sterling holidays · price range : inr 1.95 lacs- inr ... jungle beach mountain ... resort network...

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Sterling Holidays

Investor Presentation

April 2015

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We are India’s first Vacation Ownership organization.

We are thought leaders and pioneers who defined

holidays for Indian families as early as 1986.

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Our Mission

Sterling Holidays aims to be the No.1 Holiday company in India

Sterling Holidays aims to deliver experiential holidays to multiple customer

segments in themed full service resorts located in scenic leisure destinations

thereby creating memorable holiday experiences

Sterling Holidays and its employees are committed to service excellence, good

corporate governance and sustainable development to create wealth for all

stakeholders and be a responsible corporate citizen

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Product Range

Confidential 4

Vacation

Ownership

FIT / GIT MICE

Vacation Ownership : Flexible Points Product

7 Nights & 7

Days

Every Year

For 25 Years Across

Seasons

Across

Apartments

Across

Destinations

5 Confidential

Price Range : INR 1.95 Lacs- INR 13.39 Lacs

Average Annual Subscription Fee: INR.6,000

• The 3rd generation and most contemporary product modeled on the international points

system.

• Offers ultimate flexibility of usage across seasons and apartment types.

• Access to full service resorts.

• Enables accumulation and advancing of points

• Allows transfer of membership

24 Resorts

21 Destinations

4500 Resorts Worldwide

Hotel Sales Division

• One Time Leisure holidays; potential to covert to membership

– FIT packages

– Group packages

– MICE [Meetings, Incentives, Conferences, and Exhibitions]

– Special seasonal offers

• Growing online presence

Confidential 6

Integrated Business Process Model

Confidential 7

Customer Experience Creation

(Resort Creation)

- Scenic holiday spots

- Resort design & development

Customer Experience Management

(Resort Operations)

- Full service resorts

- Value creation

- Community building

Customer Engagement

(Customer Service)

- Holiday planning & reservations

- Customer satisfaction benchmarking

Customer Acquisition

(Sales & Marketing)

- Lifestyle need-based segmentation

- Multi-channel sales initiatives

Shared Services

[IT, Accounts, HR &

Legal]

Revenue Streams

Vacation Ownership

Income

Vacation Ownership sales

ASF / AAC & Utility

Interest Income

FIT / GIT / MICE

Income

Room Income

F&B

Holiday & Health Club

Confidential 8

Unique Revenue Model Value created continuously

from a single resort unit

Confidential 9

Timeline (years) *Inflation not considered

0 25

Va

lue

Re

aliz

ed

Recurring Revenue Streams*: ASF, Usage Fee, Resort Revenues

Upfront Cash:

Admission Fee

Residual Value *:

Opportunity for 2nd

cycle - ZERO

Marginal Cost of

Inventory

Income from

Financing

Admission Fee Entitlement Fee

Resort - Members Resort – FIT Interest on EMI

Annual Subscription Fee

26

Value Creation Profile

Large Upfront Cash-flow

Built in Annuity Stream

Residual Value

Sterling

Holidays:

March 2011

Resurgence:

Strategy

&

Initiatives

Way Forward

Confidential 11

Sterling Holidays : March 2011

March 2011

• Low level of revenues

• Weak financial position with debts

• Poorly maintained resorts resulting in low occupancy and

negative customer feedback

• Lack of leadership and middle management team

• Inadequate processes and controls leading to inaccurate

reporting

• Outdated technology platforms

• Large numbers of litigation

• Highly demotivated team

Confidential 12

Key Parameters FY11

Financial Parameters:

Total Income (in INR, Mn.) 432

EBITDA (in INR, Mn.) -212

PAT (in INR, Mn.) -328

Non - Financial Parameters:

New Member additions (Numbers) 1135

Average Unit Realization (in INR, Mn) 0.107

Occupancy (%) 37%

ARR (in INR) 1531

Total number of resorts : 10 Owned & 4 Leased 14

Rooms (In nos.) 1202

Confidential 13

Resurgence : Strategy & Initiatives

14

Confidential 15

Strategic Growth

Initiatives

Build

Credibility

Increase

Cash Flow /

Revenues

Build

Customer

Confidence /

Experience

Resorts refurbishment

• Hard refurbishment : Not just paint & polish

• Complete renovation involving

– Rooms

– Back of the house

– Front of the house

– Electrical & Engineering

• An average spend of Rs. 22 – 24 lacs per room

Confidential 16

River front

Herit- age

Jungle Beach Mountain

Dindi Shridi Corbett Puri Dharamshala

Sariska Goa Manali

Thekkady Karwar Mussoorie

Daman Nainital

Gangtok

Darjeeling

Lonavala

Ooty

Yercaud

Kodai

Yelagiri

Munnar

Resort Network

Confidential 17

GOA

KARWAR

MUNNAR

THEKKADY

PURI

MANALI

MUSSOORIE

OOTY YERCAUD

DARJEELING

LONAVALA

DHARAMSHALA

CORBETT

GANGTOK

SARISKA

YELAGIRI

KODAI

NAINITAL

24 Resorts

21 Destinations

1767 Rooms

DINDI

DAMAN SHIRDI

Proposed Greenfield Projects Land Bank locations 155

Acres

Yelagiri 20

Ooty Fernhill 1

Kodai Villapatti 7.52

Kodai Lakeview 2.99

Rameshwaram 2.19

Thekkady 2.8

Munnar 7

Peermade 28.28

Coorg - Meraca 30

Coorg - Virajpet 5.75

Goa Chapora 4.51

Goa Vagator 0.99

Alibaug 3

Mahabaleshwar 5.13

Igatpuri 2.47

Bhimtal 6.6

Corbett 4.5

Gangtok 15.1

Wayanad 5.57

YELAGIRI

OOTY

KODAI

RAMESHWARAM MUNNAR

THEKKADY PEERMADE

COORG

GOA

ALIBAUG

MAHABALESHWAR

CORBETT

BHIMTAL GANGTOK

PROPOSED GREENFIELD PROJECT

LAND BANK

16 Destinations 155 Acres 2000+ Rooms

WAYANAD

Confidential 19

Refurbish resorts

Then

Now

Munnar

Terrace Greens

Confidential 20

Refurbish resorts

Then

Now

Ooty

Fern Hill

Confidential 21

Refurbish resorts

Then

Now

Kodai

By The Lake

Reposition resorts by creating

contemporary resort identities

Confidential 22

Multi-cuisine Restaurant

Specialty Restaurant

SPA

Gym


Holiday Activities Center

Bar

Swimming Pool


Kids Club

SPA

Tea & Coffee Lounge


SPA

Holiday

Activities Center

Tea & Coffee Lounge

Improvement in ARR’s and occupancy post renovation

Confidential 27

158,728 177616

201602

222281

256620

FY 11 FY 12 FY 13 FY 14 FY 15

Room nights in numbers & Occupancy

37%

40%

41%

49%

56%

CAGR : 13%

1531

1942

2194 2302

2730

FY11 FY12 FY13 FY14 FY15

Average Room Rates, INR

CAGR : 16%

Increase in F&B revenue

Confidential 28

109

163

197

247

271


F&B Revenues, INR Mn

• Introduced a wide spread of F&B options

• Increased prices of F&B

CAGR : 26%

54

125

180

255 272


Increase ASF / AAC & Utility (Maintenance) revenue

Confidential 29

ASF, AAC and Utility charges (INR Mn.)

• Increased maintenance charges by over 100%

CAGR : 50%

Enhanced holiday experience by revamping holiday

activities and introducing spa

Confidential 30

Increase in Vacation Ownership sales

• Exponential growth in new member additions and average unit realisation [AUR]

• Restart new member acquisition by setting up sales offices across India

• Appointed franchisee

• Increase in price

Confidential 31

1135

2480

3409 3650

5481


New Member Addition, Numbers

0.11

0.17

0.21 0.22 0.24


Average Unit Realization, INR Mn

CAGR : 22% CAGR : 48%

Increase in FIT / GIT / MICE business

• Set up a new HSD team

• Increased focus on FIT, GIT and MICE

• Formed alliances with leading OTA’s, tour operators & corporates

• Also set up a revenue optimisation function

Confidential 32

50192

66313

79027

92978 102620


HSD Room Nights in Nos.

81

212

320

438 467


HSD Revenue in Mn.

CAGR : 55% CAGR : 20%

Build Competent Human Capital

• Established a professional leadership team with in-depth experience in

hospitality

• Focused recruitment of qualified & industry experienced middle

management

• Increased focus on training and development across the organisation

Confidential 33

Proactive customer engagement

• Set up a state of the art call center

• Initiated and built the database of members

• Proactive holiday planning

• Resulting in increase in occupancy

Confidential 34

Integrated IT landscape in sync with our business model

Confidential 35

Customer Experience Creation Customer Experience Management

Customer Management Customer Acquisition

MS Navision - ERP Build super fast –

Standalone PMS - Prologic First IDS Fortune Next

Cloud based CRM

– Salesforce.com COPS – Home grown LMS : Salesforce.com Excel /Home grown

Support Services

Formula HR-HRMS

Tally MS Navision-ERP

Deployed Before

COPS – Home grown

Increase presence in social media

• Enhanced the website with modifications

• Established social media presence across

Facebook, Twitter, Google + and Pinterest

• Created a Sterling Blog

• Appointed a digital & social media

agency

• Appointed an ORM agency

Confidential 36

23,250

2,15,971

March '12 April '15

Substantial growth in social media

Confidential 37

Facebook Fan Count

Growth

867%

Awards & Recognition

Confidential 38

5 RCI crowned resorts

24 resorts, 1767 rooms, 21 destinations

Affiliated with RCI - A network over 4500

resorts across 101 countries

15 additional sites with a potential of

2000+ rooms

2300 strong work force

16 customer & sales offices

75,975 active customers and growing

The Sterling Advantage

Confidential 39

Financials : FY11 - FY15

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Key indicators

INR Mn. FY11 FY12 FY 13 FY14 FY 15 CAGR

New member additions (Numbers) 1,135 2,490 3,409 3,650 5,481 48%

Cumulative (Numbers) NA 63,435 66,844 70,494 75,975 -

Average Unit Realization 0.11 0.19 0.21 0.22 0.24 22%

Timeshare revenue 103 281 524 634 911 72%

Resort revenue 331 479 615 813 903 29%

Other income 6 20 30 58 100 105%

Total revenue 439 780 1,169 1,505 1,914

EBITDA -158 -148 -143 67 174

EBITDA in % -36% -19% -12% 4% 9% -

PAT -328 -413 -213 -160 5 -

PAT in % -75% -53% -18% -11% 0% -

No. of rooms (Numbers) 1,202 1,362 1,477 1,512 1,767 10%

Member Room nights sold (Numbers) 108536 111303 122575 140068 153940 9%

Non Member Room nights sold (

Numbers) 50,192 66,313 79,027 92978 102,680 20%

Total Room nights (Numbers) 158,728 177,616 201,602 242,959 256,620 13%

Occupancy (%) 37% 40% 41% 49% 56% 11%

ARR in INR 1,531 1,942 2,194 2,291 2,730 16%

Confidential

Growth Indicators

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1135

2480

3409 3650

5481


New Member Addition, Numbers

0.11

0.17

0.21 0.22 0.24


Average Unit Realization, INR Mn

103

281

524

634

911


Timeshare Revenue, INR Mn

59

316

951

1454

2280


Receivables, INR Mn

CAGR : 22% CAGR : 48%

CAGR : 149% CAGR : 72%

331

479

615

813

903


Confidential

Growth Indicators

43

Resort Income, INR Mn

1531

1942 2194

2302

2730


Average Room Rates, INR

70

124

173

236

280


Room Revenues, INR Mn

109

163

197

247 271


F&B Revenues, INR Mn

CAGR : 16% CAGR : 29%

CAGR : 41% CAGR : 41%

Confidential 44

Growth Indicators

54

125

180

255 272


ASF, AAC and Utility charges (INR Mn.)

CAGR : 50%

Financials : Profit and Loss

Confidential 45

INR Mn. FY11

FY12 % Growth FY13 % Growth FY14 % Growth FY15 % Growth

Timeshare 103 - 281 173% 524 87% 634 21% 911 44%

Resort Operations 331 - 479 45% 615 28% 813 32% 903 11%

Other income 6 20 254% 30 50% 58 92% 100 73%

Total Income 439 - 780 78% 1169 50% 1505 29% 1914 27%

Expenditure

Expense as a % of

Total Income

Expense as a % of Total

Income


Income


Income


Income

Salaries 200 46% 301 39% 579 50% 636 42%

679 36%

Timeshare expenses 152 35% 287 37% 295 25% 286 19%

489 26%

Resort expenses 226 51% 303 39% 365 31% 425 28%

458 24%

Lease rentals 21 5% 37 5% 72 6% 91 6%

114 6%

Total Expenditure 598

928

1,312

1,438

1,740

EBIDTA -158 -148 -143 67

174

Depreciation 45

48

63

88

105

Interest 22 34 13 58

31

PBT -225

-229

-218

-79

37

Exceptional Items (Net) 101 184 -5 81

32

Tax 2

-

-

-

PAT -328

-413

-213

-160

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Financials : Balance Sheet

Confidential 46

INR Mn FY11 FY12 FY13 FY14 FY 15

Share Capital 511 597 677 889 901

Share warrants - 181 - - 0

Reserves and Surplus -638 -345 -40 1,609 1673

Borrowings 309 41 295 1 0

Deferred Income 2,091 2,229 2,448 2,721 3171

Current Liabilities 394 230 451 345 419

Total Equity & Liabilities 2,666 2,932 3,831 5,565 6164

Net Block 2,284 2,232 2,728 2,999 3542

Investments 21 10 0 1,210 483

Inventories 7 12 24 28 26

Debtors 112 316 748 982 1796

Cash & Bank Balances 79 30 16 91 58

Loans and Advances 163 331 315 255 259

Total Assets 2,666 2,932 3,831 5,565 6164

Financials : Cash Flow Statement

Confidential 47

INR Mn FY11 FY12 FY13 FY14 FY15 Net Income -328 -413 -213 -160 5

Depreciation, Amortisation & Non-Cash items 167 241 2 125 168

Changes In working capital -106 -114 -11 -66 -286

Cash flow from operations (A) -267 -286 -221 -101 -112

Capital Expenditure (net) 78 -252 -538 -228 685

Net cash from investments 5 5 57 -1,117 727

Cash from Investments (B) 83 -247 -482 -1,345 42

Issuance of Shares (incl. Premium) 94 855 408 1,878 72

Increase /(Decrease) in Debt, net of repayments 108 -371 281 -357 (34)

Cash from Financing ( C) 202 484 689 1,521 37

Net Increase / (Decrease) in Cash (A)+(B)+(C) 18 -49 -14 75 -33

Closing Cash Balance 79 30 16 91 58

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Way Forward

Way forward

• Launch multiple products across VO, FIT, GIT & MICE

• Launch sales operations in the Middle East

• Revisit Brand Strategy and reposition brand

• Develop organization structure in line with Business process as against

function based

• Build resorts with varying themes

• Open resorts overseas

• Make the company a fun place to work

Confidential 49

1986 Defined Holidays

Redefining Holidays 2015

50 Confidential

PAST Vacation Ownership Company

CURRENT

Confidential 51

FUTURE

Holiday Company

Holiday Lifestyle Company

Thank You!

sterling holidays · price range : inr 1.95 lacs- inr ... jungle beach mountain ... resort network...

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