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Saturday, June 21, 2008

Tune to spend RM2b on 100 new hotels

TUNE Group has revealed an ambitious plan to invest RM2 billion in developing 100 no-frills hotels locally and regionally within the next three years.

With two hotels in operation now, the group plans to build half of the hotels from scratch, said its chief executive officer Mark Lankester.

"Our locations overseas include Manila, Clark, Bangkok, Pattaya and Phuket" Mark Lankester chief executive officer TUNE

It has identified locations in Ipoh, Penang, Johor Baru and Miri to open hotels, while regional locations include the Philippines, Thailand and Indonesia.

"Our locations overseas include Manila, Clark, Bangkok, Pattaya and Phuket," Lankester said after the groundbreaking ceremony of its third hotel located near the Low Cost Carrier Terminal (LCCT) in Sepang yesterday.

"We will be starting the construction of two additional hotels concurrently next month in Kuta and Legian, Bali," said Lankester.

The investment per building is between RM16 million and RM20 million.

He said the group is on track to meet its 40 locations acquired and under development by year-end, amid rising cost of raw materials.

"We have to be much better in our marketing and filling up our hotel is the key goal. Then, the economics will take care of the rest," he said.

Founder and director of Tune Group Datuk Seri Tony Fernandes said room rates will remain low and possibly reduced further when more hotels are opened.

"As you get the volume, the cost will be tied to a larger number of properties," he added.

The new Tune LCCT, with an investment value of RM20 million, is expected to tap into the potential 20 million passengers flying through LCCT.

Fernandes said the location had the potential to house two to three Tune Hotels especially since AirAsia was still growing.

"This hotel will be ready for those passengers staying overnight and catching the morning flight out," he said.

Tune LCCT, due to open early 2009, will have 222 rooms with in-house food and beverage retail outlets such as Gloria Jeans Coffee, 7-Eleven and Nelson's Cafe.

Malaysia Airports Holdings Bhd has leased the land to Tune for 30 years.

This will be the third hotel, following the launch of Tune's flagship hotel in Kuala Lumpur and another in Kota Kinabalu.

Hotels in Penang, Kuching and Bali are likely to be operational by year-end.

By New Straits Times (by Jeeva Arulampalam)

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