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Category: Hotels, Posted:08 Feb 2010 | 06:00 am

Recently we ran a story on emerging hosptialty chain Tune Hotels regarding an environmental issue with local residents and the Government, along with pricing and commercial disputes with local economy hotel operators. Tune has contacted us and provided a full explaination of their side of the story which we are publishing in it's entirety. Certainly its a breath of fresh air to see proactive acknowledgement of issues which create conflict betwen international operators and locals and think you will fine this an intersting read.

"In regards to the news in Bali Post Daily on 19 & 23 December 2009 concerning contamination in 3 resident's wells in Ciung Wanara Street, Puri Khyangan – Kuta, we have taken this situation very seriously from the onset. When the situation with regards to oil in the water of the 3 affected families first came to our attention, we immediately asked our main contractor who constructed our hotel, PT Jaya Kusuma Sarana (JKS) to facilitate an immediate investigation. When they found no structural issues with the oil tank, attached see the test result letter on 21 December 2009 from CV Remaja Perdana Engineering, we went still further and undertook further appropriate professional testing of the water to ascertain the possibility of anything that would resemble oil in the water. The results of the test have been again negative, see attached test result letter from UPT-Lab Analitik Universitas Udayana. However, once more in our duty as good corporate citizens, we have embarked on yet a further test by a separate professional laboratory, Sanglah Hospital laboratory, to seek yet another point of view. The results of this professional test will become available to us within the next 10 days.
In parallel with these tests we have met with the relevant authorities together with our contractors on;
a) 19 December 2009 we have met with the 3 affected families: Bapak I Made Darnata, I Wayan Sunarya, I Made Nuada together with Bapak Nyoman Windyan (Ketua Lingkungan), Bapak Nyoman Graha Wicaksana (LPM Kuta) with regards to their grievance. The decision was made at that time to reconvene on 22nd December together with Bapak I Gede Suparta (Lurah Kuta).
b) 21 December 2009 with Bapak A.A Bagus Oka Sutama (Badan Lingkungan Hidup) and test samples were made. What was witnessed however was that there was some spillage of diesel fuel around the filling nozzle to the main subterranean diesel tank.
c) On 22 December 2009 with Bapak I Gede Suparta (Lurah Kuta) to dialogue on how we can best work with them to provide all assistance despite the tests being negative. During the meeting with Bapak I Gede Suparta (Lurah Kuta) it was agreed that we had not shirked our responsibility, as evidenced by all the actions above, and that we had embarked upon responsible actions to ensure that we via our contractors, JKS, had not in any way even accidentally engaged in activities which may have resulted in these concerns.
In an open dialogue witnessed by Bapak I Gede Suparta, there is full agreement that the tests have shown that there has not been evidence of oil in their water supply. However the families have nevertheless the perception that there perhaps may be a difference. Given this, in the spirit of neighbourliness and as new entrants to the community of Kuta- Bali, we have asked how we may be of assistance regardless. What has transpired is that the families are of the opinion that deepening their wells will solve the perception of their water. In short we have made the offer of assisting them to deepen their wells at our cost, which will start on 26 December 2009 (a good day in Balinese tradition), as agreed with the 3 families with PT Jaya Kusuma Sarana.
Whilst we are pleased to see that professional evidence indicates no mishaps have taken place, we are mindful of the situation facing our neighbours and are eager to help. Whatever the problems that have arisen with their water well, we feel the need to assist the 3 families to achieve their aim of fresh water and on the 26th December have been in the process of fulfilling that promise.
There have been a number of press articles concerning this matter in the last several days and most recently in an article on the 23rd December 209 continuing to mention the oil contamination caused by oil solar tank. To clarify in summary, there is no issue concerning the tank, but as detailed above, there was a case of some spillage on the ground. This has been sorted out.
We have been steadfastly looking to find solutions and whilst we have been busily engaged in this, it is important for us to clarify the responsible steps that we have taken thus far in a measured approach of dialogue with the authorities, engagement with the families, engaging the services of professionals, all in the spirit of the Balinese community members.
In addition, we would like to clarify the article on the 28th December with regards to our pricing.
Tune is a limited service product. What this means is that we eschew the traditional amenities that our guests have told us are not important to them and pass on the cost savings directly to our guests. These amenities include ballrooms, business centres, conference rooms, swimming pools, gymnasiums and so forth. In addition we are very mindful of the massive carbon footprint that traditional hotels produce via extraordinary energy use and try to reduce energy costs as much possible via assisting our guests to save on air-conditioning and reduce effluent into our sewerage systems through lowering laundering of towels, etc. We provide very competitive room rates which are not inclusive of air-conditioning or towels and amenities and by paying extra assist our guests to play their part via a “pay for use” system.
Our overall pricing policy is driven very much by our business model. Our model is that bookings are driven through our website at and our booking engine deploys a proprietary demand based pricing model. What this means is that consumers, similar to the low cost carriers, who plan in advance can obtain very attractive room rates for stay dates booked significantly in advance. Bookings made at a late stage, i.e. for only a week in advance or if a walk-in, attract a higher price, depending on the demand for room bookings on that specific date and generated by the software within our bookings engine. For our Bali hotels a single room rate starts at Rupiah 68,000 per night, not including charges and taxes, again provided you book significantly in advance and the other end of the spectrum on late bookings or walk-in bookings, we would naturally be comparable with other 3 star hotels.
Our mantra is that we do provide a “5 Star Sleeping Experience for a 1 Star Price”, meaning that for attractive room rates for advance bookings, we offer a great night's sleep with great beds. We are not a 5 star hotel with the amenities and services of a 5 star hotel.
The macro economic reality is that the world's low cost carriers are driving the growth of passenger numbers and tourists overall. Some of these passengers will opt to stay at limited service hotels and book considerably in advance, like Tune, but some clearly will opt to stay at higher end hotels and resorts and locally flavoured Melati styled accommodation. We have seen that the growth in total passenger numbers and in addition, our own aggressive marketing and advertising strategies, tends to benefit the entire tourism ecosystem. First of all, oftentimes we are full on 100% occupancy and other hotels, inns and resorts are automatically beneficiaries from our aggressive marketing. Secondly, the guests at any of the Tune network end up actually spending more time and money in the local economy as they have saved on “in-hotel” costs, specifically room rates. The multiplier effect within the local economy can be quite significant.
Travellers and tourists are considerably smarter today and know what they want and are in a position to make informed decisions. A Tune Hotel will not fit the needs and expectations of all. Each class of hotel in, for example Bali, has its specific lure and attractions. What we do offer is additional choice in the hospitality spectrum and that choice comes with a limited amount of services.
I trust this clarifies the situation and lays rest to the issue.
Thanks and Best Regards,"
Mark Lankester
Group CEO
Tune Hotels Group

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