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Dennis Melka, Co-founder of Tune Hotels.Com, Shares with
Cornell Nanyang Institute Students What it Takes
to be an Entrepreneur
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19 March 2009 - Dennis Melka of East Pacific Capital Pte Ltd, a venture capitalist based in Singapore, gave an inspiring lecture on 13th March which launched the Dean’s Distinguished Lecture Series at the Cornell Nanyang Institute of Hospitality Management (CNI). The audience comprised of the Master of Management in Hospitality (MMH) students, MBA and undergraduate students at the Nanyang Business School; the general public is also invited to participate in future lectures. Please visit our website to register for the lectures.

Mr Melka has founded companies in hospitality, financial services, agriculture, software development and sustainable forestry. He focused his lecture on the challenges and opportunities of a start-up company and provided a case study of Tune Hotels.Com, a company he co-founded in 2005.

Tune Hotels is an economy limited service hotel brand started by Melka with the principal shareholders of Air Asia, the #1 low cost carrier in the Asia Pacific region. In late 2005, they saw a significant gap in the hospitality market in SE Asia. Whilst there was incredible selection and choice at the four and five star level, there was no “value-for-money” chain in the region that provided clean, safe, branded accommodation to the burgeoning “value-based” travel market created by the dozens of low cost carriers started across the region since 2002. 
 

Tune Hotels.com - Downtown KL
316 Jalan Tuanku Abdul Rahman
Kuala Lumpur, Malaysia
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Tune Hotels.Com also sought to change the traditional concept of a “budget” hotel by providing five star luxury beds and power showers in a space-efficient room and charging for amenities such as air conditioning and towels to keep costs low. Since the launch of its flagship property, Tune’s model has been enthusiastically endorsed by the travelling public and the company has posted strong operating results. 67% of Tune hotels customers are under 35; while 38% of the guests make less than approximately USD 500 per month. Over 80% of Tune’s customers are local travellers seeking a clean, safe and secure hotel in a city centre location. The weekends see more leisure travellers, whilst the week accommodates a large portion of SME travellers.

The Master of Management in Hospitality (MMH) students, some 10% of whom go on to become entrepreneurs after graduation, received an enriching insight into what is required of entrepreneurship from Melka. 

He spoke of the drive, determination, sheer will and hands on approach required to make the venture work. Melka stated that there will always be investment capital for good ideas backed by passionate entrepreneurs. “Even in this economy?” asked one student. Yes, he replied, “if you have a good idea and willing to dedicate yourself to it, money will find you, or you will find money”. He illustrated this by saying that in one venture, he and a business partner approached seventy four potential investors before the seventy fifth investor, finally said “yes”. 

Strong internal drive and passion about the business are a necessary part of being an entrepreneur. Melka had established tycoons down to numerous industry-expert consultants tell him that a budget hotel chain modelled ala Tune Hotels would never work in Asia. The Tune model continues to grow around Southeast Asia with two Bali properties coming on line later this year to complement the Malaysian portfolio. The hotels have been profitable from Day One of the flagship hotel in Kuala Lumpur, Malaysia in 2007, according to Melka. Target hotel cash-on-cash yields are 20% - 30%.

To achieve these results, Melka reiterated to the students that persistence, a keen focus on driving costs down, and aggressive revenue management to stimulate the market were critical to building a successful business in the highly price-sensitive market of Southeast Asia.
 

About Tune Hotels.com

Tune Hotels.com is a limited service hotel brand that provides “a 5-star sleeping experience at a 1-star price” - providing high quality accommodations with the basic essentials.

We are a growing chain of hotels that have embraced the limited service model used by low cost airlines and employ a self-service online booking system that encourages guests to book early to enjoy exceptionally low prices. Using the demand-based pricing booking system, guests are free to book rooms as early as possible at prices starting from RM9.99 (or even lower during promotion periods) directly at our website www.tunehotels.com.

Each Tune Hotels.com hotel feature convenience store and food & beverage outlets run by established chains, though brands running these outlets vary from hotel to hotel. Tenant brands that operate in Tune Hotels.com hotels include 7-Eleven, Subway Restaurants and Gloria Jeans Coffees. Other facilities and services in our hotel include free internet access at the lobby (in room WiFi available for rental on prepaid bases - RM12.00 for 24 hours), ATM, airport transfers and city tour services.

Please visit the Cornell-Nanyang Institute of Hotel Management’s website for more information on the other speakers in the Dean’s Distinguished Lecture Series 2009.

About Cornell-Nanyang Institute of Hospitality Management

The Cornell-Nanyang Institute of Hospitality Management (CNI) is jointly operated and governed by Cornell University’s School of Hotel Administration and Nanyang Technological University’s Business School. Located in Singapore, CNI is strategically positioned to develop leaders, managers and entrepreneurs for the Asian hospitality and tourism industry. CNI offers three hospitality education programs designed to alleviate the severe shortage of qualified talent that is currently plaguing the hospitality industry in Asia and the Middle East. 
Equivalent to an MBA, the one year Master of Management in Hospitality (MMH) program prepares students to be theory-based, action-oriented leaders of executive management teams and entrepreneurial ventures in the hospitality and service industry. CNI MMH students spend six months at Cornell University in Ithaca, New York and six months at the Nanyang Technological University in Singapore, thus taking advantage of educational and networking opportunities in both Asia and North America in a single year. 

The Professional Development Program (PDP) offers three-day courses that cover different aspects of hotel management. PDP teaches cutting-edge management techniques, presented by internationally recognized faculty members and industry leaders. Participants can earn Cornell certifications in Financial Management, Food, Beverage, and Restaurant Management, General and Strategic Management, Human-Resource Management, Marketing, Operations Management and Property-Asset Management and Real Estate. CNI has hosted over 1000 PDP participants from nearly 40 countries in the last two years. The PDP will be held from July 23 to August 5, 2009 in Singapore.

The General Managers Program (GMP) is designed for hotel general managers of full service hotels and their immediate successors. Participants in this 10-day program concentrate on strategic hospitality management issues, work collaboratively to expand the foundation of their knowledge, and produce new solutions to the challenges they face. GMP 2009 in Singapore will be offered from July 20-30, 2009. 

Please visit the Cornell-Nanyang Institute of Hospitality Management website for more information.

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Contact:

Illka Gobius
Tel +65 9105 8268
illka@verve.com.sg

 

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