By Simon Zekaria Of DOW JONES NEWSWIRES LONDON -(Dow Jones)- InterContinental Hotels Group PLC (IHG.LN) Monday said it's launching a new upscale hotel chain in China, as the world's biggest hotel operator by number of rooms strives to become the chain of choice for increasingly-wealthy Chinese travellers at home and abroad. IHG said the chain, named Hualuxe Hotels and Resorts, taps into the growth of domestic travellers within China, the increase in outbound international travel by Chinese people and growing consumer demand for an upscale international hotel brand. It expects the first hotel to open in late 2013 or early 2014 and is in contract negotiations on over 20 sites. IHG added the brand can reach over 100 cities in China in the next 15 to 20 years. "We are filling the gap and providing [Chinese travellers] with an environment to conduct business and socialize in a way that is tailored specifically for them," Chief Executive Richard Solomons said. The chain will follow IHG's franchise operating model, similar to its other brands currently operating in China, it said. Last month, IHG sounded an upbeat tone as it recorded a rise in profit, driven by revenue growth in the U.S -- its largest market -- and in China. The U.K.-based company, which has around 4,500 hotels and a further 1,200 in the pipeline, plans to more than double the size of its operations in fast-growing economies like China, India and the Middle East in the next few years as rising middle-class populations boost traveller numbers. IHG, which operates InterContinental, Crowne Plaza, Holiday Inn, Hotel Indigo, Staybridge and Candlewood hotel chains, has said it has scope to expand, noting that larger portfolios are held by U.S.-based rivals, such as Wyndham Worldwide Corp. (WYN), which owns the Ramada chain, Ritz-Carlton owner Marriott International Inc. (MAR) and Hilton Worldwide (HLT.XX). It has also added a new brand in the U.S. called Even, focused on wellness and fitness, which is expected to open in 2013. It already dominates the mid-market category in the country with Holiday Inn and Holiday Inn Express. The group largely operates a franchise model in partnership with hotel owners rather than owning them directly, but still owns a handful of assets across the world. At 0832 GMT, IHG shares were down 21 pence, or 1.4%, at 1456 pence, in a lower London market. By Simon Zekaria, Dow Jones Newswires; +44 207 842-9410; simon.zekaria@dowjones.com
