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Tune Hotels to give tourism a boost


( The Star, Malaysia)


PETALING JAYA: A gap in the range of tourism facilities will be filled when Tune Hotels.Com sets up a chain of no-frills hotels in the country and, later, at the rest of AirAsia Bhd’s destinations. 


While Tune Hotels will develop some of the hotels, it will also franchise its brand and expertise to property owners from whom it has started to receive offers. 


“We have about 10 hotels on the table now for us to do deals,” said Tune Hotels major shareholder Datuk Tony Fernandes, who is also a major shareholder of AirAsia. 


“Once you’ve got the model right, you could be rolling it out like McDonald’s,” he told StarBiz yesterday. 


The group’s first hotel, currently being refurbished, is located in Jalan Tuanku Abdul Rahman, Kuala Lumpur. It is scheduled to open in March next year. 


Tune Hotels’ strategy is to locate its hotels in the centre of cities or on tourist belts of resorts, not miles away where land costs may be lower. The offers on Fernandes’ table include properties on well-located sites in cities and resorts. 


“You’d be surprised how many property owners want to convert their office buildings into a hotel to get a higher yield,” he said. 


The Tune Hotels will have same attributes – good location, no frills like gymnasiums or swimming pools and chic, clean rooms in a safe environment. Hence, tourists will know what to expect even if they are booked in a Tune Hotel in a town they’ve not visited before. 


The hotels will also have the same rate structure as AirAsia, that is, starting from RM9.99 for certain off-peak periods. The average room rate will, however, be closer to RM60 a night. 


Recalling the inspiration for the concept, Fernandes said he was in Singapore where he was to check into a budget hotel. “That’s our culture,” he said. But, budget hotels were fully booked, “and I ended up in the Ritz Carlton,” he added. 


“So I was in this big room and I thought I could do exactly the same thing I did in AirAsia – take away the frills and pass the cost savings to the customer,” he said. 


AirAsia has developed into the region’s largest low-cost carrier (LCC). It followed that the LCC Terminal in Sepang is “way, way ahead of (Singapore’s) Changi airport,” he added. 


“A low-cost carrier is one part of the equation in the tourism sector. Budget hotels are another,” he added. 


With a thriving LCC hub in Sepang, it would be a boon to the industry if passing tourists could be convinced to stay for two or three days. “Singapore has done that very effectively,” he said. 


AirAsia is bringing travellers to its hub in Sepang from Bangkok and they are not just Thais but also tourists from Europe. Tune Hotels will also play a role in ensuring that there are ample, affordable rooms that meet their standards. 


The next thing that was needed was open skies to Singapore where AirAsia could tap the tremendous connectivity there for international tourists, he added. 







AirAsia has funds for expansion for Hotel


KUALA LUMPUR: AirAsia Bhd has sufficient funds for fleet expansion and does not have to raise any more capital up to 2009, according to group chief executive officer Datuk Tony Fernandes. 


“We have no immediate plans to raise funds by selling new stocks to shareholders.  


“Our business has never been stronger than it is now. We are happy that our cash flow and capital structure is really good,” he said after a signing ceremony between LogicaCMG and Tune Money Sdn Bhd yesterday. 


Fernandes dismissed concerns raised by analysts on the need for the company to raise capital to fund its latest order of additional 50 A320 Airbus. 


“We are very comfortable with our gearing level and positive cash flow, coupled with good load factor, we do not need to go with the rights issue, secondary or primary market (to raise fund). 


“We probably won't need (additional) funds up to 2009,” Fernandes said. 


He had no doubt that the airline would be able to fill its planes, as there were 500 million people in the southeast Asian region and the potential was huge.  


He added that the additional aircraft would bring in the load factor and business for the airline.  

Fernandes had also expressed confidence over AirAsia's growth, saying that the airline expected to carry about 62 million passengers by 2013.  


He said AirAsia would continue to grow with new routes and more frequencies. 

Fernandes added that AirAsia's board would probably meet on Feb 28 to discuss a proposal to buy 20% of rural carrier Fly Asian Xpress, which runs AirAsia X, a long-haul budget carrier.  


Meanwhile, Fernandes said Tune Hotels Sdn Bhd, the operator of no frills hotels, which is 55.8%, owned by Tune Ventures, was expected to start operations in April. 


“Tune Hotel complements AirAsia very well,” he said, adding that the company had acquired five properties for the purpose.  


One of the hotels in Kuala Lumpur would be the flagship hotel. 

The company would be launching a mock-up of Tune Hotel's room at its office in Petaling Jaya tomorrow. – By Leong Hung yee ( The Star, Malaysia)


How To Get There



Getting there
Take a monorail from Medan Tuanku to Bukit Nanas, then LRT from Dang Wangi to KLCC. Otherwise, take a short taxi ride.

A bustling street highly popular with tourists for souvenirs, great bargains and whole lot of cheap “branded” items.

Getting there
From the hotel, take a leisurely stroll down Jalan Sultan Ismail and turn right before Sheraton Imperial.

A par adise for gastronomers and shopaholics. Has a great mix of swanky cafés, local eateries, branded and budget stores.

Getting there
Take the monorail from Medan Tuanku straight to Bukit Bintang.

Address: No 316, Jalan Tunku Abdul Rahman, Kuala Lumpur

Tel: 03 7962 5888 (Monday to Friday)








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