Drive-in holidays, mantra of the season: Sterling Holidays CMD

The people’s “we will holiday” sentiments have made its ‘drive to’ destinations an attractive proposition, reflecting an upswing in last month’s membership figures.

 “The global pandemic has scarred the business prospects, but in June we have revived sales and done much more than expected. It is time to work our way around and re-build businesses. People are looking at resuming a normal life and optimism is evident everywhere now,” Ramanathan told DTNext in an interaction.

 Resorts at Lonavala near Mumbai or Mussoorie (Delhi) were seeing traction. Thekkady or Rajakkad in Kerala, Palavelli in Godavari district of Andhra, Puri in Odisha and Jaipur were also proving to be locations luring the resort crowd. In the next round, Wayanad, Mount Abu and Dharwad in Karnataka would be opened up while resorts in Tamil Nadu still await government’s instructions in this regard, he said.

 “Though Q4 of FY20 was impacted due to the pandemic and the related lockdown in the H2 of March, which happens to be the start of our high season and we lost some momentum at a crucial time, we still ended Q4 on a good note,” Ramanathan said, stating it ended with a Rs 5.3 cr EBITDA.

 Aided by a 10 per cent rise in its average room rate over the last year and a 21 per cent surge in the average membership rate over last year, the slight dips covered the sales down trend. Income reported was Rs 269.6 cr (FY19: Rs 257.1 cr). An improved cash flow to Rs 24 cr (FY19: Rs 21 cr) pulled the profit before tax of the company to be at Rs -35 cr compared to Rs -56 cr in FY19. The company has implemented pay cuts at different levels, ranging from 20 to 50 per cent on the operational front given that revenue sources had dried up. These cuts will be effective till September and having managed April to June, it is back to business. “Cash was coming in as annuities had to be collected or dues from members (EMIs). The tap was not closed totally as we kept our head above water with hybrid model of our business helping us to sustain,” Ramanathan said.

 The spike in coronavirus also led to a shift in strategy with audio and video interactions replacing the face-to-face pitches for membership sales. Emphasis on safety and hygiene protocols were in place. “We are progressively looking at the drive to model besides signing up more management contracts. Towards January, we would have added four to five such contracts,” he said, noting that an asset light approach in these tough times, without any capex allocation, would sustain business.

 Of the 38 resorts and 2,385 rooms available with it, owned resorts comprise 16 and leased ones constituting about 13 of them. The company also has sufficient land bank of 200 acres, he added