Regal Hotels International Holdings, which is planning Hong Kong's first hotel-based real estate investment trust, plans to spend HK$320 million on improvements to its five hotels. An additional 458 guest rooms will be added to the Oriental, Riverside, Airport, Hongkong and Kowloon hotels to provide 3,826 rooms on completion of the renovation programme. The work, to begin in the middle of next year, is scheduled for completion at the end of 2008. Regal, which may try to raise at least HK$6 billion by listing a hotel-based reit as early as this month, is renovating its properties to boost room rates that are 20 per cent lower than comparable hotels in the same areas. The rates will rise by between 20 and 30 per cent after the renovation work, executive director Poman Lo Po-man said. 'Although room rates have increased by double digits over the past three years, the average room rate for hotels in Hong Kong is still 20 to 30 per cent lower than in 1997,' she said. 'Room rates will continue to increase as new supply of hotels is limited in the next two years and demand for hotels is still strong.' Regal is to refocus its Airport hotel to attracting conferences and meetings in an attempt to improve its occupancy rate which at 60 per cent in the first half lagged the group's overall occupancy rate of 80 per cent. The hotel will target business travellers visiting the neighbouring AsiaWorld-Expo exhibition centre, which opened this year. Ms Lo declined to comment on the details and progress of the reit offering. The real estate trust will be the fifth on the Hong Kong stock market and the first since Great Eagle Holdings raised HK$6.29 billion from its Champion Reit in May. Shares of Regal Hotels climbed 1.28 per cent to 79 HK cents yesterday.