Mahindra, Sterling reinvent brands to counter competition from homestay

Two major holiday timeshare brands reposition themselves to counter growing competition from homestay, vacation rentals platforms

As Indian travelers get more experimental with their destinations and more demanding with their expectations, two of the oldest timeshare companies are reinventing themselves. Mahindra Holidays and Resorts and the Thomas Cook-owned Sterling Holidays are packing in a stack of experiences to bulk up their core offering that used to be just an apartment to get away from the madding crowd. The companies say that they are adapting to the needs of the millennial travelers; what is unsaid is that the pressure from a rapidly expanding box of travel options, from budget hotels, vacation rentals companies such as Airbnb, Oyo and homestay providers, is making it impossible not to.

Both Sterling Holidays and Mahindra Holidays and Resorts have turned the spotlight on experiences, because that is what travelers are most keen on today. Travel, click and upload is the new mantra. Thomas Cook that bought Sterling Holidays in 2014 has remodeled the original timeshare offering into a holiday company catering to a larger section of the customers while Mahindra Holidays has expanded its overseas footprint and added more experiences to its kitty. Both have lined up an extensive digital brand promotion campaign to get their new avatars across to consumers. At present the timeshare segment is around one per cent of the Rs 20 billion leisure holidays market in the country, but industry observers say  the two could raise the bar significantly, if they follow up on their promises.

‘Do more’ holidays

“We don’t want to be just accommodation and food. We are going one step beyond to create experiences,” says Ramesh Ramanathan, managing director, Sterling Holidays. Sterling initiated a brand revamp last year and is trying to position itself as a holiday brand. To that end, it has opened up its resorts to non-member customers, while the business model till a short while was to address the requirements of its member customers only. This also helps the brand fit into the holiday portfolio at Thomas Cook.

“Experience is everything and it is not just the experience of the resort. Experience from the minute the customer thinks about a holiday and he comes to our website to explore the opportunities and to what he can do during the holidays. It encompasses everything. We have been able to provide experiences across the whole spectrum of offerings,” says chief marketing officer of Mahindra Holidays, Giridhar Seetharam.

It has invested in a Bengaluru-based experience company Giftxoxo. The alliance is expected to help the brand expnd beyond the cities it has a resort in; and offer experiences in the city of residence to their member-customers across top 20 cities in India. The target is the millennial traveler, the company said. Both Sterling and Mahindra Resorts downplay the relevance of the Airbnb, Oyo. They don’t own the actual rooms, says Ramanathan and Indian travelers trust the established brands more says Seetharam.

Young and ready to travel

At the heart of the big shift in time share branding is the changing nature of demand. Industry experts say the growing number of millennial and retired travelers in the mix has forced travel companies to rethink what they offer. One of the big changes has been the duration of travel—instead of long annual vacations more people are travelling for short periods. People are doing multiple holidays and want different things from each.”The challenge is to provide them with newer experiences,” says Ramanathan.

The age of the target consumer is also coming down. Earlier the bulk of the customers were in the 35-55 age group, but they are now more within the 25-35 band at one end of the spectrum and the 50-pluses at the other end. The two are looking for different experiences and the timeshare companies are looking at ways to address the diverse set of expectations.

Interestingly while the two age groups seek a very different set of experiences when they travel, they are both digitally savvy and the companies are channeling their entire communication and branding initiatives through the digital medium. “Presently we are launching 100 short discovery films. We are putting one in every alternate day on social media. It doesn’t talk about the resort, but about the place. We would spend around, Rs 20-25 crore,” says Ramanathan.

For Mahindra Holidays almost 50 per cent of its brand spends are on the digital medium. It has also launched a mobile app and almost 80 per cent of the bookings and payments happen through the app and email, the company said. It has also set up non-intrusive digital screens across the resorts for brand promotions across its properties.

More choice, better amenities

Both Sterling and Mahindra Holidays have expanded the brand’s geographical spread. Sterling says it has refurbished its properties, around 1200 rooms, for which the occupancy was as low as 20 per cent a few years back. It has also hired 400 more rooms. Sterling says it currently has 31 resorts and around 15-20 properties and 250 acres of land. It is looking to expand this further. Mahindra Holidays has expanded its presence outside India significantly as it says Indians are increasingly seeking time away from home in South East Asia, Middle East and Europe. The company has acquired a company in Finland, which is called Holiday Club with operations in Spain, Sweden and Finland among other countries. As per the declared results last year, it has around 3,250 room nights, across 52 resorts and plans are to invest around Rs 6 billion to build an additional 600 rooms and offer a 20 per cent increase in room nights in India over the next couple of years.