Mahindra Holidays & Resorts India Ltd (MHRIL), known for its flagship brand Club Mahindra, has announced plans to add 1,000 rooms by March 2026 to meet growing demand in the tourism and hospitality sector. The company, which currently operates 5,698 rooms across 126 resorts, is also set to introduce 15 new destinations over the next five quarters. With supportive measures announced in the Union Budget 2025-26, including improved infrastructure and the development of 50 key tourist destinations, Mahindra Holidays aims to capitalize on the sector’s growth momentum.

Expansion Strategy: New Rooms and Destinations

MHRIL is accelerating its capacity expansion with a robust plan to add rooms and develop new properties in key locations across India.

1,000 New Rooms: The company will increase its room capacity by 17-18% by FY26.
Current Expansion: In the first nine months of FY25, 371 rooms were added, surpassing the total number added last year.
New Destinations: The company is planning 15 new locations over the next five quarters, reflecting its aggressive growth strategy.
Managing Director and CEO Manoj Bhat emphasized that the rapid pace of expansion is necessary to meet rising consumer demand for high-quality resorts and holiday experiences.

Ongoing Greenfield and Brownfield Projects

Mahindra Holidays is focused on both greenfield projects (new developments) and brownfield expansions (upgrading existing properties).

Greenfield Developments:

A 236-key property at Ganapatipule, Maharashtra.
A 157-room resort at Theog, Himachal Pradesh.
Brownfield Expansions:

Additional capacity at the Kandaghat resort in Himachal Pradesh.
Expansion efforts at the Jaipur resort.
The company is also targeting a long-term milestone of 10,000 rooms by FY30, positioning itself to handle sustained demand for high-end leisure experiences.

Demand Trends and Market Outlook

According to Bhat, demand trends remain strong, with occupancy rates for Q3 FY25 standing at 84.2%, slightly higher than the same period last year. He noted that rising occupancy levels and the addition of new destinations have contributed to ongoing momentum.

Consumer Demographics: Club Mahindra’s primary customer base includes upper-income individuals who pre-pay for holiday packages, ensuring steady business.

Shorter, Frequent Holidays: Enhanced road infrastructure has encouraged people to take shorter but more frequent vacations, further supporting demand growth.

Bhat expressed confidence that these trends will remain intact as the company moves into Q4 and beyond.

Boost from Budget 2025-26 Announcements

The Union Budget 2025-26 includes several measures aimed at promoting tourism and infrastructure development, which are expected to significantly benefit Mahindra Holidays and the broader hospitality sector.

Tourism Development: The government has committed to collaborating with state governments to develop 50 top tourist destinations, which will increase footfall in key areas.

Enhanced Connectivity: Investments in infrastructure, including improved roads, airports, and railways, will make travel easier, encouraging more frequent domestic tourism.

Workforce Skilling: The budget also prioritizes skilling programs to support job creation in the tourism and hospitality sectors, which will help sustain industry growth.

Bhat highlighted that these initiatives align with last year’s reforms, reinforcing a long-term focus on tourism-led economic development.

Impact of Revised Income Tax Regime

The budget’s revised tax slabs under the new income tax regime are expected to increase disposable income for middle and upper-income households.

Increased Purchasing Power: With more cash in hand, salaried professionals may spend more on leisure activities, including vacations and resort stays.

Higher Consumer Spending: Bhat anticipates that this increased spending capacity will contribute to sustained industry expansion, benefiting hospitality players like Mahindra Holidays.

Key Growth Drivers for Mahindra Holidays

Several factors are expected to drive Mahindra Holidays’ growth trajectory over the coming years:

Aggressive Expansion: The company’s plan to add 1,000 rooms by 2026 is a testament to its confidence in demand stability.
Strategic Location Development: Investments in popular and emerging tourist destinations will enhance Club Mahindra’s brand visibility and customer reach.
Government Support: Budgetary policies focused on infrastructure and tourism development are likely to attract more domestic and international tourists, supporting long-term business growth.

Competitive Landscape and Positioning

Mahindra Holidays operates in a highly competitive environment, facing challenges from both domestic and international hospitality brands. However, its strong presence in India and focus on family-friendly resorts provide a distinct edge.

Competitors: Companies such as Sterling Holidays and Taj Hotels compete with Club Mahindra in offering premium vacation experiences.

Differentiation: MHRIL's emphasis on customer loyalty, pre-paid vacation plans, and diverse resort offerings helps it maintain a strong market position.

Summary Table of Key Initiatives

Travel Sector Companies Expecting Strong Tourism in Coming Years

Mahindra Holidays is positioned for robust growth in the coming years, driven by strategic expansions, favorable demand trends, and government support for the tourism sector. The company’s ability to adapt to evolving market dynamics, invest in infrastructure, and enhance customer experiences places it at the forefront of India’s hospitality industry. With rising occupancy rates and a strong pipeline of new projects, MHRIL is poised to capitalize on the nation’s growing appetite for quality leisure experiences.