It has found traction by opening the holidaying option to non-members or guests. This is the segment where the firm has seen “aggressive” growth, says Ramesh Ramanathan, the MD.
“We have seen double-digit growth and by taking a strategic decision to open up to guests, our revenues have shown a marked increase,” he says, noting that the growth between members and non-members has been equal. After a round of funding, courtesy Fairfax, the takeover by Thomas Cook and the acquisition of Nature Trails, Sterling seems to have hit the sweet spot. Its room inventories, expected to touch 2,700 by next year will close the gap with the competition.
Outlining growth plans, Ramanathan said it is consciously striving to position itself as a holiday company. “We are known as a timeshare firm, but now we see a vacant slot in the holiday space. Since 2011, this category of the industry has been evolving and we would like to occupy the top slot,” says the Sterling loyal (having been its President two decades earlier), who came back to take up the reins in 2011 after a stint with Mahindra Holidays, where he built the Club Mahindra brand.
Sterling currently operates 31 resorts across 29 destinations. It has a total of over 2,300 rooms. “We have expanded in locations, especially at places that were erstwhile untapped. These include Karwar in Karnataka, Dindi in AP, Daman, Sariska and Shirdi too. We went where others shied to venture,” he says. The firm does not want to be perceived as providers of rooms and sight-seeing alone.
On the experiential factor, Ramanathan said the company found itself to be the single largest leisure choice when it comes to online bookings. “Instead of refurbishing, we gutted out the resorts and spent Rs 25 lakh per room so that one can get a contemporary experience at all our resorts,” he said, noting that 15 of the 31 resorts were owned by Sterling. The company owns as many as 1,350 rooms. Sterling had also invested around Rs 270 crore on the refurbishing exercise. It continues to scout for locations where it can increase its penetration.
While Sterling has not spent heavily on branding, it has taken a conscious effort to re-position itself that will see the company launching a slew of campaigns soon. “In three months or so, we will embark on this. We will be focusing on digital advantage and though we have revised our prices in the last five years, we still see customers’ preference for our brand. We have increased our rates by five times in this period but that has worked to our advantage,” says Ramanathan.
The collection of membership fees upfront – 25 to 40 pc (Rs 80,000 being the lowest membership fee) has been received well. “The move helped delinquencies shrink and now the EMIs gets completed within 24 months,” he said, but went on to admit that the impact of demonetisation “shook them a little.” The note ban led revenues to slide by 25 pc as tourism is a discretionary spend, he pointed out.
Sterling says the West contributes the highest revenues followed by North, South and East. The company, whose customer profile is tilting more towards the age group 30-45, has 3,000 plus employees. The move to appoint Damian Niesel as CEO Resorts last May has also worked well, Ramanathan says.
Apart from domestic expansion, Sterling has plans for overseas markets to target sought-after locations by Indian tourists, such as South East Asia and Sri Lanka.