Mahindra Holidays & Resorts India Ltd. (MHRIL), the leading leisure hospitality provider and operator of Club Mahindra, has announced a significant reduction in its advertising and marketing expenditure (adex) for the fiscal year 2025. The company’s adex plummeted by a substantial 26.4% year-on-year, settling at ₹156.7 crore, down from ₹212.3 crore in FY24, as revealed in its latest FY25 annual report. This strategic cut in marketing spend has coincided with a notable increase in the company’s profitability, signaling a potentially more efficient approach to customer acquisition and brand promotion.
Despite the sharp reduction in advertising outlays, Mahindra Holidays reported a robust financial performance in FY25. The standalone profit after tax (PAT) soared to ₹200 crore, an impressive increase compared to ₹180.6 crore in the previous fiscal year. This 11% growth in standalone PAT suggests that the company has effectively optimized its marketing channels or leveraged other growth drivers to maintain, if not enhance, its business momentum.
The total income for MHRIL stood at ₹2,910 crore in FY25, with revenue from resorts specifically surging by 8% to ₹396 crore. This growth in resort revenue, coupled with stable occupancy rates of approximately 84% on an expanded inventory base, indicates a healthy demand for their holiday offerings.
Strategic Focus on Expansion and Operational Efficiency
Mahindra Holidays’ FY25 strategy was characterized by a strong focus on network expansion, adding 520 new room units across both international and domestic destinations. The company inaugurated seven new resorts in key locations such as Bharatpur (Rajasthan), Pavagadh (Gujarat), Mysuru (Karnataka), Patkote (Uttarakhand), Chumbi (Sikkim), Agra (Uttar Pradesh), and Dindi (Andhra Pradesh). This expansion brought their total resort count to 125 with 5,847 rooms, positioning them firmly on track to achieve their ambitious target of 10,000 units by FY29-30, as stated by Manoj Bhat, MD & CEO of Mahindra Holidays.
For fiscal year 2026, MHRIL plans to further augment its inventory by adding over 600 rooms in locations like Ganpatipule (Maharashtra), Theog (Himachal Pradesh), Puducherry, Jaipur, and Kandaghat. Additionally, over 400 rooms are slated for enhancement in the upcoming fiscal year, indicating a commitment to improving member experience alongside expansion.
Driving Factors: Market Trends and Operational Excellence
The hospitality giant attributes its improved profitability and sustained growth, despite reduced ad spend, to several factors. The rising prominence of leisure travel, spiritual tourism, destination weddings, and conferences at offbeat locations are creating a favorable market environment. CP Gurnani, Chairman of Mahindra Holidays, highlighted the rapid growth of the travel and tourism industry, projecting its contribution to India’s GDP at approximately 9.1% in FY25. He also pointed to rising disposable incomes, increasing air passenger traffic, and a growing preference for experiential travel as key momentum drivers.
Furthermore, it is likely that MHRIL is increasingly relying on more cost-effective customer acquisition channels such as referrals, digital marketing, and direct sales, potentially leveraging technology and data analytics to optimize their outreach. The company has previously emphasized the role of technology in driving efficiencies and scale, and a focus on digital content and AI in communication and engagement. This shift could be a significant contributor to their ability to reduce traditional advertising expenditure without negatively impacting member additions or resort utilization.
The cut in adex also aligns with a broader trend seen across various sectors, where brands are re-evaluating their marketing investments and exploring more targeted and efficient ways to reach consumers. This prudent financial management, combined with strategic expansion and a buoyant travel market, positions Mahindra Holidays & Resorts for continued growth in the evolving Indian hospitality landscape.
Key Highlights:
- Mahindra Holidays & Resorts India Ltd. (MHRIL) significantly cut its advertising expenditure (adex) by 26.4% to ₹156.7 crore in FY25.
- Despite the adex reduction, MHRIL reported an 11% increase in standalone profit after tax (PAT) to ₹200 crore, along with an 8% rise in resort revenue.
- The company focused on aggressive expansion in FY25, adding 520 new room units and seven new resorts, aiming for a total of 10,000 units by FY29-30.
- MHRIL’s growth is supported by a booming leisure travel market, increased disposable incomes, and potentially optimized digital and referral-based customer acquisition strategies.