Since the acquisition of Sterling Holiday Resorts in 2014, Thomas Cook has incurred a capex of ₹90 crore towards renovating the resorts of Sterling Holidays and is now exploring greenfield properties for the holiday company.

Addressing the 39th AGM, Madhavan Menon, Chaiman & Managing Director, Thomas Cook, said: “We have renovated all the original resorts that we acquired, which was 16 resorts and the rest was on lease. So far, we have spent a capex of ₹90 crore and now we are in the early stages of examining greenfield projects which has still not been finalised. Being a hotel as well as a resort, we need to upgrade on an ongoing basis.’’

Equal revenues

However, there were some resorts which were incomplete and Thomas Cook has included them as part of its land bank without doing any renovation on these properties.

With current occupancy rate at 62 per cent, Sterling Resorts would be seeking equal revenues from the time share and non-time share part of the business.

“Our attempt is to keep it at 50 per cent on both sides. There will be 50 per cent given to holiday makers and the rest to time share members. But there are some resorts which have high demand due to popularity or limited number of rooms. Though we try to maintain a 50:50 share, at times there is need for adjustment,’’ he said.

New properties

During the year, Sterling Holiday Resorts added two new properties at Agra and Kufri. In addition, four resorts with 53 acres of freehold land and 50 acres of leasehold land at five prominent holiday destinations in proximity to Mumbai were added due to its acquisition of Nature Trails Resorts. Sterling’s total resort count was at 30 as of March 31, 2016.

Sterling reported a 25 per cent increase in operating income over the last fiscal. It also expanded the number of operational rooms from 1,254 to 1,914.

Funding refurbishment

Ramesh Ramanathan, Managing Director, Sterling Holiday Resorts, said: “While the refurbishment of resorts will get completed, it would be the last year that Thomas Cook would be spending on us. All future refurbishment of resorts will get funded by Sterling Resorts.’’

Despite being a subsidiary of Thomas Cook, Sterling Resorts is an independent entity and has been selling its holidays through OTAs which includes players such as MakeMyTrip and Goibibo. “Almost ₹₹25-30 crore of room revenue come from the OTAs for our non-time share business. Thomas Cook’s online site does not sell our properties,’’ said Ramanathan.

However, Sterling Resorts would not be getting on the platform of room aggregators like Oyo rooms and Vista rooms with whom Thomas Cook has recently forged alliances. “We do not need Oyo Rooms since we are not present in cities,’’ explained Ramanathan.

Meanwhile, Thomas Cook has been adopting a clicks & bricks omni channel strategy and has assigned 50 per cent of its marketing budget in developing and investing on its digital properties and one-stop shop portal – thomascook.in with e-business contributing 11 per cent of the company’s total revenues.

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