Tune Hotels Targets 15 Australian Properties

Tune Hotels is looking to expand in the Australian market following the successful launch of its first local property in Melbourne. “We hope to soon announce two new properties in Sydney and potentially one in Perth,” Tune Hotels CEO Mark Lankester said.

He added: “We’d like to do a nice round number of 15 in Australia over the next few years.”

Mr Lankester said since opening late last October, the 225 room Tune Hotel Melbourne has been running an occupancy rate of above 90% while achieving an average room rate of AUD100.

“There are times when we over achieve that – Melbourne is such a rate-driven city.”

Mr Lankester said the success of Melbourne, which Tune funded and built as a mixed use development, including 45 apartments it sold off, had aroused the interest of prospective partners.

“The whole model is not asset heavy but when entering a new market we choose to own,” he said.

“Now we have the first one in there we are getting requests to see if we are interested in franchise  or management deals.

“So we are beginning to engage quite a lot.”

He said Tune “has never been a great fan of country master franchise” and for Australia may look at a state-based structure.

Tune is also looking hard at the United States and currently speaking with interested parties.

There are now 42 Tune Hotels in eight countries.

It is an economy hotel chain started by AirAsia founder Tony Fernandes that, like a low cost carrier, also works on the ancillary services payment model.

You get a room and a bed but there is a ‘pay as you use’ system is in place for optional energy-consuming amenities.

  • Mr Lankester is speaking at No Vacancy in Sydney on March 26.
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