DENPASAR – Bali Update (www.balidiscovery.com) reports that Tune Hotels in Bali are under further scrutiny by locals.
Following accusations leveled by Kuta residents that the newly opened Tune Hotel in Kuta was contaminating ground water with fuel oil, the two low cost hotels in Bali affiliated with AirAsia have come in for more criticism, this time by legislators who question both the hotel’s environmental practice and its impact on the market mechanism.
Quoted in Bali Post, a member of the Badung House of Representatives alleged that a second Tune Hotel in Legian was “of a five star standard” but offering prices as low as Rp. 230,000 (US$23) a night which compete with locally owned and operated “Melati class” hotels.
Said Puspa Negara, “The Tune Hotel is five star class, but is selling at prices cheaper than Melati class properties.
“That is what you call unhealthy competition. Whatever the reason for this, even in the name of promotion, this is unacceptable. Five star hotels should not sell below a minimum promotional price of Rp. 500,000 to Rp. 600,000.”
Balinese tourism leaders are concerned that the low price approach of Tune Hotels – who brand their properties as “no-frills” hotels, will destroy Melati hotels owned by local businesspeople and destroy the normal market mechanism.
“Don’t let the foreign investment sector run riot and destroy local investments in the process,” said Puspa Negara.
For the Tune Hotel operating in Kuta, Puspa Negara is calling for its operating permits to be withdrawn for violations of local environmental standards until such a time as the owners are prepared to obey local rules.
Bali Update said Melati class hotels have been the more-or-less exclusive preserve of local entrepreneurs, offering low investment and minimum regulated access to the indigenous investors.
Over the past several years, however, rules for low-cost accommodation providers have been manipulated creating loopholes for foreign investors seeking to build low-cost hotels or luxury villa developments.
TravelMole is seeking a comment from Tune Hotels.
