Shangri-La Asia is talking to Swire Properties about operating a second new five-star hotel in Guangzhou, where not a single luxury hotel has opened since 1992.
The facility will be built in Swire's first and only key property development on the mainland, the four billion yuan Taikoo Hui Guangzhou Cultural Plaza in Tianhe district.
Shangri-La is already building a five-star hotel in the long-neglected market.
The 700-room facility is due for completion in 2006.
Giovanni Angelini, the chief executive and managing director of Shangri-La, said his company was in preliminary talks with Swire to obtain a hotel-management contract.
The four-million-square-foot complex - consisting of a retail centre, two office towers, a hotel and a performing arts centre - is Swire's showcase mainland development.
However, the project had foundered in 2002 after top executives at Swire's joint-venture partner - Guangzhou Daily News Group - were arrested over a corruption scandal.