Tony Fernandes’s chain to give Tata’s budget hotels competition

Tune Hotels, run by Air Asia Bhd ’s Tony Fernandes, plans to take on Indian branded budget hotel chains including Tata’s Ginger and Lemon Tree Hotels Pvt. Ltd ’s Red Fox by opening 30 properties in the next three years with investment of $30 million, up from one now.

This comes as Air Asia is collaborating with the Tata group to set up a domestic airline. It currently has just one property in India, which was opened in Ahmedabad earlier this year.

“India only has three to five branded economy hotel chains as compared to China, which has between 1,000 and 3,000 such hotel chains operational,” said Mark Lankester, chief executive, Tune Hotels Group, in a phone interview.

“It is because of the industry structure that at the moment India has the biggest potential for budget hotels,” he said. “We would be looking at $30 million investment for our first 30 hotels in the first phase. If India grows the way we want it to and if the consumers embrace our business model, it could be the largest single market for us.”

Full report here Mint


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