Mahindra Holidays’ Q4 Profit Declines Amidst Global Uncertainties

Mahindra Holidays and Resorts India announced a drop in fourth-quarter profit exceeding 11% on Friday. This downturn is attributed to a decrease in international travel demand influenced by geopolitical instability, alongside growing operational expenses.

The company’s consolidated net profit for the quarter ending in March amounted to 730.8 million rupees ($8.6 million), a decrease from the 823.6 million rupees recorded in the corresponding period last year.

Ongoing geopolitical tensions, coupled with increased expenses related to international travel, have discouraged consumers from planning vacations in Europe.

This situation has adversely affected the company, which relies on its international business for approximately half of its total revenue. Its international portfolio includes properties located in Finland, Sweden, and Spain.

The total revenue generated by its international business division, Holiday Club Resorts (HCR), decreased to 39.7 million euros ($45 million) from 41.9 million euros in the previous year.

However, the escalating expenditure on domestic leisure travel, fueled by the government’s initiative to position India as a leading global tourist destination by 2030, partially mitigated the decline in international business.

Despite a slight dip in domestic hotel occupancy rates from 87.3% to 84.6% compared to the previous year, revenue from this sector experienced a 5.7% increase, reaching 4.03 billion rupees during the quarter, driven by increased consumer spending.

Overall revenue from operations saw a 2.6% decrease, totaling 7.79 billion rupees, primarily due to a 9% reduction in the company’s international business.

Shares of Mahindra Holidays, which provides resort stays and tour packages through its “Club Mahindra” membership program and generates revenue through membership fees, concluded the day 5.4% lower in anticipation of the financial results.