-intrusive manner events are organized regularly thr
Slide 41: Cost of Acquisition Trends
Cost of Acquisition Trends % Cost of Acquisition of Member 26.1% 25.1% 25.3% 23.6% Analytics, lead scoring and better sourcing have improved conversions 2016 2017 2018 2019 40
Slide 42: Levers of Growth
Levers of Growth Increasing Geographic Reach Innovating Acquisition Member Engagement Digitization and Analytics 41
Slide 43: In Resort - Signature Dining
In Resort - Signature Dining Dine by the Kosi river at Corbett Dine by the mountains at Naukuchaital Cruise Dining at Ashtamudi Dine at a mud house in Kanha Ghar Ka chula at Binsar Dinner by the pool at Virajpet 42
Slide 44: Specialty Restaurants
Specialty Restaurants Our flagship specialty restaurant Indulge in the flavours of Italy Barbeque Bay offers our guests a with Aromi DI Italia and enjoy wide variety of BBQ dishes authentic Italian Cuisine An open air specialty sea food An Asian specialty restaurant restaurant on the beach with a wh
Slide 45: In Resort - Experiential Activities
In Resort - Experiential Activities Culture immersion at Udaipur Adventure Activities at Virajpet Plantation walk at Virajpet Pottery Class at Udaipur Nature Trek at Kanatal Puppet Show at Kumbhalgarh 44
Slide 46: Club M Select – Engagement through Privileges
Club M Select – Engagement through Privileges Hotel deals Up to 40% off across 4 lakh+ hotel options around the world Gourmet dining Offering a 365-day 25% flat discount on the overall bill at fine dining restaurants engagement platform for members across dining, Cruises travel & lifestyle 13% cashb
Slide 47: Unique Experiences through Dreamscapes
Unique Experiences through Dreamscapes Charcoal painting Yacht sail Paragliding Member-exclusive pricing Experiences spanning all domains – something for River Rafting everyone in the family 60 2400+ 46
Slide 48: Curating Vacations to Increase Holiday Options
Curating Vacations to Increase Holiday Options Member-exclusive pricing Curated vacation experiences to increase members’ holiday options More engaged members, seek Club Mahindra for all vacationing needs Curated Experiences at special • Adventurous Leh and Ladakh price for members • Discover Greece
Slide 49: Heart to Heart
Heart to Heart Caricature Henna Tattoo Meet the Celebrities Customer Engagement • Club Mahindra’s unique member connect initiative to drive engagement and referrals • Connected with 18,000+ families across the length and breadth of the country from key metros to Tier I and Tier II cities ➢ Tier I: M
Slide 50: Levers of Growth
Levers of Growth Increasing Geographic Reach Innovating Acquisition Member Engagement Digitization and Analytics 49
Slide 51: Analytics Driven Lead Scoring
Analytics Driven Lead Scoring Already Implemented in FY 19 Implementation planned in FY 20 Lead Nurturing through Analytics Data enrichment & Machine Learning based lead scoring Analytics has been used to Data enrichment and machine learning is likely to improve identify high potential leads that sa
Slide 52: Digitising Consumer Journey
Digitising Consumer Journey Reservation of Current & advance Tailormade Resort Pre- booking of Onboarding Resorts EMI, ASF Payment Recommendation Resort Services Offline ✓ ✓ ✓ ✓ ✓ Online ✓ ✓ ✓ ✓ ✓ Making the whole consumer journey on digital platforms imparts transparency, speed and quality 51
Slide 53: Mobile App – Engagement Platform
Mobile App – Engagement Platform No. of Bookings Payment Collected through Mobile App 1,29,926 1,91,324 (+ 47%) 45.70 Cr. 80.21 Cr. (+ 76%) FY 18 FY 19 FY 18 FY 19 App Bookings Contribution (Vs. Web) Pre-Check-ins through Mobile App 35% 48% (+13 pp) 6,978 8,267 (+ 18%) FY 18 FY 19 FY 18 FY 19 No. of
Slide 54: Pre-Purchase
Pre-Purchase Resort e-Commerce - Pre-book activities, F&B What is resort e-Commerce? • Ability to pre-book resort services like meal, spa, activities and experiences online • Easy and convenient transaction. Why e-Commerce? • Shift in consumer behaviour from offline to online • To increase Resort re
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Slide 56: Inventory Addition
Inventory Addition Greenfield/ Brownfield New land banks at multiple unexplored destinations Existing resorts have additional land that can be utilized for further expansion Lease Continue to add inventory through leasing route Optimizing Lease to own ratio for capital efficiency Resort Flexibility
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Slide 58: Awards & Accolades
Awards & Accolades Most Popular Resort Chain, 2019 Significant Achievement in HR Excellence Companies with Great People Managers Among Top 50 Companies ASQ Sectoral Award - Hospitality, 2018 Best Companies to work for in India TISS Leapvault – Gold Award Winners For Member Among Top 50 Loyalty Compa
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Slide 60: Key Strategic Priorities
Key Strategic Priorities Demand generation and member engagement to drive cumulative member base growth Enhance value proposition through immersive experiences, unique benefits & privileges for Club members New product offerings to target diverse segments Drive member satisfaction & increased revenu
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Slide 62: Occupancy Trend
Occupancy Trend Occupancy Trend 85% 85% 82% *83% 81% FY 15 FY 16 FY 17 FY 18 FY 19 *Low Occupancy due to unprecedented floods in Kerala & Coorg in August 61
Slide 63: Income Trend
Income Trend VO Income Resort Income IND AS 18 In Crs +6% In Crs +14% 583 209 220 539 545 557 190 173 444 132 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 ASF Income Interest & Others In Crs In Crs +11% +14% 109 240 89 93 210 217 173 64 67 156 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 6
Slide 64: Performance Trend
Performance Trend IND AS 18 Total Income EBITDA Margin PBT Margin In Crs 21% +10% 1170 25% 25% 1090 1094 24% 24% 24% 19% 964 18% 808 17% 16% FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 63
Slide 65: Profitability
Profitability IND AS 18 Rs. In Crs PBT Rs. In Crs PAT 156 241 +19% +23% 131 134 201 207 114 168 79 105 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 64
Slide 66: Operating Cashflow continues to grow
Operating Cashflow continues to grow Rs In Crs 400 350 332 300 291 250 266 Rs. 1,005 Crs Operating cash flow from FY16 200 to FY19 150 116 100 50 0 FY16 FY17 FY18 FY19 65
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Slide 68: VO Deferred Revenue
VO Deferred Revenue IND AS 115 Movement of VO Deferred Revenue Rs Crs 6,667 Rs Crs +5% VO DEFERRED REVENUE MOVEMENT Particulars FY 20 FY 21 FY 22 FY 23 FY 24 5,107 Opening Balance 5,107 5,476 5,817 6,129 6,412 Addition during the year 713 713 713 713 713 VO Income Recognised during the year (344) (3
Slide 69: VO Revenue Recognition
VO Revenue Recognition IND AS 115 VO Revenue Recognition Rs Crs Rs Crs VO REVENUE RECOGNITION 458 Particulars FY 20 FY 21 FY 22 FY 23 FY 24 Member Addition assumed at FY'19 levels (Nos) 18,377 18,377 18,377 18,377 18,377 +8% VO Revenue Recognised as per previous year 315.46 343.98 372.50 401.01 429.
Slide 70: ASF Revenue
ASF Revenue IND AS 115 ASF Revenue Rs Crs Rs Crs ASF REVENUE Particulars FY 20 FY 21 FY 22 FY 23 FY 24 411 Member Addition assumed at FY'19 levels (Nos) 18,377 18,377 18,377 18,377 18,377 +9.5% ASF Revenue Recognised as per previous year 261.40 289.61 318.68 348.61 379.44 Assumed ASF Price Increase
Slide 71: Resort Income
Resort Income Room Additions Resort Income in Nos Rs in Crs +14% 220 5,000 ~ 209 190 41 36 173 30 27 3,472 3,595 3,152 132 2,816 2,879 14 129 134 120 109 88 37 40 44 44 29 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2015 2016 2017 2018 2019 Actual Estimated Room F&B Holiday Activities 70
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Slide 73: Key Facts
Key Facts ▪ Established in 1986, 30th anniversary in 2016 ▪ Holiday Club Resorts is the largest vacation ownership company in Europe and the leading leisure travel company in Finland ▪ A total of 33 resorts • 25 in Finland, including 7 Spa Hotel resorts • 2 in Sweden, including 1 Spa Hotel resort •
Slide 74: Appointment of new CEO (w.e.f 1st July 2019)
Appointment of new CEO (w.e.f 1st July 2019) • Ms. Maisa Romanainen comes with 29+ years of experience in retail Ms. Maisa Romanainen and consumer space. • She has worked at leadership levels at Stockmann Plc and VR Group. In her 18 year long career at Stockmann, she was successfully leading departm
Slide 75: P&L
P&L * Nos are as per FAS Accounts PROFIT AND LOSS STATEMENT FOR THE GROUP (Euro in Mn) Particulars Oct' 14 to Mar'16 FY 17 FY 18 FY 19 (18 Months) (12 Months) Turnover 183.38 155.03 158.85 154.56 Other operating income 12.88 6.43 6.19 6.03 Operating Profit 8.55 5.86 12.03 7.30 Less: Depreciations an
Slide 76: COMMENTS (2018-19)
COMMENTS (2018-19) ❑ In Sept 14, at the time of acquisition, debt in HCRO Books was 51.7 m€ which as on Mar 19 stands at 22.8 m€ ❑ HCRO has earned a revenue of 154.6 m€ (158.9 m€) and made a PAT of 0.5 m€ (4.7 m€). ▪ Turnover decreased by -4.3 m€ compared to prior year. • Exceptionally warm summer •
Slide 77: Key Takeaways
Key Takeaways ▪ Strong and Resilient Business model (Growing cumulative member base generates multiple annuity revenue streams) ▪ Strong balance sheet (Robust operating cash flows will support growth in room inventory without taking recourse to debt) ▪ Focus on experience ecosystem, technology and a
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