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Malaysian Tune Hotel Group leads the way for budget accommodation in Australia

Meld Magazine

Fri Dec 13 2013

Tune Hotel Melbourne

MALAYSIA Boleh we hear you say? Daniel Driscoll catches up with Tune Hotel Group chief executive Mark Lankester about the Malaysian company’s planned expansion into Australia, starting in Melbourne. 

Family and friends visiting international students now have a budget option for accommodation with the opening of Tune Hotel in Melbourne.

It may also be a source of pride for Malaysian students, with the offshoot of budget airline AirAsia leading the way as Australia’s first pay-as-you-use hotel.

However, while the concept is an Australian first, it’s not new to the many Australians who have travelled to Europe or South-East Asia.

A large number of guests who stay at Tune hotels abroad come from Australia and New Zealand – attracted by the affordable rates and proximity to city centres.

In Melbourne, the hotel is located at 609 Swanston St in Carlton, just outside the Melbourne CBD, and is close to both RMIT University and the University of Melbourne.

It features nine storeys, 225 rooms, a restaurant, café and residential apartments.

Tune Hotel Group chief executive Mark Lankester said Melbourne presented itself as an opportunity first and the Victorian State Government had been fantastic to deal with.

Other factors were strategic.

“When we were looking at the figures from the airline, Melbourne was just outstanding,” Mr Lankester said.

“The thing that really drew me to it was it’s really unique, it’s funky, it’s got the whole arts capability. Melbourne is very much an event city.”

On the city fringe, Mr Lankester predicts Carlton will only become increasingly trendy.

“We’re seeing lots of F&B going in there,” he said.

He said the local student population would help the business cross-market to potential future students.

“We can market to them in Malaysia, Indonesia as well as provide accommodation guidance in terms of Melbourne,” he said.

Mr Lankester hopes to see 50,000 to 60,000 guests come through Tune’s doors in its first year.

He expects there will be more players in the market but said competition was good for business.

“Virtually everywhere we go there is always going to be industry competition. It keeps us on our toes and we’re not just being complacent,” he said.

Mr Lankester revealed there are plans to open more hotels in Melbourne and other states if this first foray into the Australian market is successful.

At Tune Hotel’s official opening on October 21, Victorian Premier Denis Napthine was pleased the Malaysian company had also chosen Melbourne as the hub for its planned expansion throughout Australia and New Zealand.

Dr Napthine said Tune Hotel Group’s sister company, Air Asia X, was also an important partner for Victoria.

“Air Asia X operates double daily flights between Kuala Lumpur and Melbourne, promoting visitation and linkages between Malaysia and Victoria,” Dr Napthine said.

“Approximately 40,000 Malaysians live in Victoria, almost 8,000 students study in our state’s world-class universities and more than 90,000 Malaysians visit Victoria each year.

“We are the only Australian state with a presence in Malaysia, and our Victorian Government Business Office was instrumental in building a relationship with the Tune Hotel Group to assist their decision to come to Victoria,” he said.