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The Beijing-based Diaoyutai State Guesthouse said it may launch a new hotel brand to exploit the country's deluxe hotel and holiday resort market after joining forces with MGM Mirage.

 

Under an agreement signed earlier last week, the Las Vegas-headquartered hotel and gaming company will form a joint venture - Diaoyutai/MGM Grand (Beijing) Hotel Management Co Ltd - with the state guesthouse, Diaoyutai said in a statement on its Website.

 

The ownership proportions were not disclosed.

 

"We will focus on the luxury hotel market and probably start in the country's major cities, targeting high-end business and leisure travelers," Liu Yaning, an official with the Diaoyutai management bureau, told Shanghai Daily yesterday in a phone interview.

 

"And we are thinking about launching a new hotel brand."

 

The guesthouse, which is under the Ministry of Foreign Affairs, is used to house heads of state and other important visitors.

 

The venture's business strategy will not include casinos, which are banned on the Chinese mainland.

 

MGM Mirage now owns and operates 22 properties in the US states of Nevada, Mississippi and Michigan and has investments in three other properties, in Nevada, New Jersey and Illinois.

 

The company also has a 50 percent interest in MGM Grand Macau, a US$975 million hotel-casino resort currently under construction. The legendary Macau casino king Stanley Ho owns the remainder.

 

Global hotel groups have been taking a more aggressive approach to expanding their China business after witnessing robust demand from domestic and international travelers.

 

Starwood Hotels & Resorts Worldwide said recently that it plans to triple its China presence over the next few years. The leading US hotel and resorts operator, which now operates 34 hotels under six brands in the country and has another 37 under construction, aims to bring its nine brands to China and increase its total portfolio to 100 by 2010.

 

Paris-based Accor SA, Europe's biggest hotel group, announced plans for another 61 hotels across the country and says it will increase its China presence to more than 100 over the next three years.

 

Hilton Hotels Corp, one of the earliest international hoteliers to enter China, also has ambitious expansion plans, with 30 facilities in the pipeline.

 

And Steigenberger Hotels AG, a European family-owned hotel group, said last month it is in talks with several Asian hospitality companies, including Shangri-La Hotels and Resorts, to tap business opportunities in China.

 

(Shanghai Daily April 12, 2007)