Sterling Holiday to invest Rs 200cr; developing 3 new resorts

Mumbai: Sterling Holiday Resorts, a unit of Thomas Cook India, has said it will be investing about Rs 200 crore to refurbish the existing properties in the country.

"We have a capex of around Rs 200 crore for this fiscal and we have already spent 50 percent of it so far in refurbishing our existing properties," Ramesh Ramanathan, Managing Director of the second-largest vacation ownership company in the country, told PTI.

Sterling Holiday, which was taken over by travel and forex leader Thomas Cook in February last, has 1,725 rooms across 19 properties in 16 locations. It has 73,000 members who pay an average of Rs 2.35 lakh as membership fee, he said.

Asked about the growth in membership, Ramanathan said it has been expanding by around 25 percent this fiscal.

The company, an affiliate of RCI (formerly Resort Condominiums International) - the world's largest timeshare network - is developing three new properties - in Nainital (50 rooms), Corbet (40) and Sariska (40). Ramanathan did not divulge the quantum of investment into these properties.

Last fiscal, the company's sales of vacation ownership plans rose to Rs 73.2 crore, an increase of 72 percent, while total income from resort operations shot up 23 percent to Rs 43.5 crore, helping it reduce net losses to Rs 20 crore.

In February, Thomas Cook bought the vacation ownership pioneer for Rs 870 crore in a multi-layer deal under which it would initially invest Rs 187 crore through a preferential allotment, giving the tour operator around 23 percent stake in the Chennai-based firm, which was incorporated in 1986.

Billionaire investor Prem Watsa-held Thomas Cook would invest a total Rs 870 crore in Sterling, making its debut into the hospitality sector.

Founded by R Subramanian, Sterling Holiday had a smooth take off, but soon its business started to falter, resulting in huge debts and losses. In 2009, Bay Capital picked up a majority stake. While the company continues to be in red, its losses have come down in recent quarters.

According to Thomas Cook, Bay Capital would continue to hold about 2 percent in the merged entity.

Earlier this week, Mahindra Holidays & Resorts, the largest sectroal player which has 42 Club Mahindra brand of timeshare resorts across India and four overseas, said it would be investing Rs 500 crore to add 500 rooms to its existing 2,700 capacity in the current fiscal.