Why Sterling Holidays is moving beyond holiday memberships before its standalone listing

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Sterling Holiday Resorts is quietly killing the vacation ownership business that built the company.

The leisure hospitality subsidiary of Thomas Cook India stopped selling new memberships about two-and-a-half years ago. Its 50,000 legacy members now provide an occupancy cushion as Sterling builds a conventional hotel business ahead of its demerger from the parent and a separate listing, managing director and chief executive Vikram Lalvani said.

“The membership model is not bad, but economically it may not work in the long term. We sunset acquisitions about two-and-a-half years ago. We first moved towards leisure hospitality and then towards a larger hospitality play,” Lalvani told Mint.

The shift is already reshaping the company. Sterling operates 78 resorts, hotels and retreats with more than 3,800 rooms across 65 destinations. It expects to cross 95 properties and 4,500 rooms by 2027.

Thomas Cook India announced in March that it would demerge its resorts and resort management business into Sterling Holiday Resorts, subject to regulatory approvals. The transaction will also transfer Thomas Cook India's Nature Trails resorts business to Sterling and pave the way for its separate listing.

Sterling continues to service its existing base of about 50,000 members, with around 30,000-35,000 travelling each year. Those members are no longer the source of future growth. Instead, they provide a built-in occupancy cushion.

"The base that we have is actually our competitive advantage because it helps fill the first 10-15% of occupancy. It keeps the cash registers ticking," Lalvani added.

Navneet Nagpal, founder of Spectra Hospitality Services, said the vacation ownership model was facing structural pressure as travellers increasingly preferred flexible hotel bookings over long-term commitments. Rising maintenance fees, limited peak-season availability and the growth of online travel platforms had reduced the appeal of traditional timeshare products, he said.

"Timeshare didn't fail as an idea. It failed to keep pace with how Indians now buy travel," Nagpal said, adding that operators were increasingly using memberships as a loyalty tool while relying on hotel operations for growth.

“With some active members but no new membership sales, it will continue to service existing customers but shift future growth to its hotel business. When older memberships gradually expire, the company's long-term obligations will reduce, allowing new hotel rooms to be sold at market rates instead of being tied to member bookings,” added Nagpal.

The transformation began during the pandemic, Lalvani said. “First it was about surviving. Then it was about reviving. Now it is about thriving.”

Sterling generated less than ₹200 crore in revenue in 2019, when 70-90% of the business was linked to memberships and the company was loss-making. While profitability has improved, Lalvani said accumulated losses from the legacy business continue to remain on its books.

"Legacy businesses take time to repair," he said.

The numbers now show the shift. Resort operations contributed 85% of revenue in FY26, up from 79% a year earlier. The company reported revenue of ₹548.7 crore, Ebitda of ₹170.1 crore and profit before tax of ₹114.2 crore for FY26 while remaining debt-free. It also completed its 25th consecutive profitable quarter.

Sterling is also trying to make its hotel business less dependent on seasonal leisure demand. It has begun adding hotels in business and mixed-demand markets such as Karwar and Madurai, while targeting meetings and incentive travellers.

"In earlier years, the first quarter was always our strongest. In the last two years, the third one—October to December—have become the strongest because this is also when families travel and weddings happen," Lalvani said, adding that the company now balances leisure demand with corporate, and pilgrimage travel.

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