Asian-based hoteliers are eager to establish their presence in London in an effort to help their expansion into continental Europe, according to property consultant Knight Frank. 'London is the gateway of Europe. It always attracts those who have plans to expand their bases to other European cities,' said executive director Andrew Pang Tze-on. Asian hotel groups, which had already built a strong presence in the region, were thinking of expanding internationally and London would be their first stop, he said, adding that many regional companies were eyeing expansion. Among Asian hoteliers, Hongkong and Shanghai Hotels has expressed interest in gaining a foothold in London after establishing a presence in the United States and Asia. Investors are betting on a better outlook for the industry after a softening in London last year and the first half of this year, according to Knight Frank. The Middle East conflict, the Sars outbreak and general global uncertainty have had an adverse effect on the domestic hotel trade, particularly in London. Average room rates in London fell from #104.92 (HK$1,412) in 2001 to #91.43 last year, according to Knight Frank. This is compared to the smaller fall in Britain as a whole. British room rates fell from #66.63 in 2001 to #63.97 last year. For London in particular, with the decline in overseas visitors last year, occupancy levels were largely maintained at the expense of average-achieved room rates. But the property consultant said London hotels had recorded a small revenue per available room improvement from minus 9.1 per cent over the 12 months to June this year, to minus 8.3 per cent in July. Knight Frank said the hotel industry in London still needed time to pick up but medium-term (2005 and beyond) prospects were more encouraging amid improving domestic consumer consumption growth and a return to earlier levels of international travels. Mr Pang said there was a limited supply of quality hotels available in London. Instead of buying existing hotels, Asian hotel groups would either look for sites to develop new hotels or obtain management contracts as a way to enter the market. But he said it would not be easy as good opportunities were scarce due to the limited supply of quality sites in London.