MORNING Star is developing a mid-price chain of inter-Asian hotel properties through its hotel management arm, Vista International Hotel. The Hongkong-listed company plans to achieve its target through management agreements and franchises. Vista International currently manages five hotels in Australia and two hotels in China offering a total of about 2,000 rooms. According to Morning Star chairman John Lam Kam-ma, four of the Australian hotels posted weak performances last year due to the seriously depressed economy in Australia and the massive increase in the supply of hotel rooms throughout the market. The company has introduced streamlining measures into the properties to contain operating costs and to increase operating efficiency. In line with the group's focus on property development as its new line of business, work is expected to begin on the redevelopment and conversion of the Enrico Hotel in the Philippines into a residential and commercial property. In China, the first phase of its property development in Zhongshan, which comprises garden houses and low-rise apartments, has been completed and is 85 per cent sold. According to the group's finance director Ricor da Silveira, phase one of the development is expected to generate an annual profit of $400 million. The development has a gross floor area of 100,000 sq m. In Suzhou, Morning Star and Suhua Industrial Company are pursuing acquisition of development and resale land with a total area of about 380,000 sq m in the Kun Shan development area. ''We plan to develop six residential blocks with a total gross floor area of about 12,700 sq m in the eastern city district of Suzhou for domestic sale,'' Mr Lam said. ''Pre-selling of the units has already commenced.'' However, as 80 per cent of the group's revenue is derived from its travel services, the company will continue to strengthen its tour operations. ''We are currently actively negotiating to set up joint-venture travel agencies in China. About 20 per cent of our outbound tours travel into China, and the figure could be much higher if not for the lack of flight capacity into the mainland,'' he said, adding that demand for travel into China was high. Mr Lam also lamented that travel agents in the territory continued to experience low profit margins due to escalating overheads and stiff competition in the local travel and tourism sector. To increase its market share, the company has launched a membership programme named Morning Star Traveller Plus to introduce value-added services to customers and to strengthen its customer base. The company is also finalising a joint venture with Vietnam Airlines to launch a travel agency business in Vietnam. ''This will reinforce Morning Star's presence in Vietnam and strengthen its Asia-Pacific network,'' said Mr Lam. The group recorded an attributable profit of $7.72 million for last year, an increase of 89 per cent over $4.08 million in 1991. Operating profit for the year ended December included an exceptional gain of about $8 million from the disposal of a 38.4 per cent interest in the Punta Baluarte Resort in the Philippines. The disposal was part of the group's drive to decrease its exposure in the country in view of the prolonged stagnation of the Philippines' hospitality industry.