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Hotelier IHG kicks off Chinese-focused Hualuxe roll-out

By Neil Maidment

LONDON (Reuters) - InterContinental Hotels Group will open up to three of its new Hualuxe hotels in China in 2015, the first of a Chinese-specific brand it hopes to eventually roll out globally.

IHG, one of the world's largest hoteliers with brands such as Holiday Inn, Crowne Plaza and InterContinental, said the first Hualuxe hotel will open within weeks and has identified over 100 Chinese cities for sites in the next 15-20 years.

The company's Greater China business, which comprises the mainland, Hong Kong, Macau and Taiwan, is a key growth prospect for IHG and generated 12 percent of the group's $668 million (524 million pounds) operating profit in 2013. The region already has 227 hotels open across its brands and 180 more in its pipeline.

"We see the China opportunity of one based on urbanisation, GDP growth, a rising middle class and increasing consumption," IHG's Greater China chief executive Kenneth Macpherson told Reuters.

"Hualuxe has a very high priority, we see it as complimentary to the existing portfolio and there is a real opportunity there."

Hualuxe will cater for the Chinese traveller, with tea houses the focus over hotel bars and lobbies that look more like gardens, as IHG aims to tap into a rising number of domestic travellers that is forecast to hit 3.3 billion in 2015.

IHG, whose biggest market is the United States, said it had 24 Hualuxe hotels in its pipeline, including in major destinations such as Beijing and Shanghai. The firm has signed deals with property investors once a month on average since the brand was unveiled in 2012, Macpherson said.

Room prices will vary by city but will sit broadly between the Crowne Plaza and InterContinental brands. The price of a king bedroom at a Crowne Plaza in Beijing is 532 yuan (55 pounds) and 750 yuan at an InterContinental.

Should the brand succeed in China, Macpherson said there was a "great opportunity" to expand Hualuxe in global travel hubs such as Paris, Milan and London, aimed at Chinese business travellers and luxury shoppers.

Shares in IHG, which earlier this year rebuffed a takeover approach and has faced pressure since to consider merging with a rival, have risen around 35 percent in a year to 2,570 pence, valuing the business at just over 6 billion pounds.

(Editing by Vincent Baby)