After a spell of relative obscurity, the timeshare market in India is witnessing a burst of activity. Club Mahindra, the leading player, has just announced the acquisition of a Finnish holiday company, while the other major player, Sterling Holidays, had earlier announced a strategic merger with Thomas Cook. The twin deals would suggest that the timeshare industry is starting to eye a bigger slice of the tourism pie.
The Mahindra Holidays & Resorts India (MHRIL) agreement with the shareholders of Finland-based Holiday Club Resorts Oy allows the company to acquire 18.8% of its stake, with a right to increase its ownership over the next two years. Holiday Club Resorts Oy has 32 resorts, 24 located in Finland, two in Sweden and six in Spain. Seven of these resorts have spa hotels with indoor water parks, three have golf courses and five offer indoor theme parks for children.
For existing MHRIL members, it means an expanded horizon. Says Arun Nanda, chairman, MHRIL: “The merger will give our existing and future members an opportunity to visit a different country. It is for the kind of tourist who has either already shopped in Milan, seen the Eiffel Tower, been to Disneyland or doesn't care about it; it’s geared more towards a family experience, as the properties have golf courses and theme parks too.”
As of now, existing Club Mahindra members will be permitted to use the new properties owned by Holiday Club just as they use the Club Mahindra properties, depending upon the availability of rooms. Other details are to be worked out after the acquisition is completed. Meanwhile, the company is also looking at expanding its domestic footprint by adding 500 rooms in the country within the next 18 months, with an investment of R500-600 crore. The company, part of the Mahindra Group, has around 1,71,000 members and operates 43 properties across India and abroad, totalling some 2,500 units.
Club Mahindra’s rival, Sterling Holidays, also took a giant stride by its merger with travel giant Thomas Cook earlier this year. “The proposed merger with Thomas Cook and the resultant fresh injection of capital will further strengthen Sterling’s market position and allow us to accelerate the pace of expansion into new holiday destinations,” says Ramesh Ramanathan, managing director, Sterling Holidays.
The timing is significant. The vacation ownership industry was growing at an average of 15% per annum, as per reports. However, the major players