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Budget Hotel Chain Tune Hotels to Expand in the United Kingdom to
Capitalize on Growth Opportunity in the Country

The Budget Hotel Industry in the UK Currently Represents 15%
of Total Rooms as Compared to 33% in the US

By Eugene Mahalingam, The Star, Kuala Lumpur, Malaysia / Asia News NetworkMcClatchy-Tribune Regional News

Jan. 03, 2012--PETALING JAYA (THE STAR/ANN) -- Budget hotel chain Tune Hotels aims to expand its presence in the United Kingdom (UK) to capitalise on the growth prospects in the country.

"The budget hotel industry in the UK overall is still under-represented. In terms of percentage of overall hotel rooms, budget hotels only make up approximately 15% of total rooms, compared to 33% in the United States and 27% in France.

"What this means is that there is significant growth scope for the budget hotel industry to thrive," Tune Hotels group chief executive officer Mark Lankester told StarBiz.

Lankester said the group was eyeing new hotels inside and outside of London.

Within London, he said, the group planned on opening hotels in Paddington, King's Cross and St Pancras.

"Edinburgh in Scotland and Liverpool are scheduled to open late 2012 or early 2013. With a name like Tune Hotels, we have to have one in the birthplace of the Beatles."

Despite the budget hotel industry being under-represented, there are however large existing budget hotel chains in Britain with as many as 500 to 600 hotels.

"We're tiny compared to the existing budget hotel operators in Britain but our business model is different, where we unbundle almost everything and offer choices and options at great value with quality rooms and locations," said Lankester.

Lankester also said the expansion to Britain was to take advantage of the fact that London would be hosting the Olympics this year, which is expected to boost the demand for budget hotels.

"The opportunity of the London Olympics will without a doubt be something many hoteliers would go for. We will hopefully have three to four hotels open in London prior to the Olympics."

Going forward, Lankester said he expected the occupancy rate for the group's hotels to be just under 100%.

"London received 23.2 million visitors in 2010 and is a global city popular with travellers. Having the Olympics is great, but we are in business for the long term and thanks to recommendations from our guests, we see growing international demographic for our hotels outside of Europe and Asia Pacific.

"The number of tourists from Latin America are among the fastest growing for us," he said.

Last week, Tune Hotels announced that it had opened its second London property at Liverpool Street.

The hotel, situated 500m away from Liverpool Street station, has 183 en-suite bedrooms, all 20% larger than its sister property. It also has twin bedrooms.

The group intends to replicate the success of its first budget hotel at Westminster, which has achieved average occupancies in excess of 96% since opening in August 2010.

At 35 (RM173) per night, it also has a 550 sq m private courtyard garden accessible to all hotel patrons.

"Our new hotel in Liverpool Street has a private garden with seating for 40-50 people, which is unheard of for a branded budget hotel in London," he said, adding that the brand also received the 2011 Tripadvisor Certificate of Excellence for its customer service.

Room rates at Tune Hotels' Westminster property starts from 35 to 45, which Lankester said was considered "attractive" within the central London area.

Given Tune Hotels' affiliation with low-cost carrier AirAsia via the Tune Group, the private investment entity of Tan Sri Tony Fernandes, it is common to see both brands leveraging each other in terms of marketing and promotional campaigns.

"Like low-cost airlines, marketing and communication is key to reaching both existing and new guests alike. As a new branded budget hotel chain from Malaysia, we will continue to be aggressive and invest in branding and communication in our markets.

"As part of the Tune group of companies, we try to assist and help group related enterprises and AirAsia's omnipresence has no doubt been of great assistance."

One example where both brands leverage each other is the "BIG Loyalty Programme," where guests earn points each time they stay in one of the group's budget hotels.

"Likewise, every time someone flies with AirAsia, they earn points. These points can be redeemed for free Tune Hotel stays and free AirAsia flights," said Lankester.

The Tune Hotels group has hotels in Malaysia, UK, Indonesia, Thailand and the Philippines.


(c)2012 the Asia News Network (Hamburg, Germany)

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