For Mark Peters, a Melbourne fitout and supply player, the idea for a funky hotel chain of pre-fabricated rooms first took shape in a Chinese factory.

The fruit of that vision, now backed by BRW Rich List partners, Sam Tarascio's Salta Properties and the Victor Smorgon Group and with Mantra as its manager, will soon emerge on Walker Avenue in West Perth. 

Construction begins this month for a 126-room Tribe hotel. But it's not a typical building job, nor is it a typical hotel. 

Everything above the second floor is manufactured in a southern Chinese factory, shipped and put together in Perth.

The first two-levels, lobby, common space and the lift core are constructed in the usual manner.

Above that, 63 fully-fitted two-room modules, each complete with a hallway section, will be "stacked up like Lego", Mr Peters said.  

"The way we've designed our hotels they don't look like a bunch of shipping containers stacked up," he said.

"Once you put them in place, unless you understand construction, you wouldn't know they were built using modular construction."

High-end materials

Each steel box is fitted with services and finished with high-end materials – natural stones, marbles, leathers.  

Combined with the faster method of assembly, the hotel is cheaper to produce. The result, Mr Peters said, is a more affordable rate for patrons. 

Modular designed hotels are well-established in Europe – in Britain, Germany and the Netherlands especially. Visits there reinforced Mr Peters' idea. 

In Australia modular hotel sector is in its infancy. Fremantle has the boutique Hougomont while there is the Art Series' Schaller Studio in Bendigo.

Mr Peters says the insulation and acoustic qualities of modular hotels are superior to conventional hotels.

"At the end of the day people are chasing a good room rate and a quality product. If it is offering that, they couldn't care less how it is constructed."

Built by ProBuild, the West Perth hotel will be finished by the end of 2016, with a $30 million end value.

More planned

Tribe plans another hotel in Hobart, on Sandy Bay Road near Salamanca Place and has its foot on an inner-city Melbourne site.

How Mr Peters came to be a hotel developer is a from-the-inside-out story that begins with the pre-fabricated box itself.

He has imported fit-out products from China for the property and hotel sectors for more than decade but realised he could add value, and his thinking cohered around modular housing. With his knowledge of the hotel sector, and the requirement for consistent floor plates, it was a natural fit.

He then build the Tribe brand around the box.

It's a "disruptive" concept that will challenge "the stale ways ingrained in Australian hotel industry".

The final piece of the equation is Mantra Group, operator of Australia's second largest hospitality network, which will manage the hotel as its first external brand.

Chief executive Bob East does not embrace the "disruptive" tag as readily Mr Peters, but is keen on the new market segment.

"It was a nice opportunity to step out into something that we probably weren't inclined to do under our own steam," he said.