Own a Vacation Home

Mahindra Holidays & Resorts India (MHRIL) is into the leisure and hospitality sector which offers vacation ownership. The company operates with its flagship brand 'Club Mahindra Holidays' and other brands like 'Club Mahindra Fundays' and 'Club Mahindra Traveland'. The company has a customer base of 11.7 lakh and owns 40 resorts across India and abroad. MHRIL offers vacation ownership (VO) to its customers who pay an upfront amount to stay in their resorts for the next 25 years or as per the plan they opt for. For the astute holiday traveller, this option works well because it saves them from the increasing cost of holiday stay in future. Moreover, with the MHRIL resorts spread across the country; they can decide a holiday depending on the available resort in the vicinity. For the company, this VO model ensures that upfront they get a sum that starts at ₹2.5 lakh, which goes as investments into new resort locations and expansion. MHRIL recognises admission fees as income in the current year and then an entitlement fee, which is recognised as income that is equated over the tenure of the membership. Until such time, income is considered as deferred revenue in the balance sheet of the company. Strength MHRIL's biggest strength is its business model. The company raises the capital from its customers to develop and expand resorts and properties. By doing this, it saves itself from relying heavily on debt a

This article was originally published on November 11, 2014.