Wednesday, April 14, 2010

They listen to their customers

07 April 2010

What’s the secret behind the success of Tune Its Group CEO shares with LAVIINIA DHANAGUNAN the five key factors that go into the planning of the hotels

THE one tune that Mark Lankester needs time to hum, uncharacteristically, is the one of his friendship with AirAsia figurehead Datuk Sri Tony Fernandes.

The group CEO of Tune gives a reflective sigh when asked about his giant leap from music to hotels.

For once, the clear-minded and laid-back entrepreneur doesn’t have an answer off the cuff but has to sift through his memory before replying.

When the answer comes, it’s quite clear that he and Tony share a brotherly bond, one that started from childhood when Tony was Mark’s senior at Alice Smith International School here as well as at boarding school, Epsom College and London School of Economics in the United Kingdom. They also crossed paths at Time Warner, specifically at Warner Music.

When Tony was the South East Asian regional vice-president for Warner Music Group from 1992 to 2001, Mark was the North Asia chairman and CEO from 1998 to 2002.

Tune Hotel
Tune Hotel

“It took me maybe all of five seconds to think about his offer to head Tune when he came to see me in 2006,” says the 44-year old.

Four years on, the limited-service hotel chain is growing by leaps and bounds but the ambitious man behind it all thinks the company has a long way more to go.

Driving force:

Some may wonder what the secret of their success is as Mark and Tony are from the music industry.

“Working at senior management level at Warner Music meant we got tough training. We’re taught to pre-plan and to expect the unexpected. After all, when we say something, we have to deliver it as well,” says Mark, adding that one of the things that he values from his 20-year stint at Warner Music is learning that strategic planning is the key to success when delivering numbers.

Tune is opening 15 hotels in the United Kingdom, 44 hotels across Southeast Asia and 30 throughout Indonesia, as well as planning for a 50 per cent increase in staff members.

“There’s always the prospect of stumbling when starting in new markets. The important thing is to learn from it and move forward,” he says.

Learning is also something that happens through his interaction with the staff at Tune The team works in a relatively open space together with Mark and he recounts an incident with a wide smile.

“I wanted to say something to one of my team leaders and I looked up, saw him on the other side of the room and gave him a shout. It was effective but a couple of people jumped in their seats too. Now, I message people on their computers even if they’re in the room,” he says.

Budget or not?

Mark shakes off the notion quite emphatically that Tune is a budget hotel.

While people may think it fitting to lump the hotel in the category because of its price, the fact is that what goes into the boxy rooms are actually not quite budget standard.

In fact, in its latest hotel in Danga Bay, Johor, guests can find bedding equal to that in a four- or five-star establishment.

“If you make your bookings just before your trip, you’ll find that the prices are about a fifth of the price of a three-star hotel,” he says.

He still considers Tune to be a start-up business and feels that things are moving along slowly for the chain, contrary to popular opinion.

“If you break down our progress, you’d find that Tune has only set up seven hotels in the last two years. The rest, be it in Indonesia, Southeast Asia or the United Kingdom, are still either in development or planning stages,” he explains.

When planning the hotels – from location to accessorising the rooms – there are five factors that must be included in the checklist, the result of a survey of AirAsia customers done in 2006. These include a great night’s sleep, power shower, key locations, security and black-out curtains.

In the questionnaire, guests were asked to list what was important to them for under US$30 (RM99.15) a night and the information was used to get an idea on what to focus on for the Tune brand image.

The company genuinely looks forward to hearing what their guests have to say about the rooms.

“A fact that rarely gets mileage is that our rooms are custom-designed by our guests,” says Mark.

“When we get our hands on the comment forms, we pick up on the comments and try to improve ourselves.

“For example, when we designed our flagship hotel, it was done so with the vision that it was to be hip and trendy. That’s why we fitted the bathroom area with black tiles as that was one of the things that our guests commented on.

“We learned from it and now, our hotel bathrooms all boast of a white interior,” he says.

The key thing, though, is to get the right feedback from guests.

Breakdown of guests:

According to Mark, Tune is not just frequented by backpackers but also by single people and families.

A survey carried out around this time last year showed that about 67 per cent of their customers were people under the age of 35 and about 40 per cent of the customers earned less than US$500 (RM1,657) a month.

Mark says that Tune Hotels allows people to take more weekend breaks than they normally can afford and lets them enjoy far more for the same cost, thanks to their prices.

There’s a gleam in his eyes when he talks about the two categories of backpackers — professional backpackers and “flashpackers”.

“Everyone knows and can spot professional backpackers. They are the ones who routinely travel on the cheap, and are prepared to go all the way to get as much as they can from their travels.

“Flashpackers” is a term used to describe kids who are used to a certain level of lifestyle and whose parents carry platinum credit cards.

While pro backpackers have no qualms about sleeping six to a room and sharing a bathroom with an entire floor, “flashpackers” must have their hot showers and personal space.

“It’s currently the trend for these kids to take a year off university and do a gap year travelling, etc. They are also the kind of people who enjoy staying at our hotels as we give them all they need at an unbelievable price.

Looking forward:

Two more hotels are scheduled to open mid May and early June — one in Danga Bay, Johor, and the other in Kota Damansara, Selangor. Both boast designs suited to their locations.

City hotels need to be in a great location – near shopping areas and be accessible to a variety of food and beverage outlets too. This description aptly describes the Kota Damansara outlet — opening June 1 — as it’s just a short drive away from the Curve, IUtama and all the local eateries in the area.

The Danga Bay branch which is set to open on May 15, while conforming to the need for larger rooms, does not have a swimming pool.

“This 218-room hotel, we feel, will serve as an option for Malaysians who want to visit Universal Studios without feeling the strain on their wallets.

“Having done a little research of all hotels around Resort World Sentosa, I found that the cheapest option is S$240 a night (RM580),” he says.

“If you factor in the book early rule we espouse, an early booking can cost around RM60. The hotel also offers transport to Universal Studios 16 times a day.

“A lot of thought has gone into the design of rooms for the Danga Bay hotel and it’ll definitely be a new experience for Tune customers.”



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