Tune Hotels vs. Backpackers’ Guesthouses

AirAsia is one of the most successful airlines in Asia. This budget airline has transformed the aviation industry in Southeast Asia. No content with his success, AirAsia’s founder Tony Fernandes is venturing into hospitality industry with his Tune Hotels.

Like AirAsia, the Tune Hotels group is run on the “no frills” concept. From what I heard, Tony Fernandez plans to set up Tune Hotels in every city served by AirAsia. This will put them in direct competition with budget guesthouses long favored by backpackers to Southeast Asia. How will they fare? Since I personally am a backpacker and MBA student, I am interested in analyzing the two options we have.

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Price

Tune Hotels’ webpage says that the room rate starts “from RM9.99”. That’s cheaper than what backpackers’ guesthouses could offer. So, price-wise, Tune Hotels win, provided that you book your room well in advance. (I am assuming that Tune Hotels have the same pricing policies as AirAsia.)

Flexibility

Well, I said “book well in advance.” If you don't, you may have to pay several times more than the amount advertised. One thing Tony Fernandes hasn’t learned is: backpackers’ don’t like fixed itinerary. We change our plans frequently. That will make booking in advance difficult.

Experience

When I visited Bali in 2005, I stayed in guesthouses that were transformed from traditional Balinese houses, and equipped with aesthetic traditional furniture and gardens.

Tune Hotels are likely to have similar, nondescript design everywhere they are built. The staffs are likely to wear the same set of red uniform. Also, since Tune Hotels emphasize (over-emphasize) efficiency and cost-cutting, their employees would have to abide by lots of "standard operating procedures", making them more robot-like.

Location

Guesthouses are usually small. They can be found in metropolis like Bangkok, medium size cities like Chiang Mai, small cities like Chiang Rai and even villages like Mae Salong. Tune Hotels are big, so you are less likely to see one in Chiang Rai. Mae Salong? No way!

Brand

AirAsia is big in Malaysia. Tony Fernandes is one of the most famous Malaysian entrepreneurs. Apparently, the Tune Hotels group can leverage the brand power of its sister company. Malaysians who fly with AirAsia have a very good chance of checking in Tune Hotels too.

But wait a minute. Majority of backpackers are Westerners, with a significant number from Japan. The AirAsia/Tune Hotels brand may have little impact on them.

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So, how will Tune Hotels fare? I believe they will do well in Malaysia, but more work is needed in Bali, Thailand or Vietnam. For now, I will still choose guesthouses over Tune Hotels.

Employees of Tune Hotels are unlikely to be as friendly as this pretty lady of Shinsane Guesthouse in Mae Salong.