India's first Tune hotel coming up in Ahmedabad

Ahmedabad-based Mudra Real Estates Pvt Ltd (MREPL) has entered into a long-term lease agreement with Apodis Hotels & Resorts Ltd for an under-construction hotel project at '4 D Square Mall' Motera, Ahmedabad. Scheduled to start operations by early 2013, the property will be christened 'Tune Hotel @ Ahmedabad'

The 100-room hotel will be managed by the Indian joint venture company between Apodis and Tune Hotels of Malaysia. Targeted at the budget accommodation segment, Tune Hotels are currently operational in Malaysia, United Kingdom, Indonesia, Thailand and Philippines.

Jones Lang LaSalle Hotels acted as an exclusive advisor to the owner/lessor (MREPL) to facilitate this lease transaction including selection of the lease partner and negotiating the lease on behalf of the owners.

A pan India hotel development company promoted by PRAMA Group and assisted by IL&FS Investment Managers, Apodis Hotels & Resorts Ltd had (in 2009) entered into to a master franchise agreement with Malaysian budget hotel chain Tune Hotels.com to launch ‘Tune’ hotels in India. Part of real estate and infrastructure investment firm Trikona Capital, Apodis was instituted to operate, develop and invest in hospitality assets in the leisure, business class and low-cost segments in the country.

During an earlier interaction back in September 2009, Umesh Luthria, business head and chief investment officer, AHC, had said the company was negotiating for six sites across Mumbai in addition to pursuing locations in the country’s southern and northern regions.

In the ensuing three years, Apodis was to invest to the tune of $200 million for the first 20 properties in a debt to equity ratio of 60:40. The company was planning to have close to 2,000 rooms in cities such as Mumbai and Delhi, around 1,000 rooms in Hyderabad, Chennai and Bangalore. “The smaller markets will have between 200 and 500 rooms,” Luthria had said then.

Apodis is targeting 20 Tune hotels across tier I, II and III Indian cities and after testing the market with this budget hotel product, Apodis-Tune joint venture was to launch an India Thematic Development Fund in the second phase. While the size and time-frame for the launch of this fund was not made public, the money thus raised was to be utilised to pursue development of another 50 Tune hotels across the country.

The arrangement between the Apodis-Tune is such that while Apodis will own / lease the hotel assets Tune Hotels.com will be their branding partner. The management of these hotels will be handled by a separate company under the banner Tune Hotels India Ltd (THIL). Besides managing the hotels, THIL’s scope of work would include handling technical and development services and project management consultancy.

Apodis has already worked out the structure of their upcoming hotels in the Tier I, II and III cities in the country. The company will ideally look to set up a 250-300 room hotel in the key metros, followed by 150-200 keys and 100-150 keys in the next tow layers respectively.

“These will be a completely new breed of hotels designed keeping in mind the Asian customers’ requirement of a value for money (VFM) proposition. The USP is non-dependency on expensive technology and processes that come with hotel out of the APAC region. The average gross floor area (GFA) per key will be 30 square meters including the washroom area. The cost per key will depend on the location in the range of $30,000 to $100,000 i.e. Rs 14 lakh to Rs 45 lakh including land cost,” Luthria had said.

Though positioned as a budget hotel brand, Tune sees itself competing with the likes of three- to five-star category hotels across the markets it intends to operate in. Among potential locations being identified include cities like Amritsar, Bangalore, Chandigarh, Chennai, Delhi, Goa, Hyderabad, Indore, Jodhpur, Kochi, Mumbai, Pune, Pipavav, Raipur, Thiruvananthapuram and Tiruchirapally.

Focusing heavily on optimising costs, the hotels will have a very efficient room to staff ratio. While provisions for food and beverage, meetings and banqueting facilities will be part of the design plan, these will be largely outsourced to third-party operators that will further enhance the hotels cash flow thereby increasing profitability.

Update on May 16, 2013.

Air Asia promoter Tune Group launches first hotel in India

Lifestyle business conglomerate Tune Group (also a substantial shareholder of AirAsia via Tune Air) has opened its first hotel in India. It's hospitality vertical Tune Hotels began receiving guests at its 100-room property located in Ahmedabad that offered pre-opening promotional room rates starting from Rs 599 ($11). Catering to both domestic travellers and overseas visitors, especially members of the large non-resident Indian (NRI) community from Gujarat settled in places like the US, Britain and the Gulf, Tune Hotels will have five to six hotels in Gujarat as part of the company’s 20 planned hotels across India in the next three years. Besides properties in major cities – Delhi, Mumbai, Kolkata, Bangalore, Hyderabad and Chennai – Tune Hotels is focusing on Tier-2 and Tier-3 cities along with hotels in the tourist triangle destinations of Agra, Jaipur and Delhi.