Setting the price Tune

News, Hospitality Trends

Whatever the benchmark pricing, Malaysia’s Tune Hotels Group which runs Tune Hotels.com will price itself between 15-20% lower than its competition set here in India.

The Malaysian budget hotel chain, whose parent company is budget airline Air Asia, is developing 20 hotels in India with specialty fund Apodis Hospitality Group. The deadline for these is 2012.

Affiliated to real estate and infrastructure investment firm Trikona Capital, Apodis Hospitality is into operation and development and investment of hospitality assets across three key segments – leisure, business, and budget.

Tune’s pricing in India is very different from that of its home base, Malaysia. “Tune’s India pricing will be set by the real estate the product sits on. We are looking at a range of between US$30-60. We will always try to be 15-20% lower than what the competition is doing,” said Umesh Luthria, business head, Apodis Hospitality.

Under the terms of the strategic partnership, five hotels will be operational by December 2010, with a staggered roll-out of the subsequent 15 hotels to be completed by end-2012.

While sites are yet to be finalised, initial hotels will likely be located in and around Amritsar, Ahmedabad, Bengaluru, Chandigarh, Chennai, Delhi, Goa, Hyderabad, Indore, Jodhpur, Kochi, Mumbai, Pune, Pipavav, Raipur, Thiruvananthapuram, and Tiruchirapally.

Tune India’s gross floor area is approximately 300-square feet per room, with an average build box cost of Rs12.5-13 lakh, excluding land. Hard cost per key is Rs9-9.5 lakh.

Tune, which prides itself on its tag line ‘Five-star sleeping experience at a one-star price’ is reported to be building its first five-star in the Malaysian town of Kota Baharu.

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