TUNE Hotels.Com is planning on opening two more hotels in Penang over the next two to three years, in anticipation of increasing demand for no-frills accommodation.
Its co-founder and director Dennis Melka said the company was targeting to cash in on the lack of quality affordable rooms on the island, which is a popular tourist destination.
“Penang offers a vast array of higher-end hotels for tourists, but when it comes to two to-three-star hotels, there is a lack of quality ones there,”
He said that the company planned on opening a 250-room beachfront hotel and another in George Town with a similar capacity at the cost of about RM20 million each.
“We are probably looking to set up one hotel in 2008 and the other in 2009,” he said. The hotels would complement its first one in Penang with a capacity of 340 rooms in Jalan Burmah, which is expected to open its doors for business by January next year.
“Once the hotel opens, we are confident that it will enjoy a 60% to 70% occupancy rate. By December 2008, we expect to have achieved between RM8 million and RM10 million in gross sales,” he said. Melka added that there was a possiblity of expanding the hotel, which was set up at a cost of RM25 million, by adding another 70 rooms next year.
“All in all, we want to have about 1,000 rooms in Penang over the next four to five years. We expect that most tourists would come from Singapore, India and China,” he said.
Melka said a study on two- to three-star hotels in Penang showed that most had security issues and provided below-par facilities.
“Many hotels I went to had a musty smell in the rooms and the beds provided were uncomfortable. Tune Hotels will, however, provide guests with a five-star bed, complete with attached bathrooms equipped with power showers,” he said.
On whether running a beachfront hotel would prove profitable considering the high cost associated with prime property, Melka was confident that it would see high returns.
“It shows that people do not mind booking and paying in advance if they know they are going to get quality service and facilities,” Melka added.
Tune Hotels.Com will also have Uncle John Kopitiam and MyNews.Com as its retail partners in its Penang operations.
Tune Hotels Sdn Bhd, which owns Tune Hotels.Com’s assets, is 72% owned by Tune Ventures Sdn Bhd.
Source : SUN
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