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- Mahindra Holidays & Resorts India Limited operates Club Mahindra, India's largest vacation ownership brand, with over 170,000 members and 40 resorts across India and overseas.
- Club Mahindra members pay an upfront fee and annual charges for 25 years of access to 7 days of accommodation annually. However, the value proposition may have eroded over time with stagnating new memberships.
- To maintain high past growth rates, Club Mahindra aims to examine how the vacation ownership category and consumer behavior is evolving, understand what deters consumers, and reevaluate their target market and strategies.
- Mahindra Holidays & Resorts India Limited operates Club Mahindra, India's largest vacation ownership brand, with over 170,000 members and 40 resorts across India and overseas.
- Club Mahindra members pay an upfront fee and annual charges for 25 years of access to 7 days of accommodation annually. However, the value proposition may have eroded over time with stagnating new memberships.
- To maintain high past growth rates, Club Mahindra aims to examine how the vacation ownership category and consumer behavior is evolving, understand what deters consumers, and reevaluate their target market and strategies.
- Mahindra Holidays & Resorts India Limited operates Club Mahindra, India's largest vacation ownership brand, with over 170,000 members and 40 resorts across India and overseas.
- Club Mahindra members pay an upfront fee and annual charges for 25 years of access to 7 days of accommodation annually. However, the value proposition may have eroded over time with stagnating new memberships.
- To maintain high past growth rates, Club Mahindra aims to examine how the vacation ownership category and consumer behavior is evolving, understand what deters consumers, and reevaluate their target market and strategies.
Mahindra War Room 2014 Leisure & Hospitality Sector Caselet
Broadvision Perspectives Client Confidential Page 1 of 2
MAHINDRA LEISURE & HOSPITALITY SECTOR CLUB MAHINDRA BUSINESS
Mahindra Groups Leisure & Hospitality Sector comprises Mahindra Holidays & Resorts India Limited (MHRIL) which offers Club Mahindra Resorts and Mahindra Ocean Blue Marine that manages the Odyssea Luxury Boats business. This caselet pertains to the Club Mahindra Business and is the only caselet in the Leisure & Hospitality Sector.
BUSINESS BACKGROUND
Mahindra ventured into the Leisure & Hospitality Sector in 1996 by opening the first Club Mahindra Resort in Munnar, Kerala. At that time, the industry was going through a crisis wherein the market leader was in a severe financial distress while most of the other players proved that they were fly-by-night operators out to make a quick buck sell the deal and then not deliver. Basically the category had acquired a bad reputation. In this environment Mahindra saw an opportunity and aspired to bring a change to the business, by bringing a legitimate, high quality vacation ownership offering to the Indian consumer And as the saying goes the rest is history! Club Mahindra today is Indias No.1 Vacation Ownership brand targeting Indian families and has over 170,000 members. It has built a network of 40 exquisite resorts in some of the most picturesque locations in Sikkim, Corbett, Missourie, Pondicherry, Goa, Ooty, Gangtok, Binsar, Dharamsala, Mashobra, Naukuchiatal, Thekkady, Masinagudi, Sasan Gir, Manali, Kumbalgarh, Kanatal, Coorg, Madikeri, Kandaghat, Cochin, Kodaikanal, Ashtamudi in India, and in overseas locations such as Dubai, Bangkok, Sri Lanka and Malaysia.
LIVE BUSINESS CHALLENGE
Club Mahindra members pay an upfront membership fee and an annual charge over the 25 year tenure of the membership. This entitles the member to 7 days holiday at any Club Mahindra resort every year over the tenure of the membership. The members can take this holiday during a certain season and in a room type that they originally choose to purchase as part of the membership. However the membership plan provides flexibility to members to be able holiday in a season and room type different from what they own subject to certain rules. Club Mahindra is also affiliated to RCI, the worlds largest Vacation Ownership affiliation and exchange organization. Club Mahindras members can use their membership to holiday at over 6500 resorts worldwide that are part of the RCI network, for a small transaction fee.
The Mahindra Group has brought several innovations to the timeshare space - the resorts bring a truly rich vacation experience that includes food and beverages, local sightseeing and a host of activities for the entire family. MHRIL has also made significant investment in state-of-the-art IT systems to streamline backend operations for a smooth and efficient management of a large customer base. Mahindra War Room 2014 Leisure & Hospitality Sector Caselet Broadvision Perspectives Client Confidential Page 2 of 2
Club Mahindras 16 branch offices supported by 34 sales offices and 208 Franchisees across India. Club Mahindra currently has a capacity of 2410 rooms and delivered an average occupancy at 83% for the financial year 2013-14.
Club Mahindra recently acquired 18.8% stake in Finland based Holiday Club Resorts Oy with a right to increase ownership over 2 years. Holiday Club Resorts Oy is a leading vacation ownership company in Europe with 32 resorts across Europe and a membership base of 50,000 families. Once full ownership is achieved, the combined entity has the potential to be the largest vacation ownership company in the world, outside of USA.
The Indian tourism industry has grown significantly in the last decade, contributing to 2% of the GDP at INR 2.17 Lac Crores in 2014. Estimates indicate that this figure may grow to INR. 4.35 Lac Crores by 2024. There are over 740 million domestic travelers in India, almost the entire population of Europe. However the vacation ownership industry in India represents a very small fraction of the larger hospitality market. Moreover while the tourism industry is growing, the vacation ownership category is stagnant at best in terms of net new memberships added. As the market leader Club Mahindra is most affected by this. The same products and strategies that were working until 3 years ago dont seem to be as effective anymore. Is there a fundamental shift in the market since it is not as if Club Mahindra is not losing share to a competitor? It is probably reasonable to assume that perhaps the value proposition of Vacation Ownership products in general and Club Mahindras own offering in particular, may have somewhat eroded over time.
MHRIL is keen to examine How the Vacation Ownership category in India will evolve over the next few years, especially in the context of the changing consumer demographics, aspirations, needs and behavior? What is deters consumers from opting for the vacation ownership model in general and Club Mahindra in particular? What should be Club Mahindras strategy if it wishes to maintain the high growth (25%+) that it experienced over the past many years? Reexamine the target market based on segmentation, positioning, product design, sales & marketing strategies etc.