04 November 2009

A NASCENT Asian budget hotel chain aims to open its first hotel in Melbourne within a year, as part of big expansion plans. Tune Hotels, founded two years ago in Malaysia, has seven hotels operating in South-East Asia, with 64 more under development, most in Asia - and Melbourne is firmly in its sights.

The chain works closely with low-cost airline AirAsia, which already operates into Australia, including 11 flights a week to Melbourne.

Tune's group chief executive, Mark Lankester, speaking during a recent visit to Melbourne, told businessday he had been investigating several sites around the city. ''If we can't buy land, we buy an existing building and convert it,'' he said.

While describing prices in Melbourne as steep, Mr Lankester said the aim was to be open for business by next October.

''The Australian market is superb, and Melbourne is a fabulous city. It makes a lot of sense to be here. People can fly very affordably. We aim to break into Melbourne and then Perth,'' he said.

Mr Lankester, a Malaysian citizen, previously ran Warner Music in South-East Asia. He was persuaded to lead Tune Hotels by Tony Fernandes, the founder of AirAsia. The two men were previously colleagues at Warner Music - hence the name ''Tune''.''

Tune's pricing structure is demand-driven: the earlier you book, the cheaper prices you get. The emphasis is on full occupancy.

As well, the company markets its ''green'' credentials, and guests pay extra for using energy-consuming things such as air-conditioners.

The cheaper rates are also bankrolled by advertisements, with ads in all hotels.