Franchise deal to set up 44 Tune Hotels

WEALTH CREATION

From Rupinder Singh

BANGKOK: Tune Hotels.com has partnered Thailand's Evolution Capital pcl to set up 44 budget hotels across Asia under a franchise deal.

Evolution Capital, which is listed on the Stock Exchange of Thailand, will invest US$200 million (RM688 million) and run the hotels using the Tune Hotels.com brand name.

It plans to set up hotels in Thailand, China, Bangladesh, the Philippines and Indonesia.

Evolution Capital, a real estate investment advisory and management firm, is confident of recouping its investment in three to five years, its managing director and president Simon Gerovich said.

Gerovich sealed the franchising agreement together with Tune Hotels.com group chief executive officer Mark Lankester here yesterday.

The first 24 hotels are targeted to be in development by early next year and operational by 2012, while the rest will be completed by 2013. Phuket will see the launch of the first hotel next year.

Out of the 44 hotels, half will be in Thailand, with Bangkok and Phuket identified as key locations. China, Bangladesh, the Philippines and Indonesia will have between five and six hotels each.

Evolution Capital will refurbish existing buildings or build new hotels, with each having between 75 and 150 rooms.

"This expansion affirms our confidence in Thailand's tourism and strong commitment to the Thai market," said Lankaster. "It's a natural fit for Tune Hotels.com to expand our limited-service brand of hotels here."

Tune Hotels.com currently has seven hotels: in Kuala Lumpur city, Kota Kinabalu, Kuching, KLIA-LCCT, Penang, and Kuta and Legian in Bali, Indonesia.

It plans to have about 100 hotels in key cities across Asia by end-2015.

"We are on track to having between 65 and 68 hotels fully operational by 2013."

Tune Hotels.com has also signed a similar deal with Apodis Hospitality to develop 20 hotels in India. It plans to have 70 hotels there eventually.

Lankester also revealed the possibility of opening a hotel in London, the UK, next year, with Australia possibly next.

"With the proliferation of low-cost air carriers such as AirAsia, passengers are now able to travel - in many cases for the first time - between Asia's major cities at incredibly competitive prices. But they are challenged by having to pay 'full service' prices for hotel accommodation when they arrive," Gerovich said.

Thailand Tourism Authority marketing communications deputy governor Juthaporn Rerngronasa said some 12.4 million tourists visited the country between January and November this year, down 7 per cent from last year.