Yield Management for Hostels

Here's a story from Newsweek about hostels that is related to recent discussions about hostel pricing and yield management:
http://current.newsweek.com/budgettravel/2008/09/southeast_asia_the_3_nofrills.html

...Asian budget chain Tune Hotels uses a "demand-based pricing system," where early online bookers can get rooms for as little as $3 a night (room prices vary for walk-ins, but run about $25). The first property opened in Kuala Lumpur, Malaysia in spring of 2007, followed by an outpost in Kota Kinabalu (in Sabah, a state on the island of Borneo in East Malaysia) this year. In December, five more hotels debut in Malaysia, including in Penang and Kuching.

A Tune Hotel in Kuala Lumpur (Courtesy Flashpacking Life/Flickr)
The hotels have the bright colors of giant billboards. Rooms are spartan to say the least and guests pay only for what they use. That means there are additional charges (about $1.50 each) for towels, toiletries, hair dryers, in-room wi-fi (it's free in the lobby), and A/C (though all rooms come with a standard fan).

What do you think?