CREATING a five-star hotel on a compact site in a dense commercial area was an enormous challenge for architect Donald Fan (now director of Paliburg). ''An extra 5,000 sq ft would have been good,'' he said. But he and interior designer Wayne Choon rose to the occasion and the results speak for themselves. Whether you arrive by tram, which terminates at the roundabout outside, by Mass Transit Railway, a short walk away, or by taxi, at the impressive marble-paved driveway at the rear, this five-star hotel offers a taste of European grandeur combined with traditional Oriental hospitality. Mr Fan and his team used mirrors, double-height ceilings and reflective finishes such as gold and silver to create an illusion of spaciousness. The imposing foyer introduces guests to a world dominated by sparkling Swarovski crystal chandeliers, marble columns, floral tapestry upholstery and Louis XIV-style furniture. Dramatic window walls let in a little of the excitement from outside, without disturbing the serenity of the hotel. The staircase, which sweeps to the upper levels, has an unimpeded view of the open plan hotel. ''The area is defined by glass and mirrors, making the foyer appear larger than it is,'' said Mr Fan. ''Ten-metre-high ceilings add to the feeling of space and create a noble effect.'' Each of the 425 guest rooms has an individual touch - an original oil painting mural on the wall over the bed. In fact, there are more than 2,000 original works of art throughout the hotel. Maple wood cornices and mirror frames, gold fittings in the bathrooms, each bedroom with bay windows, also set the new hotel apart. The food and beverage outlets also have individual themes. In Cafe Rivoli, a refined coffee shop, four stained-glass domes and high ceilings give an air of space and opulence. The carpet is swirled with colour, and wall-mounted lattices, flowers, trees and greenery combine for a restful garden effect. A gilded lift takes the visitor to the Regal Palace on the third floor. It is touted as the premier Chinese restaurant but the decor is a contemporary cross between Western and Chinese style. Higher still is the Riviera, the hotel's premier restaurant on the 31st floor. The theme is opulent with a huge sun mirror shining on the high ceiling, and carved chairs are upholstered in peach silk with a woven flower design. A view of the swimming pool from the restaurant highlights the Mediterranean aura which pervades the hotel.