'We will create and manage small luxury hotels as part of our mixed-use developments in both Hong Kong and the mainland,' said Brian Williams, managing director of Swire Hotels.

Opening this July, The Opposite House in Beijing will be the first property to be managed by the new company. The 99-room boutique development lies within a mixed-use development at The Village at Sanlitun, the company's first retail development on the mainland.

A 117-room luxury hotel will follow suit in Hong Kong's Pacific Place next year, while a third, a 100-room hotel, is also to due to come on stream in Taikoo Hui, Guangzhou in 2010.

According to Mr Williams, a move into this area is not a complete novelty for Swire.

'We've had an interest in hotels for some time,' he said. 'As we developed our new mixed-use developments, we had the opportunity to look at creating something very interesting within the hotel market.'

In particular, he noted that small luxury hotels would serve as an additional attractive proposition in this context. They would also offer an alternative to hotels both in Hong Kong and on the mainland, which were generally large-scale. 'At the same time, [we can] build up our own management team,' he said.

It is also Swire Properties' strategy to develop the mainland market as much as that in Hong Kong.

'Swire Properties has a strategy to invest in mixed-use developments within the mainland and therefore it made sense for us to do the same thing with hotels within those mixed-use developments,' said Mr Williams, who spent 17 years with the Mandarin Oriental Hotel Group and served as chief executive of the Scotsman Hotel Group.

Mr Williams noted that one benefit of branching out into the hotel business was that all hotels would be incorporated within Swire Properties, with the company acting as developer, owner and manager. It also provided an ideal opportunity to deploy the company's property management experience in the world of hotel management.

'Hotels are buildings,' Mr Williams said. 'What we have are teams of people with lots of experience in Swire Properties who are dealing with construction and design,' he said. 'We [also] have a very strong track record of building excellence.'

In terms of the hotel business, the company can capitalise on its experienced building and project management team.

In the longer term, the organisation aims to continue to develop hotels in both the mainland and Hong Kong as opportunities arise within its mixed-use developments.

Rather than create a strategy that demands a certain number of hotels in a certain number of years, the aim is for the business to grow from a very strong foundation. With that in mind, Mr Williams said: 'We also have a second, 343-room lifestyle business hotel that we're opening in Hong Kong.'

Named East, the hotel is due to open in Taikoo Shing next year, again as a direct result of Swire Properties' significant business interest in this district.

'It makes good sense to put in extra services and facilities for office tenants,' he said.

The company is also developing a business plan to launch Swire Hotels in Britain next year. The aim is to focus on small, upscale hotels in regional British towns and cities.

Swire hopes to create quality products in cities that are generally under-served by quality hotels, according to Mr Williams.

'The cost of entry is also attractive to us and we think that there is a very interesting opportunity for us,' he said.

'We are primarily financial investors and this is a good financial proposition.'