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Sterling Holidays plans doubling portfolio through asset light model
At present, around 50% of the company’s revenue comes from its membership business. The asset light model was adopted to bring scale and expand into new holiday destinations and markets.
Chennai-based hospitality firm Sterling Holidays, which recently moved into an asset light model, is doubling its hotel portfolio to around 4,800 rooms with plans to enter new leisure destinations in the country, said a top company executive.
The asset light model was adopted to bring scale and expand into new holiday destinations and markets where homestay brands like Airbnb have opened up in the last two-three years, said Ramesh Ramanathan, managing director, Sterlings Holidays Resorts Ltd.
“Earlier we used to build our resorts. Now we are doing management contacts. It will allow us to scale our supply. The idea is to double it by 2023,” Ramanathan said over the phone.
In the last three-four years, the company has also shifted from operating a pure vacation ownership model to a regular hotel business. At present, around 50% of its revenue comes from its membership business. “We think there is a space in the country for a pure holiday brand. While we grow our membership business, the non membership model allows us to scale much faster,” Ramanathan said.
The company has signed six new hotels, each in Igatpuri and Karjat (near Mumbai) Konasema (Andhra Pradesh) , Thekkady and Guruvayur (Kerala) and Mysore. Five out of the six new hotels are through management contracts.
“We are taking an optimistic view about the market (despite the slowdown in economy) and we still want to expand and the way to do it is through management contracts,” he said.
As part of its growth plans, the company has identified major leisure destinations, pilgrimages and short gateway locations as the new areas for expansion in the country.
