Business

Tuesday March 3, 2009

Tune Hotels in talks to open overseas outlets

By RACHAEL KAM


It wants to build regional hotel chain via franchising

PETALING JAYA: Tune Hotels Regional Services Sdn Bhd, which operates Tune Hotels.com hotels, is aggressively in talks with several potential partners to open overseas franchise outlets, said chief executive officer Mark Lankester.

The low-price hotel operator had received about 50 to 60 requests from investors keen to be a Tune Hotels’ franchisee since early this year, he said.

“It’s something that we are under discussion now,” he told StarBiz, adding that besides Malaysia, there were also entrepreneurs from India, Australia, Vietnam, the Philippines, Singapore, Thailand and China who had made the franchise request.

“We want to build up a chain of up to 100 hotels regionally in three to five years,” he said.

Mark Lankestar

Lankester said there was a company in India proposing to franchise six Tune hotels.

“India and China will be a huge market in the long term,” he said, adding: “However, our main focus now is still in Malaysia.”

Locally, Tune Hotels.com is already in discussion with many Malaysian entrepreneurs.

“We expect to contract 20 to 30 local franchisees within the next 12 to 18 months, but the hotels will only be operational in 18 to 30 months,” Lankester said.

He added that the company was also evaluating a few buildings in Kuala Lumpur as potential Tune hotels, but nothing had been finalised yet as it was still in talks with the potential franchisees.

Some potential franchisees have proposed locations such as Kota Damansara, Damansara Utama, Gombak, Kota Baru and Kuala Lumpur.

“We definitely can have more outlets in Kuala Lumpur,” he said.

Lankester said Tune Hotels.com could provide the business model and consultancy services, in terms of construction, interior designing, schedule of furnishes, marketing and promotion, inventory management and staff training.

On the investment for each franchise outlet, he said Tune Hotels.com would try to make sure the initial cost was low.

Recently, Tune Hotels.com launched its first hotel franchise, the Tune Hotels.com-Waterfront Kuching.

On the expansion of Tune Hotels.com-owned outlets, Lankester said it was on track to open a 258-room hotel in downtown Penang and a 222-room hotel at the Low-Cost Carrier Terminal in KL International Airport next month.

He said it also planned for two hotels in Johor Baru, one each in Ipoh, Kuantan and Miri, to be opened by year-end.

Currently, Tune Hotels.com owns a 173-room hotel in Kuala Lumpur and a 165-room hotel in Kota Kinabalu. It will also open in November its first hotels outside Malaysia in Indonesia - a 170-room hotel in Legian Bali and a 140-room hotel in Kuta Bali.

Lankester said it was also looking at Bangkok, Jakarta, Medan and other places.

“In every storm, there is always a silver lining. We are going to continue with our expansion plans,” he said.

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