India Tourist Resort Operator Mahindra Downplays Omicron Concern
(Bloomberg) -- Mahindra Holidays & Resorts India Ltd., an operator of subscription vacations, downplayed prospects the omicron coronavirus variant will cause major disruption to India’s tourism industry or the firm’s expansion plans as it eyes a bumper end to the year.
The company, a unit of the nation’s biggest utility-vehicle maker, has gained from a surge in so-called “revenge” domestic travel following a brutal second wave of infections that brought India’s health system close to collapse earlier this year. Occupancy is back to pre-pandemic levels and will likely hit upwards of 80% this quarter, Chief Executive Officer Kavinder Singh said on Tuesday.
“That’s because in India, for the time being, we do not have as many omicron cases that we have seen elsewhere, but we are definitely keeping an eye,” Singh said in an interview with Bloomberg Television’s Haslinda Amin and Rishaad Salamat. “We are not looking at omicron as a reason for us to derail our plans -- domestic leisure is bound to grow.”
Singh’s bullishness comes as omicron fuels renewed travel chaos around the world. Some nervous Indian states have restarted light restrictions as the capital Delhi and the country’s financial powerhouse Mumbai register a small, but growing number of Covid infections in recent days after the detection of omicron within India’s borders.
Nationally India is reporting just over 5,300 cases a day -- the lowest level since May 2020, which may be partly due to the country’s below average surveillance measures. However, some Indian scientists have speculated that any omicron-fueled third wave probably won’t be that devastating due to high levels of previous exposure to Covid, as well as increased vaccination rates.
Mahindra, which has sold about 258,000 memberships to date, is also moving ahead with plans to invest $150 million to $200 million to bolster its number of holiday venues, Singh said. “You can’t grow your member base unless you add resorts.”
That said the Mumbai-based company’s entry into the property management business has been delayed because of Covid and would have been “up and running by now” if it hadn’t been for the pandemic, Singh said, adding that Mahindra has pushed its launch to the June quarter.
Like many companies, Mahindra is also battling rising costs and a three-decade high of Indian wholesale price inflation. Singh said food and beverage prices at Mahindra’s resorts have risen, along with the cost of its memberships. “Inflation does affect us,” Singh said. “But I don’t expect a dip in our margins.”
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