Friday February 22, 2013

Tune Hotel to spread wings to Japan and Australia, expects high growth

NEW DELHI: Tune Hotel Group is set to grow exponentially from this year onwards, with hotels mushrooming in India, the Middle East, Australia, Japan, as well as the African region, according to chief executive officer Mark Lankester.

By end-2013, Tune Hotel would be present in eight countries, he said.

“Currently, we are in Malaysia, Indonesia, Thailand, the Philippines and the United Kingdom. India will be the sixth market, followed by Australia and Japan,” he said in an interview with Bernama.

In India, the first hotel will open in Ahmedabad, Gujarat, in April, followed by Melbourne, Australia, in November and one more in Japan, he added.

Next year, Tune Hotel will also open its doors in Mekkah, Madinah and Jeddah in Saudi Arabia. “We are looking at Europe as well. We are looking at Italy and we are finalising a deal in Vienna, Austria, amid the huge tourist potential there,” he said.

In the African region, Tune Hotel is keen to enter Kenya, Tanzania and Uganda, he said, adding that the value hotel chain had already signed a deal in Nigeria.

“There is oil money in Nigeria. The economy is growing fast. There is huge demand amid a population of 160 million people, but there is no supply, and the fact that there are no big international brands in the country is a great time for us to gain a foothold there.

“We love countries that offer high room rates,” said Lankester.

Colombo, Sri Lanka, also offered good opportunity and Tune Hotel was eyeing that market too. “In Colombo, we are looking, but we have not got anything substantial as yet,” he said.

Besides expanding into new territories, Tune Hotel is also keen to grow in its existing markets. “Only by expansion will you benefit from economies of scale,” he explained.

Currently, there are 11 hotels in Malaysia, five in the UK, three each in Indonesia and Thailand and four in the Philippines.

In Malaysia, hotels are slated to open in Malacca, Alor Star, Cyberjaya and KLIA2 (400 rooms) and in the UK, while one more hotel would be located in Canary Wharf, he said.

”The total number of hotel rooms will change rapidly from now onwards, as we have plans to open one to two hotels every month,” said Lankester.

Going forward, Lankester said there was potential for Tune Hotel to go into full-fledged hotel services. Although he did not provide a timeframe, he noted that at some stage, it would make sense to offer a four-star hotel facility. “By then, we would have built up certain amount of expertise. Just like how after AirAsia, AirAsia X came about,” he added.

In India, Tune Hotel has earmarked nothing less than 100 hotels, with the first to open its doors in Ahmedabad, Gujarat, in April.

Gujarat's vibrant economy is among the key factors in the budget hotel chain's decision to start its ventures in India from the state which is located in the northwest, he said.

“We have a full strategy for Gujarat. Normally we go into the big locations such as New Delhi but we went with Gujarat first as when we looked at the history it is the best performing economy in India,” he said. Bernama

Hence, it is important for Tune Hotel to make its presence there first.

Apart from the economy, which saw an average annual growth rate of 10.4% over the last five years, there is also a huge non-resident Indian traffic to Gujarat.

“If you look at one state that has more citizens leaving aboard, it is Gujarat. There are about one million Gujaratis in the United Kingdom and another million in the United States. They are all over the world, which is a huge market to be tapped into.

“So, within Gujarat itself there is a strategy for five to six hotels ideally over the next three years,” he said, adding that the first 100-room hotel would open this April in Motera, Ahmedabad.

It would be followed by a 120-room hotel in Bhiwadi, Haryana, by end-2013 and a 200-room hotel near the New Delhi Railway Station early 2014.

Besides Delhi, Mumbai, Calcutta, Bangalore, Hyderabad and Chennai are the other major capitals that Tune Hotel would stamp its presence. Bernama

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