29 August 2010 Last updated at 22:06 ET

Budget customers call the hotel Tune

By Susannah Streeter Business reporter, BBC News

Susannah Streeter finds out just how 'no-frills' the Tune Hotel is

A budget hotel has officially opened its doors in the UK - becoming the latest to take the low cost airline business model to the hospitality industry.

For a no-frills hotel, the decor of the Westminster Tune is undeniably tasteful.

It also boasts of a central London location, and from some rooms a view of St Paul's Cathedral can be glimpsed.

Prices typically start at £35, but the cost of the room doesn't end there.

To stop the price escalating, guests may have to find room in their suitcases for the little extras that are complimentary elsewhere.

The Tune hotel charges £1.50 for a towel and soap, £3 each day to use the television, £1 per stay to use the hairdryer, £2 for a safe and another £2 to store a suitcase on checkout.

Kettle ban

The management say their research showed that many people do not need all the hotel services that traditional chains offer, and end up paying for what they don't use.

"It took us a long time to look at the hotel business models and disassemble them and we took out all the stuff people said they didn't use," said Mark Lankester, chief executive of the Tune Hotel Group.

"We are managing this just like a budget airline and that means keeping costs low. We outsource most services and encourage people to book early to get the best deals''.

There are seven Tune hotels already operating in Malaysia and two in Indonesia, with the company claiming they offer five-star luxury at one-star prices.

The brand has been built in Asia ahead of its expansion into the UK

But despite the pale green wall paper, huge mirror, and walnut effect shelves, there is no escaping the fact that the rooms in the Westminster hotel are small.

Measuring 8.2 square metres, they are almost all taken up by the double bed.

There is a firm mattress and soft duvet , but depending on the guest's girth, it can be a bit of a squeeze to get round to the other side.

Within each room is a corner bathroom, just big enough for a tiny sink, toilet and shower, which is so powerful it can spray out into the room unless the door is firmly shut.

Some guests may be disappointed that for a hotel in the capital of a tea-drinking nation there is no facility to brew a cuppa in the room.

Travel kettles are banned and the only option is to buy instant drinks for £1 from a vending machine in the lobby or use a coffee shop next door.

''This hotel isn't for everyone. The room is too small to fit in a travel cot for example so it won't really appeal to young families," said Tom Hall, travel editor at Lonely Planet.

"But it is ideal for tourists and business travellers who just want a nice stylish and clean room to rest their heads for a night or two.''

Location problem

The Tune hotel group plans to open 15 hotels in London alone, and some will have bigger rooms.

The business model is not entirely new in the UK

But the company will face stiff competition in the already crowded budget hotel market.

The Easy hotel chain is well-established and expands to Edinburgh this week.

It offers a basic rate of £25 which is available if you book early. Daily room cleaning costs extra, so does a remote control for the TV, but you can watch it without one and a towel comes free.

Travelodge currently offers rooms at a promotional price of £19 and, like the Premier Inn chain, their rooms are family-friendly and they provide most extras free of charge.

"There is a lot of competition in the budget hotel sector, but with the Olympics coming up and London continuing to be a popular destination for international tourists, it does seem to be a sensible city to expand in.

"The problem will be finding the right sites for the planned 15 hotels in the capital,'' added Tom Hall.

Eventually the Tune group wants to expand right across the UK.

And so far booking has been brisk, despite the unusual cost structure.

But not everything is rationed.

Guests have been assured that one essential will come free of charge, and that is the loo roll.