AirAsia founder in budget hotel venture with Dubai govt
Wednesday, 27 June 2007
SINGAPORE, June 26 (AFP): Malaysia's Tune Hotels.com said today it has set up a 50-million dollar joint venture with the Dubai government and a Singapore business tycoon to open 30 budget hotels in Southeast Asia.
The joint venture will expand the no-frills model of Tune Hotels.com, which was founded by a group of investors including AirAsia chief Tony Fernandes.
"Our value proposition is a five-star bed at one-star price," Dennis Melka, director and co-founder of Tune Hotels.com, said at a media briefing.
Tune Hotels.com will hold a 20 per cent stake in the venture while Istithmar PSJC, the investment arm of state-owned Dubai World, will take 40 per cent.
The remaining 40 per cent will be held by City e-Solutions, a hospitality business that is majority-owned by city developments, which is part of Singapore tycoon Kwek Leng Beng's Hong Leong Group.
Under the venture, the three partners aim to open 30 hotels under the Tune Hotels.com brand in popular Southeast Asian destinations over the next 24 months.
"The hotel sector is crying out for clean, safe, branded budget accommodation in major cities," said Richard Johnson, managing director of Istithmar Real Estate.
"The Tune Hotels.com brand will deliver that need in destinations across Asia," he said.
According to Melka, the budget hotel sector in Asia has lagged the development of the no-frills airline sector in the region, with travellers unable to find low-cost accommodation when they travel.
The joint venture will expand the no-frills model of Tune Hotels.com, which was founded by a group of investors including AirAsia chief Tony Fernandes.
"Our value proposition is a five-star bed at one-star price," Dennis Melka, director and co-founder of Tune Hotels.com, said at a media briefing.
Tune Hotels.com will hold a 20 per cent stake in the venture while Istithmar PSJC, the investment arm of state-owned Dubai World, will take 40 per cent.
The remaining 40 per cent will be held by City e-Solutions, a hospitality business that is majority-owned by city developments, which is part of Singapore tycoon Kwek Leng Beng's Hong Leong Group.
Under the venture, the three partners aim to open 30 hotels under the Tune Hotels.com brand in popular Southeast Asian destinations over the next 24 months.
"The hotel sector is crying out for clean, safe, branded budget accommodation in major cities," said Richard Johnson, managing director of Istithmar Real Estate.
"The Tune Hotels.com brand will deliver that need in destinations across Asia," he said.
According to Melka, the budget hotel sector in Asia has lagged the development of the no-frills airline sector in the region, with travellers unable to find low-cost accommodation when they travel.