Marco Polo Hotels is to develop a luxury flagship hotel in the $3.2 billion Gateway II development in Kowloon, the first new hotel to be built in the territory for three years. Marco Polo Hotels president Michael Kalyk said the company's parent, Wharf (Holdings), had decided to change the Gateway project from being purely commercial to accommodate a hotel, serviced apartments and offices. 'Hotel guests are willing to pay a premium if they can reach retail stores and offices quickly,' he said. The new 330-room deluxe hotel, to be named the Marco Polo Grand, will occupy the top 14 floors of the third tower at Gateway II. It will be Marco Polo's fourth locally operated hotel alongside The Hongkong Hotel, The Prince and The Marco Polo, all on Canton Road in Kowloon. There will also be 550 serviced apartments in the upper half of Gateway II's first two towers.