Saturday, August 22, 2009

Extracts from different news portals during Mahindra Holidays IPO

Light Green cells have extract from different news articles from different news portals :

In orange cells I have tried to make some sense out of it ..


Ref :

Holiday for a Lifetime July 29th

" ... On a global basis, taking all our resorts into account, we have had more than 83% occupancy this quarter and if you take our five top resorts, including Munnar, Coorg, Goa etc, we had 90% occupancy on this."

In traditional Timeshare model, timeshare rooms have 100% utilisation (as vacant rooms can directly be attributed to a member) but business model which ClubMahindra follows, who take hit of this under utilisation? Committed customer ?

Ref :

The holiday investment

Business Standard

Sarath Chelluri & Ram Prasad Sahu / Mumbai June 22, 2009, 0:13 IST

"The major chunk of revenues comes from membership fee which so far works out to an average of Rs 2.5 lakh per subscriber. This is divided into admission fee (60 per cent or Rs 1.5 lakh) and entitlement fee which accounts for the rest."

Each room a timeshare company build they can make 52 members .. that means for each rooms ClubMahindra gets (2.5 lakh x 52) = 1.3 Cr Rs from the members + 4.42 Lakh annually as ASF (based on 8500/- average ASF).

Ref :

Club Mahindra sets record for room occupancy Published on Sat, Jan 10, 2009 at 14:10 ,

Mahindra Holidays has a unique business model as it leverages the strength of both the time share business and the hotel business. In fact, 25% of the rooms are sold to hotel guests who booked their holidays directly with the resorts even though they are not Club Mahindra members. Most of these being foreign guests .This ‘mixed use’ has ensured that the occupancy across all Club Mahindra resorts continue to be high at various locations.

Mahindra Holidays and Resorts' initial public offer launched

Business Standard Press Trust of India / Chennai June 23, 2009

"He said they have seen 75 per cent occupancy rate in all their resorts last year. Six per cent were contributed from non-members alone, he added."

Recession, inflation not to affect biz: Mahindra Holidays Published on Sat, Jun 20, 2009 at 14:16

"... Similarly on my member base, every member pays me approximately Rs 8,500 of annual subscription and that is to be multiplied by my member base, ..."

Q: Non Member Booking;s How Much Do You Reserve?

A: No, its less than 10%. But we actually had a growth in capacity because we did quite well in the charters in Goa and we have been able to open Munnar and Kombalgadh to the visitors. So I think we have seen a growth in hotel room sales from Rs 11 crore to Rs 17 crore last year.

Different news in 6 months, puts very different figures on non guest sales figures. Let’ do some math .. 17 Cr earned from hotel room sales .. let’ take average room rental @ 6500 Rs per day ..

170000000/6500 = 26154 room days

26154/365 = 71.65 rooms

Let’ take average yearly occupancy of non timeshare resorts @ 70%

Effective room needed to support 17 Cr revenue .. 71.65/.7 = 102 Rooms

What is left for members, specially in peak season or on weekends ..?


90 rooms from Ooty resort are not yet available for the members.

Friday, June 19, 2009

Club Mahindra IPO Valuation

Published Data from Mahindra Holidays' advertisement in a News Paper:

IPO Band



Asset Value


MCap (/)

paying Member


2316 Cr







2737 Cr






# ASF (Annual subscription Fee) paying Member count = ASF income/average ASF
Average ASF Value source :

While calculating these numbers equity dilution is not considered, if any!
These calculations are indicative only.
This is not an investment advice so readers should make their own conclusions.

Related post:
Before considering Club Mahindra Membership : My personal advice
What are you paying for your Timeshare Membership?
MahindraHolidays Spend ~30% of their Yearly Income..

Friday, February 13, 2009

True [Inflation Linked] cost of ClubMahindra Vacation

Idea behind this calculation is to compute per day cost for a member, that also move up according to inflation giving you true cost of your accommodation.

Main point in this calculation..

*) Assume if you have put your membership cost in a Holiday Account which earn interest, also you withdraw money at yearly interval from this account for your accommodation expenses.  During 25 years of membership you spend all your money and interest and do not receive any money at the end of 25 years.  [ See yellow cells]

*) Inflation is assumed at 7% and interest rate on your money at [inflation rate + 2% =] 9%. If you create similar table with inflation rate at 6% and interest rate at 8% or as long as rate difference is 2%, per day cost will come almost same (margin of error will be negligible).

*) It is calculated in a way that your withdrawal amount from this account is increasing with same rate as inflation (7%), as your ASF. As result last column  (per day cost) is increasing at rate as inflation or ASF. Also at the end of 25th year all your money is spent.

*) Promotional item cost is reduced from the membership cost. (cost may vary with time/membership type so proportionately adjust per night cost)

*) ASF is assumed to be increasing at rate 7% in line with our assumed inflation for simplicity, it may increase more or less as may be decided by the Mahindra Holidays time to time.

You may like to do your calculation here ::

Related post:

Before considering Club Mahindra Membership : My personal advice
What are you paying for your Timeshare Membership?
Club Mahindra at its best: from 50 to 70 consumer cases in 10 months