Mahindra Holidays & Resorts India Limited (NSE: MHRIL) Q2 2025 Earnings Call dated Oct. 25, 2024
Corporate Participants:
Manoj Bhat — Managing Director and Chief Executive Officer
Vimal Agarwal — Chief Financial Officer
Analysts:
Sagar Tanna — Analyst
Pankaj Kumar — Analyst
Ankit Kanodia — Analyst
Prashanth Kshirsagar — Analyst
Sukant Garg — Analyst
Sahil Vora — Analyst
Rajesh Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Mahindra Holidays & Resorts India Limited Q2 and H1 FY ’25 Earning Conference Call. [Operator Instructions]
I now hand the conference over to Mr. Manoj Bhat, Managing Director and CEO. Thank you. And over to you, sir.
Manoj Bhat — Managing Director and Chief Executive Officer
Good afternoon, good evening, everyone, and a very warm welcome to our Q2 FY ’25 earnings call.
On the call with me today, I also have Mr. Vimal Agarwal, our CFO. You can find our quarterly results and investor presentation on the exchanges and on our company website. I hope you all have had a chance to go through them.
Let me begin by talking about the overall environment. I think the overall environment continues to remain very positive. Industry level areas are trending at INR7,000 and the occupancy is at 61% as of August data. So clearly, I think the industry continues to be in a strong place. Even if you look at markers like domestic air traffic, etc., I think we are seeing a year-on-year growth of 6%. And so everything continues to be from an overall sentiment, overall number of people traveling, I think it continues to be fairly strong from an industry perspective.
Coming to our numbers. First, let me talk about standalone numbers. I think the standalone numbers, our profit grew by 14% to INR47 crores. This is on the back of several initiatives. Our total income was about INR371 crores, which was up about 12% Y-o-Y, and our deferred revenue is about INR5,685 crores. And our cash position continues to remain strong at INR1,452 crores. So, that’s really a strong quarter. And I’ll talk about some of the factors, which went into these numbers.
First, talking about sales. I think as I had mentioned last quarter also, Q2 was a quarter of adjustments in terms of looking at our entire sales engine, looking at our member profile, looking at analytics around how — what cohorts and what groups of members we want to really attract and serve well. And as part of that, I think we continued on that journey of trying to figure out what is the best way of addressing this market, what are the channels to use and what are the areas we want to pull back.
As a result of that, I think our member addition for the quarter was 3,583 from a net perspective, which is down 27% compared to the same quarter last year. And this is, as I mentioned, really something — we have made a lot of changes and I’ll talk a bit about them. The other area, which we are measuring ourselves on is on average unit realization, which is a — what it means is what is the average sales value per member addition that is at INR5.04 lakhs, which is up 28%. Now, this has come through various means and let me talk about a few of them.
So first, as I mentioned, I think the big change we made this year is we have discontinued this quarter is — we have discontinued the three-year product and the four-year product and replaced it with a five-year product called GoZest-5. And this really happened somewhere towards the end of the quarter, I want to say, almost August and September beginning. So, that has had some impact in terms of just the positive benefit to AUR. Now GoZest-5, I’m happy to say has found an instant response and I think that we have seen almost a seamless movement of people from the GoZest-3 and GoZest-4 products and the CMH4 products to GoZest-5. So, clearly that was the need of the market. And I think it goes on to kind of test the thesis which we were testing out was that with the right kind of product, I think we should be able to increase both tenure and value. So, this was one of those first things which we tried out.
The second thing was looking at how do we think about cost of acquisition, which channels are productive, which channels are not, so we have discontinued the usage of certain channels and also looked at the conversion rates across multiple customer groups and actually reduced some of those initiatives during the course of the quarter. What that has meant is that, that has obviously reduced the number of leads and also led to some reduction in terms of sales. But I think it’s a necessary step as we go through this transformation journey.
The other thing, which we track very closely is membership upgrades and that is really existing members referring others. I’m happy to say that there is a consistent growth, which we continue to see in upgrades. It is up 13% Y-o-Y. And this is a channel actually, which is an area of focus for us because this is really existing members actually referring others, which tells us two things. One is that existing members are kind of very, very satisfied with the kind of service we are providing them. And also it provides probably one of the highest conversion rates in terms of all our channels. So, that’s something which is very, very positive. The other question, if I look at it from a referral and digital route, I think we are at about 58% of member additions to these two routes in Q2 F ’25 versus 55% last year. So, we are seeing a consistent increase in the digital route. So, that’s broadly on the front end and the customer side.
The other area of focus was really on inventory addition. Again, we have had a strong quarter this time. We have added 219 keys. We have opened three resorts. Current base is 5,500 keys almost. And I think as we work towards our target of 10,000 rooms, I do believe this is a great start to that journey. And I think we will see this consistent kind of growth as we go through quarters and years to come.
Currently, the ongoing projects on the greenfield side continue to be on track. In fact, in this quarter, Kandaghat, the expansion is coming through, which will be another 102 rooms that we are expecting to happen in this quarter. On the other side, when I look at the resort performance, I think the resort performance was very stable. Y-o-Y, we didn’t see the kind of growth and the reason being there was some inclement of weather across multiple locations. So, Sikkim, Kerala, Gujarat, parts of MP, these are all affected by unseasonal rains. And clearly, that’s something which we believe is a quarterly phenomenon and we should probably see that as a thing of the past as we enter Q3 and Q4.
Beyond that, I think we continue to be awarded. So, for example, we have some awards coming for some of our resorts and at some of our restaurants. So, that’s something which we continue to focus on. I’ll spend a minute on HCR, which is our European subsidiary. I think it has delivered improved performance this quarter. However, I think the overall macroeconomic environment in Finland continues to be weak. I think the economy is going through a phase of, I would say, corrections, and there have been layoffs and bankruptcies that’s happened there. Within that, I think our occupancy continues to be much better than the local averages. And this is something because of the continuous focus of the management team in terms of both, trying to manage that occupancy also and keeping control on cost.
I think we are seeing some of the results better than last year. And this is in line with what I had mentioned earlier that we do believe with all of the measures we are taking, maybe last year was the worst year for HCR. But again, this is all dependent on where the economy is heading in terms of Finland. I think with that, what I really want to summarize is that the journey on premiumization, the journey on making sure that we are targeting the right customers continues. The journey on inventory addition has started strongly and that’s something which we will continue to build on. And lastly, I think the journey around technology and how we use technology to target has started — has been amplified in this quarter, not started. And that’s something, I think we should see results coming in the quarters going forward.
With that, I’ll really throw it open for questions. So, happy to take your questions. And back to you, moderator.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions]
Our first question is from the line of Sagar Tanna from Alchemy. Please go ahead.
Sagar Tanna
Thank you, sir, for the opening updates. Can you tell me March ’25, what is the number of inventory we will be sitting on? And in FY ’26, what is the basis of the current visibility? What can be the inventory addition?
Manoj Bhat
So, Sagar, let me give you some indicative view on this because inventory is a thing which you can’t — it can flip by a month here or there at any point. So if I look at our overall journey of trying to add 5,000 rooms, I think we have visibility to close to about 65% to 70% of that today. And that, I mean, we have identified properties or land parcels or work is in progress already, right? So that’s a more longer-term view. From a more short-term perspective, I think our current plan we are looking to see if we can — in the first half, whatever we did — if I look at the second half, we’re planning to add about three new resorts and with one expansion. And of course, any of this could slip a month or here or there and that should take us to probably a net addition of anywhere between 550 rooms to 600 rooms. That’s the kind of range we are looking at at this point.
Sagar Tanna
This is for the current year, right?
Manoj Bhat
Yeah.
Sagar Tanna
So March ’24, we were at 5,300 odd rooms and we will be closer to 5,900 odd rooms by March ’25, ballpark number?
Manoj Bhat
Yeah/
Sagar Tanna
Yeah. Thanks. And in ’26, what is the addition expected, sir?
Manoj Bhat
As I said that, that’s something we will have to give visibility because a lot of these are dependent on external parties on approvals and so on and so forth. So as we come closer to that, we will talk about it. But as I mentioned, if I take a longer-term view, I think we have visibility to about 65% to 70% of our goal of 5,000 rooms to be added in the next five years.
Sagar Tanna
Got it. Thank you so much.
Operator
Thank you. Our next question is from the line of Pankaj Kumar from Kotak Securities. Please go ahead.
Pankaj Kumar
Yes. Thanks for taking my question. Sir, my question pertains to the member addition. So in this quarter, we have seen a decline. Of course, as you stated in the last quarter also, we are taking certain corrective measures. You actually have stated roughly 700 rooms you are going to add in the current financial year. So, do you see a sharp acceleration in the member addition in the coming quarters looking at the inventory addition plans that we have?
Manoj Bhat
Sorry, I missed the last piece. What is the question?
Pankaj Kumar
Do you see a sharp acceleration in the member additions in the coming quarters, in the next two quarters?
Manoj Bhat
No. So, Pankaj, my own sense is that this year, the focus is on two or three things. So one is — and I think I said the same thing in the last call that really getting the product market fit right, number one. And by that, I mean, so we are, we are — as part of our strategy, we are looking at changing our product as well. And that’s something, which will happen over the next two quarters. From a market perspective, I think there are markets we are exiting. There is — potentially, we’re looking at how to really think about it very differently in terms of channel. And I think from my perspective, the overall goal would be that we will try to be as close as possible from a value perspective to last year, but maybe not necessarily from a volume perspective.
Pankaj Kumar
Okay. So, as you said you would be exiting certain markets. So is it with reference to the cities that earlier you were looking at Tier 3 cities or smaller cities where you were looking — targeting new members. So is it in that direction or…
Manoj Bhat
Yeah. So, I think some of the places what we discovered is that while we might not have a presence in those, we were actually selling some of the plans there and we could not do excellent aftersales service and manage the customer expectations. So where — those are the markets we have said we’ll pull back and that’s something, which is happening as we speak and some of it has already happened. Yeah.
Pankaj Kumar
And sir, my second question pertains to your opening remarks where you talked about technology measures that you would be taking. So if you could explain more on that, what exactly we are going to do on the technology side?
Manoj Bhat
I think the first and foremost thing we are doing is really thinking about interventions from a customer area. And so that is about, if you get a lead, how do you really make sure that what is the propensity to convert, right? I think that’s one of the questions we are asking, which is about then using whatever data we have available, plus using some of the technologies through AI and other interventions to come up with what is the best possible way to convert a given lead. The second thing which I mentioned last time was, I think we have just completed the major phase of our customer insights in terms of what are the customer trends and who are our customers, where should we focus on? That’s a separate large marketing research program, which we are doing and feeding those inputs in a technology fashion or enabled using technology and then using that data to target the right kind of customer.
So the third thing is in terms of, if you think of customer inquiries, customer queries, booking recommendations, there’s a whole plethora of customer experiences, which we’ll have to deliver better to our members. That’s the third area of focus. So, those are the top two or three things, which we are looking at. And the last one is from a resort perspective, how do we better use technology to identify member needs almost as much as on the spot, right? So as members come into the resorts, how can we use the available data we have and make it contextual to the person who’s meeting the customer and can you use that technology to sell or cross-sell experiences to that same customer? I think these are the three, four buckets we are working on.
Pankaj Kumar
Thank you. Last question if I may ask, pertains to the member acquisition cost. So, you said there’s a more digital and referrals that we are looking at. So, how that member acquisition cost structure is going to change? I believe earlier we used to have some 24%, 25% cost — member acquisition cost.
Manoj Bhat
I think it is — I don’t want to give you the exact numbers because it’s still work in progress, but it is starting to trend down. I think from our perspective, we have looked at the way we structure consumer offers and look at — how do we look at the overall TCO and offer value to the customer. And so that journey has started. I mean, it has come down a couple of percentage points, I would say. But I think there is a longer part of the journey, which I think we’ll start covering ground more in Q3 and Q4 from a COA or a cost of acquisition perspective.
Pankaj Kumar
Thank you, sir. Thank you. All the best.
Operator
Thank you. [Operator Instructions] Our next question is from the line of Ankit Kanodia from Smart Sync Services. Please go ahead.
Ankit Kanodia
Yeah. Thank you for taking my question. Sir, my first question is related to what we discussed in the last quarter con call. So just to refresh your memory, at the outset, it is nice to see that you are relooking at all the initiatives, which were taken in the past and doing all the course correction. But one big elephant which is there in the room, which I think needs more attention and which I discussed in the last call as well is to relook at our acquisition of HCR, which we did about a decade ago where we invested about INR600 crores. And you mentioned that maybe in a quarter or so, you will be in a position to share what the management has made of that. So any discussion on relooking at HCR, whether we want to completely get out of it or do something about it? Because it is more than 10 years now or close to 10 years now and we have not made any progress there in terms of any incremental ROE or incremental cash generation. That is my first question.
Manoj Bhat
So, Ankit — I’m sorry if the communication came across that we will decide in a quarter. Probably — it was probably wrong on my part if I have left that impression. But what I said was that we will look at category A and B and C, which we did in M&M also. So, I said that we will figure out the best way to go forward on this. The second thing, which I said was that it will not continue to be an incremental drag on our numbers and the worst is over. The third is I said that we are not close to any possibility, but we will consider all the conditions around that and that includes our ability to improve performance there and that — I’m sorry if it came across as a quarter or so, but it will take a longer time and it is not going to be something, which is immediate because you must understand these are — what is happening in Finland, if you look at the same company, had an EBITDA of $12 million about five years to six years back — or the EBIT, I’m sorry, not EBITDA. And so there’s a set of conditions, which is causing this today. I think it is — and I think the question is do we take decisions at the bottom of the cycle or do we take decisions when I think they are more evenly balanced? And that’s something, which is a call we’ll have to make on this.
Ankit Kanodia
Sure, sir. That really explains a lot. Sir, my next question is related to what you mentioned for the current quarter. I mean, we have replaced our two year and three year — two year and four-year products with the five-year product. Strategically, how do we look at member acquisition in that aspect? I think our focus remain still to get more and more members for 20, 25-year product or we are equally rooting for the five-year product. Or if our focus is 25-year product, why is the five-year product — I mean, there must be some logic behind it and why do we think that there is a need for five-year product? If you can share some more light, that would be very helpful.
Manoj Bhat
That’s a very interesting question. So if you look at our product profile, right, and it is, some customers prefer the 25-year product because it offers certain set of benefits, including potentially good value, etc., etc. And there is another set of customers who are not willing to commit for a longer term. But what we have seen is that one of the reasons, for example, our upgrades are on a good cycle, etc. Once they experience the product, we have seen people trending up. So right now, what we said is that the three-year product and the four-year product, I think we said that what is the minimum level product we would like in our portfolio and that’s the five-year product, which is I would say almost like an introductory product or a sampling product for people to experience our offering. Then we have the 10-year product and the 15-year product and the 25-year product. That’s our current portfolio.
If I look at trends in member addition, I think, compared to last year, the 25-year product is marginally down. The 15-year product is strongly up. The 10-year product is probably, give or take, the same and the five-year product has replaced the three and four-year kind of space, right? So what it seems to indicate is there is a market for each of these product offerings. Having said that, one of the things we are doing this quarter is doing a comprehensive review of product structure because even within this, we have points-based products as well as nights-based products. And so I think we are looking at that structure also. But the short answer for your question is, what we are finding is you will see people who are more happier buying a 25-year product and you will see people who are more happier buying a five-year product.
Ankit Kanodia
Got it. Got it. No, that was very helpful, sir. Sir, my next question is related to the receivables, which we have on our annual reports of the year. So, we don’t give any breakup in terms of how much of that receivable is because of the use of the vacation ownership income or pricing? Or how much is due to the annual subscription fee, dues? The reason I’m asking this question is that I’m agreeing there would be a section of our members who would have probably subscribed to the membership or vacation ownership, but probably are for various reasons are not using our property. So, they are probably not incentivized enough to make the payment because they think — they might be thinking that I’m not using the property. So, why do I need to pay the ASF every year? So if you can just provide that kind of detail, maybe in your quarterly presentation or annual report, whatever works with you, that would be very helpful, sir.
Manoj Bhat
So, we’ll look at that definitely, Ankit. But I don’t know whether that will actually get you to where you want to be in terms of, does that indicate the number of people? I don’t think there’s a big correlation there. Because if you see what we have seen member behavior is, there are sometimes — see, the number one reason where people stop paying, let’s say ASF is because they were unable to holiday because of the availability issues, right. So that’s the first fix we are trying to do. So there is more inventory coming. And I think member additions are anyway slowing down because of our focus on what we are trying to do, which I’ve explained at the beginning of the call. The second is that there is a life stage thing that what we have seen is there are certain kind of life stages where there is heavy usage of our product. And then typically, for example, as the kids grow up, I think there is a phase where members stop coming and then they come up — start coming in again after a few years. And when they come again and that’s when they start paying the ASF. So we are seeing all sort of a kind of permutations and combination. From a financial perspective, we do look at how do we provide for this adequately in-line with the Ind AS accounting standards. So we don’t expect any financial impact of this, if that was the kind of question. But overall, what we’ll examine what — and see if there’s any logical way to present this which makes sense, but that’s something we look at. Yeah.
Ankit Kanodia
Thank you so much. And one last question from my side. See, since when we started, we were predominantly a 25-year or maybe even we had a 30-year product at one stage. So there would be a lot of members who would probably — I’m talking about the early numbers maybe from 1996 to 2006 maybe who would have retired or who would be retiring now. Is that a big amount, as in big number or it’s a very small number? The reason I’m asking this is because that gives you an advantage, right, because all those members going out allows you to sell that membership to new members at an inflation-adjusted type. So just wanted to have —
Manoj Bhat
No. Ankit, I had addressed this last time about this financial year and maybe even going forward in the near-term, it will be about INR6,000 a year is what I had mentioned last time. And I’m fully aware and about what you’re saying in terms of the cost out or rather the revenue out and the revenue in, there is a order of magnitude difference. So that is a positive. But our effort really is that if we can retain these retiring members with some sort of a proposition and that’s one more thing we are working on because ideally, while the financials, obviously, whatever you’re saying is right, but I think what is right from our perspective is that we want those loyal customers to continue with us and that’s something we’ll have to work on.
Ankit Kanodia
Right. If I may in just one last question. There are two new Horizon and RCI exchange program, which we — I think we basically started doing it more actively after the COVID. So any color on that as to how we are looking at them today, what is our plan in the future and how it can help us further grow?
Manoj Bhat
So both those programs, I think what we are seeing is that the member involvement or offtake on — let me talk about RCI is something which is lower and frankly, I think that’s something we’ll get into because it’s probably not the highest on the list of priorities from — as we have defined it, but we’ll get to it in the course of the next couple of quarters. Horizon program, we had actually scaled it down a bit as we moved out of the COVID wave. But it still is a pretty large program in terms of the number of room nights, for example, this particular quarter also about 4,000 odd room nights went, but that has come down from where it was last year because I think as we have seen these other kinds of travel and we have pulled back some of the parts of the program which are not so kind of remunerative to us.
Ankit Kanodia
Got it, sir. Thank you so much for the detailed answer and wish you all the best. Thank you.
Manoj Bhat
Thank you, Ankit.
Operator
Thank you. [Operator Instructions] Our next question is from the line of Prashanth Kshirsagar from Unived Corporate Research Private Limited. Please go ahead.
Prashanth Kshirsagar
Thanks for taking my question. Hello.
Manoj Bhat
Yeah. We can you hear you, Prashanth. Please go ahead.
Prashanth Kshirsagar
I just want to ask you a bookkeeping question. I just wanted to ask you what is the capital expenditure program for this fiscal? And how much of it has been spent-out till-date? And in that capital expenditure program, what is the expenditure for renovation?
Manoj Bhat
So I think the way we have spent about in the first half give or take INR180 crores on capex, and I think our renovation budget for the year is about INR40 crores, give or take, right? That’s a quick feel. And I think in the remainder of the year, I think we’ll spend probably another INR180 crores equivalent amount on capex. So let’s give — and these are all numbers which I’m giving you, which are in the ballpark. They are not exact, but in that ballpark.
Prashanth Kshirsagar
So can you share any number for fiscal ’26, FY ’26?
Manoj Bhat
We will keep increasing it because it is linked back to the question I mentioned about inventory, which I think some other gentlemen had asked that what is their F ’26 plan. So it is kind of directly linked to that. And that we’ll share somewhere towards the end of the financial year as we look into next year. But giving you a broad sense, I think it will be higher than this year is what we are looking at. Yeah.
Prashanth Kshirsagar
And in the renovation capex, which resorts are getting renovated by — if you can share with us the details?
Manoj Bhat
I think we are renovating plenty of resorts actually. And in fact, let me spend a minute on that. One of the things is we are looking at how do we move the resort infrastructure quality up and that is another initiative from a resort perspective. I think we started that in Q2 and I think that should pick-up pace, but we are looking at multiple resorts. The way we are doing it is we are not doing a full resort shutdown. We are picking-up blocks and going segment-by-segment and upgrading rooms and public areas as well as things like MEP as required.
Prashanth Kshirsagar
So would that mean in the renovation, the furniture of the rooms also will be changed or because in some resorts of yours, they have become quite old and it’s not that they have broken or something, but you know, just to feel that wow effect has gone from the resource.
Manoj Bhat
Prashanth, thank you for the feedback. Why don’t you send me an email of what these resorts are and definitely that’s part of the program, but I would be happy to take direct feedback on an email, if you have my email ID.
Prashanth Kshirsagar
Sure. That’s the reason for asking this question. Yeah. Anyway, thanks a lot. My questions have been answered. Thanks.
Manoj Bhat
Yeah.
Operator
Thank you. Our next question is from the line of Sukant Garg from Equible Research Private Limited. Please go ahead.
Sukant Garg
Hi, thanks for giving me the chance. So my first question would be how much is the average cash spent or average revenue per customer while a customer is on a vacation? Do you have the data?
Manoj Bhat
We do have the data, but it’s not in public domain and that’s competitive, so we were not going to share it.
Sukant Garg
Okay, thanks. Can you tell me what is the rate of growth in the deferred revenue? Because I seem it is a declining from FY ’24 to FY ’25. And being in a timeshare business, I believe that is one of the most important aspects.
Manoj Bhat
No, I think it’s not gone down for sure and I think it — sorry, deferred revenue.
Sukant Garg
Yeah, so based on the — it’s on slide seven. From FY ’24 to FY ’25, the addition is right now is about 90 [Phonetic].
Manoj Bhat
So I think two, three things, right? So deferred revenue has not gone down, right? The preferred revenue balance has gone up.
Sukant Garg
It’s about the rate of growth.
Manoj Bhat
The rate of growth is, obviously, we have spoken a lot about member additions, right?
Sukant Garg
Yes.
Manoj Bhat
And that’s kind of correlated directly with this.
Sukant Garg
Yeah, I agree to that. But you know, I am asking from a timeshare perspective because we are in a timeshare business and it’s not about member addition only, it is about the upgrades happening or it is about many other things that where we can increase the deferred revenue because in a timeshare business, when a deferred revenue growth is decreasing, then it’d be a kind of concern, right?
Manoj Bhat
Sorry, I didn’t understand when you say deferred revenue will increase during the lifetime of the member, what were you referring to?
Sukant Garg
I am saying the deferred revenue pool, if the rate of growth in the deferred revenue pool is not increasing that much.
Manoj Bhat
It is correlated with the member addition as I mentioned. But I thought you were saying there are other factors which will impact deferred revenue.
Sukant Garg
Yes. So I’m saying that there may be other factors like upgrades and all these things through which these deferred revenue pool can be maintained.
Manoj Bhat
So if you look at upgrade and I spoke about it in the beginning. So see all the components of the deferred revenue pool spoken about, right? I spoke about member addition, I spoke about AOR, I spoke about value of net sales and I spoke about upgrades in the beginning opening statement as well as — so all of that kind of contribute to deferred revenue. And as I said, I am agreeing with you that the pace of growth is slowing down because the member addition, as I mentioned earlier is not just a volume game, I think it’s a volume and value game which we are playing.
Sukant Garg
Okay. So would you like to say that we have been more now concentrated on the average revenue of unit rather than you know, we are diverting towards somewhere on increasing the revenue of per unit per hotel, is that so?
Manoj Bhat
Yeah. So if I look at our AUR, as I mentioned earlier, is up 28% Y-o-Y at INR5.04 lakhs, right? So while our member addition is down 27% compared to the same period, our upgrades are up, I think 12% or 13% compared to last year’s same quarter. So those are the metrics which all contribute to this.
Sukant Garg
Okay. Just one last question. Which is the most sold product as per from the perspective of price point? I know you’ve already told that 25 year — sorry, 15-year membership is the most sold one. But if you compare — can you give me a ratio of the most sold product out of these three in this.
Manoj Bhat
So I don’t want to split the products, but I said the 15-year is the strongest growth compared to last year. But the most sold product today is the lower tenure product. It has always been even last year, right?
Sukant Garg
Okay. That’s all. Thank you. And congrats for the numbers. Thanks.
Manoj Bhat
Thank you, Sukant.
Operator
Thank you. Our next question is from the line of Sahil Vora from M&S Associates. Please go ahead.
Sahil Vora
Hi, good afternoon. Am I audible?
Manoj Bhat
Yeah. We can hear you, Sahil.
Sahil Vora
Yeah. Just a couple of questions from my end. Firstly, can you share the outlook for any resort acquisitions which you have planned for doubling the inventory base of the company?
Manoj Bhat
So I did mention that really from my perspective, I gave a view on this year, right, that one expansion and three more resorts, which is what we are targeting by the year-end. And then I said that overall, we have visibility to 65% to 70% and these are over multiple locations. And I think it’s a combination of greenfields, it’s a combination of build-to-suit with partners and then leases of existing resorts. And maybe in-between, we might have an odd acquisition, which is like a buyout, but all of those four methods will be used. I don’t know if you’re looking for something specific, Sahil.
Sahil Vora
No, that color is a bit more or less. My next question is regarding the member additions. So one observation was the addition of inventory base is not being supported by member addition. So if we see any additional inventory base remains vacant. So do we believe the decline in member additions is a short-term issue or is the company going to put in any strategy in-place to decrease the number of members and improve the customer additions in general?
Manoj Bhat
So Sahil, the way at least I see it is that if you look at availability and occupancy, right, we are known to be a very high occupancy kind of organization. And one of the feedbacks which was coming was that because of that and because of inventory, we were seeing members saying that they were seeing unavailability of bookings, which was leading to a negative sentiment from the customer. So in a way, if you think of it, these new rooms will be available for members who could not avail of holidays before. So I think that’s the first kind of step of this journey. The second step of this journey is that if you look at member to room ratio, I think we have been on a journey of correcting that and bringing it down, so that we address the issue of making sure that our members have an easier way to book and we can fulfill the needs. So that’s really the first step of the journey. As we go through the — whatever I said in terms of correcting the cost of acquisition, correcting channels and correcting product market fit as I called it. I think then we look at how do we grow inventory — sorry, members over a period of time. But right now, very comfortable with providing all our existing members a chance to vacation sooner and with higher availability.
Sahil Vora
Okay, that helps. Thank you, sir, and congratulations for the good set of numbers. Thank you.
Operator
Thank you. [Operator Instructions] Our next question is from the line of Rajesh Jain from AR Advisors. Please go ahead.
Rajesh Jain
Hi, good afternoon and thank for the opportunity. Am I audible?
Manoj Bhat
Yeah, we can hear you, Rajesh.
Rajesh Jain
So sir, I just wanted to understand like the customer response on the newly launched GoZest-5 products like what is the customer response to it? And how does it compare with other membership products in terms of demand and customer demographics?
Manoj Bhat
Yeah. So number one is we’ve got a very strong response. As I said that we didn’t miss the three and four-year product at all. So basically GoZest-5 fitted very, very well and took over pretty much all the share of whatever three and four-year product were coming to. The second is, this was despite price differential I would say on an average of approximately INR1.3 lakhs between GoZest-3 and GoZest-5, right, and it could be INR1.25 lakhs, but in that zip code. So clearly what it tells us is that if we design a product for a need, I think we are finding the markets. What is the other question? Was that something about the profile of customers?
Rajesh Jain
Yeah. So like what is the customer response and in terms of customer demographics like what kind of customers are more interested into this.
Manoj Bhat
I can’t bucket it saying only this kind of customer, so which is buying GoZest-5 or something. I think it’s broad-spectrum across locations. But if you look at typically, I would think people who generally want to try it out first is probably where I would put the biggest customer need from GoZest-5 perspective. The second one is that I think what we are thinking of as a strategy is that as we get these kind of customers who want to try it and if we can provide an experience, we can then actually move them to the 10, 15 and 25-year buckets as upgrades and that’s really the strategy there.
Rajesh Jain
Got it, sir. Understood. And one more thing that I wanted to understand is on your HCR segment performance, so like revenue dropped while EBITDA was positive, but PAT was declining as well. So like is the future outlook on the — like what is the future outlook on the same? Do we see them increasing and having a greater impact on our consolidated PAT or like.
Manoj Bhat
Vimal, why don’t you pick that PAT?
Vimal Agarwal
Of you look at the segment level HCRO, so far as the timeshare business is concerned, we are doing well and ahead of our last year performance. You will see some decline so far as our resort spend is concerned. That is primarily reflective of two things. One is the Russia-Ukraine war and therefore the incoming tourist within Finland resort has gone down, which we hope will improve as we progress through this. The second one is the Finland economy is down. We expect that to start improving because, for example, inflation is down versus last quarter. As of now, the spend per person visiting our resort is down, but hopefully that will also start turning positively. Important point to note so far as HCRO performance is concerned, our costs are pretty much in control. In fact, there is reduction in costs which we are seeing across to ensure that we don’t see any downside so far as HCRO performance is concerned on a long-term basis.
Rajesh Jain
Okay. Got it, sir. Thank you. That was all I wanted to ask.
Operator
Thank you. Ladies and gentlemen, in the interest of time, our last question is from the line of Ankit Kanodia from Smart Sync Services. Please go ahead.
Ankit Kanodia
Yeah. Thank you so much for allowing me a follow-up. Just correct me if I’m wrong. I look at our resort income and specifically growth in resort income to kind of gauge as to how many members or how members are basically using our resorts. So, see there are three components to our revenues. One is decision ownership income which has a lot of companies which is also from the past, right. And then there is ASF, which again even if our member is not probably using our resort, he’ll end-up paying it because that is a condition in the agreement. But resort income basically clearly shows that how many members or are our members actually using our resort and spending in resorts, in resort activities and F&D and all the other things. But I’m not sure why this number — resort income has been growing at a very low-single digit. In fact, if you look at current quarter, it has been almost flat. So can you give some color on that?
Manoj Bhat
Yeah. So if you look at — a great point, Ankit, and I think your understanding of the company is very accurate. So if you look at resort income, there are two or three factors here, right? So one is, obviously we lost some room nights, etc, due to inclement weather, that’s one. Second is that we have reduced F&B costs or rather charges across our resorts and this is a way to for us to see if we — and this is an experiment we are running for a limited period to see if that would improve overall adoption because one of the customer feedback, which was coming consistently was that is one area they would like us to respond to them in terms of having a more balanced cost to them and that’s something which we have done in quarter two. In addition, I think there are some trends around our number of people in a room now, I don’t know whether that’s just a quarter thing or not, but that’s the third element of what’s happening. Overall, if I see — if I add — so this is the standalone number, it doesn’t include some results. If I add those, I think we are up 2% compared to last year. But the point still remains that I think the combination of these two, three things, we should have been ideally higher, much higher than the 2% and that’s something we’ll work on going into Q3 and Q4.
Ankit Kanodia
Got it. Because previously you used to share the basically breakup of the resort income in terms of rental income, in terms of F&B and other leisure activities out there. But those details are missing since last few quarters, if I’m not wrong.
Manoj Bhat
I think we usually share it annually, but I can double-check that.
Ankit Kanodia
Okay. Thank you, sir. That is it from my side. Thank you so much and all the best.
Manoj Bhat
Thank you.
Operator
Thank you. Ladies and gentlemen, in the interest of time, that was the last question for the day. I would now like to hand the conference over to Mr. Manoj Bhat, MD and CEO, for closing comments.
Manoj Bhat
So thank you everyone for joining the call and if there are any unanswered questions, please do feel free-to reach-out to me and specifically to the gentleman who had some feedback on the rooms, if you can write me an email, I’ll be happy to look into it. Thank you so much.
Operator
[Operator Closing Remarks]