The Tune budget travel brand has taken a major hit with former franchisee Red Planet Hotels pulling its 24 Southeast Asian hotels out of the group and launching a new fully-inclusive low-cost brand.
Red Planet’s Senior Vice President – Investments, Mark Reinecke, said after five years it time to part and grow independently.
“We have had a difference of strategy with Tune which is looking laterally to Europe and has been spending quite a bit of time building up that business.
“Meanwhile, we are very much a Southeast Asian business and thought it was time to part ways.”
In what’s been a major logistical exercise across the Philippines, Thailand, Indonesia and Japan, the three month re-branding of all Red Planet Planet Hotels finished this week.
Tune Hotels has been left with just 23 properties, mostly in its home market of Malaysia, and the United Kingdom, where it plans to open 25 new properties over the next five years.
It’s part of the Tune Group, started by AirAsia founder Tony Fernandes.
But where AirAsia is an aviation powerhouse, Tune Hotels hasn’t grown at nearly the same rate so the Red Planet move, though not unexpected, is a significant blow.
Red Planet has a completely different brand identity to Tune, says Mr Reinecke.
It is firmly aimed at travellers from the Millennial generation.
“The physical look and feel is very different,” he says.
Another difference is that Red Planet is all-inclusive and offers a loyalty program while Tune charges extra for just about everything except the bed and room.
Red Planet is also very big on the latest technology with free “super duper fast internet access” while it places a greater emphasis on where people book.
“Our new booking engine is slimmed down, it takes very few clicks to book, and we’ve just launched an app,” says Mr Reinecke.
“Overall we think we have a simple and very, very effective product where technology plays a very large role.”
He says rooms cost $20 to $40 price range, the average property is 165 rooms and to watch out for further openings of flagship properties this year in Tokyo and Bangkok.
Asia has another new hotel brand.