Watch out Ginger, here comes Tune
In the coming three years, Apodis will invest about $200 million for 20 properties with a debt equity ratio of 60:40.
The Indian budget hotel segment is set for more competition with the entry of Malaysian hotel chain Tune Hotels.com. Mumbai-based Apodis Hospitality Corp (AHC) has entered into a master franchise agreement with the south east Asian firm to launch ‘Tune’ hotels in India.
Umesh Luthria, business head and chief investment officer, AHC, the hospitality arm of investment firm Trikona Capital, told DNA Money that the first 5-6 hotels will be operational by the end of the next year.
“We are currently negotiating for six sites across Mumbai in addition to pursuing locations in the country’s southern and northern regions,” Luthria said. AHC has worked out a per room cost starting Rs 14.40 lakh for its budget hotels which is at par with what the Taj Group subsidiary, Roots Corporation Ltd, has been working on for Ginger properties.
“These will be a completely new breed of hotels designed keeping in mind the Asian customers’ requirement of a value-for-money proposition. 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 said. He said that the rooms will carry a price tag that will be 20-25% lower than that offered by competitors.
In the coming three years, Apodis will invest about $200 million for 20 properties with a debt equity ratio of 60:40. The company is planning around 2,000 rooms in cities such as Mumbai and Delhi and around 1,000 rooms in Hyderabad, Chennai and Bangalore. “The smaller markets will have between 200 and 500 rooms,” Luthria said.
In the second phase of investment, the Apodis-Tune joint venture plans to introduce its India Thematic Development Fund, the proceeds of which would be utilised to develop another 50 Tune hotels in the country.
Under the current arrangement, Apodis will own the assets and Tune Hotels.com will be the branding partner. The management of these hotels will be handled by a separate company, Tune Hotels India Ltd, which will also look after technical and development services and project management consultancy.
Apodis will look at setting up 250-300 room hotels in the key metros, followed by 150-200 keys and 100-150 keys in the next two city segments respectively. Tune Hotels.com which has a tagline ‘a 5-star sleeping experience at a 1-star price’ runs seven hotels across Malaysia and Indonesia and has plans to start 64 hotels outside of Malaysia.
Tune’s entry into the Indian market underlines the trend of hotel companies from the Asia Pacific (APAC) region making a beeline for the Indian market. Tune is the second hotel group from APAC in the last fortnight and the fourth one in the last couple of years to enter India. The recent entrant is Thailand’s U Hotels & Resorts while Singapore’s Fraser and Sri Lanka’s Aitken Spence have already announced plans.
Umesh Luthria, business head and chief investment officer, AHC, the hospitality arm of investment firm Trikona Capital, told DNA Money that the first 5-6 hotels will be operational by the end of the next year.
“We are currently negotiating for six sites across Mumbai in addition to pursuing locations in the country’s southern and northern regions,” Luthria said. AHC has worked out a per room cost starting Rs 14.40 lakh for its budget hotels which is at par with what the Taj Group subsidiary, Roots Corporation Ltd, has been working on for Ginger properties.
“These will be a completely new breed of hotels designed keeping in mind the Asian customers’ requirement of a value-for-money proposition. 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 said. He said that the rooms will carry a price tag that will be 20-25% lower than that offered by competitors.
In the coming three years, Apodis will invest about $200 million for 20 properties with a debt equity ratio of 60:40. The company is planning around 2,000 rooms in cities such as Mumbai and Delhi and around 1,000 rooms in Hyderabad, Chennai and Bangalore. “The smaller markets will have between 200 and 500 rooms,” Luthria said.
In the second phase of investment, the Apodis-Tune joint venture plans to introduce its India Thematic Development Fund, the proceeds of which would be utilised to develop another 50 Tune hotels in the country.
Under the current arrangement, Apodis will own the assets and Tune Hotels.com will be the branding partner. The management of these hotels will be handled by a separate company, Tune Hotels India Ltd, which will also look after technical and development services and project management consultancy.
Apodis will look at setting up 250-300 room hotels in the key metros, followed by 150-200 keys and 100-150 keys in the next two city segments respectively. Tune Hotels.com which has a tagline ‘a 5-star sleeping experience at a 1-star price’ runs seven hotels across Malaysia and Indonesia and has plans to start 64 hotels outside of Malaysia.
Tune’s entry into the Indian market underlines the trend of hotel companies from the Asia Pacific (APAC) region making a beeline for the Indian market. Tune is the second hotel group from APAC in the last fortnight and the fourth one in the last couple of years to enter India. The recent entrant is Thailand’s U Hotels & Resorts while Singapore’s Fraser and Sri Lanka’s Aitken Spence have already announced plans.