India’s Mahindra Holidays posts weak Q4 earnings on tepid international travel demand

Mahindra Holidays and Resorts India reported a more than 11% fall in fourth-quarter profit on Friday due to sluggish demand for international travel amid geopolitical tensions and cost pressures.

Mahindra Holidays’ consolidated net profit fell to 730.8 million rupees ($8.6 million) in the March quarter, from 823.6 million rupees a year earlier.

Geopolitical tensions and higher costs of travelling abroad held back consumers from taking trips in Europe.

That weighed on the company, which gets about half of its total revenue from its international business, which includes properties across Finland, Sweden and Spain. Total income at its international business unit, Holiday Club Resorts (HCR), fell to 39.7 million euros ($45 million) from 41.9 million euros a year ago.

Mahindra & Mahindra, banks hold up Indian shares’ record rally

However, surging spending on local leisure travel amid the government’s stated goal of making India one of the top five global tourist destinations by 2030, partly offset the decline in international business.

While domestic hotel occupancy dipped to 84.6% from 87.3% a year ago, revenue from the segment rose 5.7% to 4.03 billion rupees in the quarter, as people splurged more.

Overall revenue from operations fell 2.6% to 7.79 billion rupees owing to a 9% fall in the company’s international business.

Shares of Mahindra Holidays, which offers resorts and sightseeing packages through its “Club Mahindra” membership and generates revenue through membership fees, closed 5.4% lower ahead of the results.