A budget hotel chain affiliated with Malaysian low-cost carrier AirAsia is seeking to draw Southeast Asian tourists to Japan after opening its first hotel in the country in August.
The Tune Hotels chain opened the 140-room hotel in Okinawa after refurbishing an existing facility and plans to open more in Tokyo and other areas by employing the management model used by budget airlines, focusing on cost-efficiencies and convenience for budget tourists.
“We are targeting a ratio of Asian tourists to total guests of 50 to 60 percent,” said Shoichi Kojima, the Japan head for Tune Hotels chain Red Planet Hotels.
Domestic travelers account for around 90 percent of the guests at Tune Hotel Naha Okinawa, but a second hotel, which will open in Tokyo’s traditional Asakusa district in 2015, is expected to attract more guests from neighboring countries, Kojima said.
“Combining the airfare of a low-cost carrier and (room charges for) our budget hotel, a trip from Southeast Asia to Japan would total as little as $100, which is affordable for people in the middle class,” he said.
The Tune Hotels chain operates 36 budget hotels in eight countries with the LCC-style rate-setting system, providing only limited services and charging for additional ones.
Rooms with minimal facilities are available at the Naha hotel for as little as ¥3,500. Reservations can be made in five languages, including Chinese, Indonesian and Thai, through its official website, and various local payment methods can be used.
Fontz Holdings Inc., a music software distributor and parent of Red Planet Hotels Japan, announced the partnership with Tune Hotels in April as part of a business diversification plan.
The Malaysian hotel brand appealed to Fontz as it is well known in Southeast Asia and its expertise in running accommodation facilities is unique in the Japanese hotel industry, said Masahiko Tando, a Fontz public relations executive.
The opening of the Tune Hotel in Japan took place after Japan in July started waiving visa requirements for short-term tourists from Thailand and Malaysia, and began granting multiple-entry visas good for three years to visitors from the Philippines and Vietnam. The visa ploy is part of Japan’s efforts to more than double visitors from Southeast Asia to 2 million in 2016 from 2012 levels.
Norio Nakayama, an executive director at the Japan City Hotel Association, said he is closely watching how Tune Hotels develops, while acknowledging the potential of the innovative approach.
“There is still a question regarding whether the concept really works as a business,” said Nakayama, noting that domestic guests account for a much of the Japanese lodging market despite an increase in foreign budget tourists.
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