English football club owner targets Nairobi hotel entry

A hotel chain associated with Malaysian tycoon Tony Fernandes, who owns English Premier League club Queens Park Rangers (QPR), is targeting Kenya as its launch pad for entry into the East African region.

The low-budget Tune Hotels is set to open its first African outlet in Westlands next year, with a pricing target of about Sh8,700 ($100) per night.

Mr Fernandes, a Malaysian businessman whose net worth is estimated at $650 million (Sh57.2 billion), has his sights trained on East Africa which he plans to enter through a consortium of three investors with a Sh13.2 billion war chest to be used in opening 15 hotels in the region within five years.

“We are looking to provide local travelers as well as tourists and visitors to Kenya and Nairobi a compelling accommodation option of international quality that is affordably priced,” said Mark Lankester, the Tune Hotels group CEO at a briefing in Nairobi on Thursday.

Construction of the 12-storey hotel began in October last year and is already four floors high.

“We should be ready to open for business by mid next year,” said Mr Lankester.

Tune Hotel Westlands will be a 280-room facility operating on the ‘no frills’ model, where customers only pay for the amenities they use and are charged a discounted fee for early bookings – a model perfected by budget airlines.

Mr Fernandes is the majority owner of QPR and is also owner and founder of budget airline Air Asia. Until this week, he also owned Caterham F1, a Formula One team.

15 hotels

Tune Hotels, a limited service chain, currently has about 45 outlets in Indonesia, Thailand, Australia, Malaysia, Philippines, United Kingdom and India with 100 more planned for construction across in the next two years.

Mr Fernandes selected Imaran Group, a Kenyan investment firm, Queensway Group, a private company based in the UK, and Despec, a global IT, office supplies and real firm as the consortium to lead its East African entry.

Queensway Group, which already manages six Tune Hotels in the UK, is the majority shareholder in the investment consortium called Imba Investments Limited that aims to build 15 hotels in Kenya, Tanzania, Uganda and Burundi.

Imaran Group, which owns Imperial Bank and has also built Imperial Court in Westlands, Kivulini in Thika and the Mvuli in Nairobi, is a minority shareholder in Imba together with Despec.

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Imba Investments, which will be paying royalties to Tune Hotels, says it plans to set up its next hotel in Dar-es-Salaam, Tanzania, with construction set to begin next year.

“We bought the site last week and now we are going to begin construction that will culminate in us opening the hotel in 2017,” said Naushad Jivraj, the managing director of Queensway Group.

Under the hotel’s limited service model, customers get a fixed fee for the room and are then charged separately for food as well as amenities such as hair driers, premium television and toiletries.

The hotel under construction will not have a gym, spa, meeting rooms or even a swimming pool, savings the company says are all aimed at ensuring that costs remain as low as possible.

“Smart and savvy online guests can choose to tailor their stays based on what they really need via our optional add-on policies,” said Mr Lankester.

By opening in Nairobi, Tune Hotels will be joining the likes of Radisson Blu, Villa Rosa Kempinski and Best Western that have recently picked Kenya as an opportune investment destination.

Other international hotel chains looking to open in Kenya in the next two years include Marriot, easyHotels by Lonrho and Hilton Garden Inn, a budget accommodation by Hilton International.

Tune Hotels, however, says it will not be competing for the clientele of these internationally acclaimed brands but instead those customers who want to “enjoy great savings for high quality”.