Luxury hotel group Le Meridien Hotels and Resorts has earmarked US$550 million for global expansion by 2004, with Hong Kong and China its major targets. The London-based group resumed its presence in Hong Kong after it was awarded a 10-year contract by the Information Technology and Broadcasting Bureau to manage the 176-room high-tech hotel within Cyber-Port at Pokfulam. It is the group's first expansion into Hong Kong since its two management hotel contracts were taken back under the wing of the owner, the Regal Hotel group, in 1994. Michael Sagild, managing director Asia Pacific, said the global expansion plan would need about US$1.3 billion, of which US$550 million would be invested by the group and the rest by its partners. The group has a portfolio of 144 luxury hotels with 38,631 rooms in 57 countries. Mr Sagild said there had been a significant change in its philosophy towards expansion after the group went through an ownership change last year. In July last year, Nomura International acquired Meridien Hotels from the Compass Group for GBP1.9 billion (about HK$20.93 billion). At the same time Meridien Hotels was merged with Principal Hotels, acquired by Nomura International in February last year. 'We are developing two hotels a month and our plan will stretch to 2004,' Mr Sagild said. 'Our emphasis is worldwide distribution and Hong Kong is a very attractive destination.' But the market was competitive and its pricing higher than its comparable locations in the Asia Pacific region, he said. Mr Sagild said no expansion talks were under way in Hong Kong as the group was engaged in the management of the Le Meridien@Cyberport hotel, which was scheduled to open at the end of next year. But the group had an aggressive expansion plan for China with negotiations with different parties taking place, particularly in Shanghai and Beijing. 'These cities need to be captured before we can go into other cities,' he said. Undaunted by the global recession and the devastating impact of the September 11 attacks in the US, Mr Sagild said it was best to enter during a down cycle. The group's profit had dropped by 28 per cent last October from the previous year and the fall had narrowed to 12 per cent in January, he said.