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The first low-cost Tune Hotel in Australia opened in Melbourne on Monday with $39-a-night rooms.
The Tune Hotel Group is an offshoot of budget airline AirAsia and has a payment model similar to cheapie airlines.
Hotel guests initially pay a minimal room rate and then add on extras such as towels, toiletries, Wi-Fi and satellite television.
One of the first guests to check-in was Sarah Keis, in Melbourne from the Gold Coast on a family holiday. "I've never stayed at a Tune Hotel before but I know of them from Asia," she said.
"It is the price that attracted me and even if you pay for all the extras it is still a very cheap way to stay in the middle of Melbourne.
"It's nicer than I expected, it's modern, good quality and obviously all brand new."
The extras can be bought separately or in a "comfort pack" that costs $11 at the time of booking and $15 at the check-in counter.
Other add-ons include a breakfast pack, early check-in and late check-out. But in-room phones are not available, even as extras.
The $39 promotional rate for room applies only until October 31 when the basic double-room rate will start from about $65.
Overseas, Tune Hotels also charge extra for airconditioning but health and safety regulations mean that cannot be done here.
There are 33 Tune Hotels in eight countries around the world and within a decade there could be 20 in Australia, according to the hotel group's chief executive, Mark Lankester. The next is planned for Sydney in 2014.
The Tune Hotel is at 609 Swanston Street, Carlton, near Melbourne University, and has 225 rooms, a lounge, computer kiosks and launderette.
The interior is funky and colourful, with the red-and-black colour theme of Tune Hotels. A cafe that will serve buffet breakfast will open in six to eight weeks.
Manager Nathan Copsey said the doors opened at 7am and bookings had been strong.
"We've also got very big demand for the weekend," he said.
At the other end of the hotel scale, plans were announced on Monday for a $300 million, 4.5-star residential hotel complex at the Docklands called The Altus.
It will have 299 apartments and 281 hotel rooms and suites under the Parkroyal brand.
The 37-storey complex, on the corner of Harbour Esplanade and Dudley Street, will include a swimming pool, gym, restaurant, cafe, bar and rooftop skydeck.
Work is scheduled to start next year for completion in 2016.