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Goodbye guesthouse as Phuket changes Tune

Phuket's Simple Tune: Kiss Guesthouses Goodbye

Friday, December 18, 2009
CAN Phuket's two-star resort market stave off the aggressive Tune Hotels invasion? Is this the death knell of the Patong guesthouse?

What McDonalds did to the burger, AirAsia and Tune are doing to the airline industry and low-star to no-star accommodation.

Now Tune Hotels, the AirAsia of double-beds, power showers and "a five-star sleeping experience at a one-star price,'' is about to burst upon the local holiday island scene.

Thai-listed company Evolution Capital is to spend $200 million opening 44 franchised Tune Hotels in five countries in the next few years . . . and its a safe bet that about half those will be in Thailand, starting with Phuket.

We've heard the whispers for more than a year now, and if Tune lives up to its promise of quality living at as little as $3 a night, the pressure will be intensified on the present independent guesthouses.

As the Accor chain's three-star ibis model is already demonstrating at two resorts on Phuket, dramatic increases in quality and reductions in cost are possible with a franchise approach and centralised accounting.

If it's any consolation to the small, independent Phuket proprietors, they are to be involved in an experiment that should change the whole world's approach to low-cost accommodation. Good luck.

Like guinea pigs, though, the guesthouses are considered expendable.

Depending on locations, Evolution Capital says, each hotel will have between 79 and 150 rooms, adding that they are hoping for occupancy of 70 to 80 percent, with an average room rate of $20.

Besides newly set up hotels, half would be existing hotels to be refurbished as Tune hotels.

As well as Thailand, where about half of the 44 hotels will be built, Evolution also plans to expand the brand to China, Bangladesh, the Philippines and Indonesia.

Seven Tune Hotels already operating in Malaysia and Bali, average 95 percent occupancy, indicating that the Patong guesthouse should start quaking on its wood-pile foundations now.

Where AirAsia and Tune Hotels have the edge is in offering packages of fares and accommodation, plus consistent quality. The brand has plans for other markets being served by AirAsia, including India, Australia and Britain.

Observers are tipping that Tune could have more than 100 sites operational by 2014.

Tune boasts five-star quality beds, power showers, central and strategic locations, clean environments, and 24-hour security.

Just like 7-Eleven, expect to see a Tune on every second corner all over Phuket sometime soon.
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