Tune Hotels to open 64 hotels by 2013

They will be located in India, Philippines, Thailand, Indonesia, and Bangladesh

Some 200 hotels in over a dozen countries across Asia, the Pacific and Europe are offering clean, hip and secure accommodation for value-conscious travellers from around the world.

That, in a nutshell, is the dream being spun into reality by Mark Lankester, the chief executive officer of Tune Hotels.

Controlled by Malaysian budget carrier AirAsia and its boss Tony Fernandes, Tune already operates seven hotels – five in Malaysia and two in Bali.

‘We would have had twice that number if not for the financial crisis and the credit crunch,’ Mr Lankester told BT.

According to him, development plans are already underway to set up 64 Tune hotels in India, Thailand, Indonesia, the Philippines and Bangladesh. These hotels will be up and running by 2013, he added.

And it doesn’t stop there.

‘With AirAsia X now flying to London and Australia, we have plans to launch 10 hotels in greater London, and as many in Melbourne and other Australian cities,’ Mr Lankester said.

Singapore, despite its high land costs, is also on Tune’s radar screen. So is China.

The hotels, where prices per night start at the equivalent of S$5 for a standard 12 square-metre room, are targeted at not just budget backpackers, but also budget conscious corporate travellers who want good, clean, secure rooms, with hot ‘power showers’ and good quality bed and linen, Mr Lankester said.

‘We are not talking about cheap, sleazy hotels,’ he said. ‘Our hotels are good class, hip, budget hotels, centrally located in every city, with airy rooms, full CCTV monitored security, and front glass doors which auto-lock by midnight with access only by smart keys. It will appeal to both budget leisure and budget conscious corporate travellers.’

Each hotel will have an average of 180 to 200 rooms, though some of its existing Malaysian hotels have almost 300 rooms. And the F&B outlets will be farmed out to suitable vendors, be they a global chain or localised versions of ‘kopi tiams’.

Mr Lankester, a colleague of AirAsia boss Mr Fernandes at Warner Music before he was poached not long ago by his old buddy, says the rollout will be financed by a combination of borrowing and franchise arrangements.

‘We will no doubt have to gear up,’ he said. ‘But we will also leverage on existing properties where we will be operating the hotels in franchisee partnerships with the property owners.’

Mr Lankester envisages the Tune hotel chain spreading to locations well beyond the 120 destinations which AirAsia flies to.

‘We call them Tune Hotels, and not AirAsia Hotels, for good reason,’ he said. ‘It gives us an option of growing beyond AirAsia.’

Never mind that its owners are the same people who control Asia’s largest budget airline.

And even as Tune picks up, Mr Lankester and his buddies at AirAsia are already rolling out new products such as TuneTalk (mobile telephony cards) and TuneMoney (pre-topped up debit cards).

‘TuneMoney, which is a tie-up with Visa cards, enables travellers to top up their debit card with the currency of their destination, thus saving them the hassle of doing forex transactions when they get there,’ Mr Lankester explained. ‘And with TuneTalk, we essentially tie up with local telephony service providers in various countries to enable our customers to use their mobile phones at local rates.’

Mr Lankester envisions that just as AirAsia has established itself as the undisputed leader in low cost air travel, Tune will ultimately emerge as the undisputed leader in hospitality and travel facilitation.

And it appears to have made good headway so far.

Source: Business Times, 2 Nov 2009