NO-FRILLS budget chain Tune Hotels has entered into a 60-40 joint venture with Apodis Hospitality to open 22 hotels in India, beginning with the first in Ahmedabad in 1Q2013.
Mahesh Gandhi, founder, Apodis Hospitality, said: “Tune aims to offer five-star beds at one-star prices. The aim is to offer rooms at US$50 or less.”
Each hotel will have 100-250 keys depending upon the size and needs of the market in which it is based. The chain, popular in Malaysia, is making inroads into Asia-Pacific (TTG Asia e-Daily, February 1, 2013).
Its entry into India brings it head-on with existing budget to midscale hotels in the market including Lemon Tree Hotels, Red Fox Hotels, Citrus Hotels and Tata Group’s Ginger Hotels.
BT Ramnani, director, Vensimal World Travel Agents, said: “The economic growth in India is spawning a whole new breed of small businessmen and traders who are travelling across the country. This is a large segment of budget-conscious people who look for good location and comfortable rooms at very reasonable prices. The scope for budget hotels and mid-market properties is unimaginably large.”
PK Mohankumar, COO, Gateway Hotels, said: “India is an undersupplied market and we need at least another 120,000 hotel rooms by 2015, of which half should be budget and mid-market hotels.”
According to research by ICICI Direct, the mid-market segment represents about 29 per cent of India’s total room inventory, growing at a compounded annual growth rate of 3.7 per cent from 2002 to 2011, while the budget segment accounts for six per cent of all rooms.