New World Hospitality is resolute in its plan to spend US$1.1 billion to double its hotels portfolio despite the bleak economic outlook in the US and Europe. Sonia Cheng Chi-man, chief executive of New World Group's hotel arm maintains that the firm intends to increase the number of hotels it manages to 40 in the next five years. 'The US and European problems may affect the market in the short term,' said Cheng, a granddaughter of property tycoon Cheng Yu-tung. 'We have recently seen more people knocking on our door with offers.' Last month, New World Hospitality completed the US$229.5 million purchase of hotel management firm Rosewood Hotels and Resorts. The deal took place about a week before Standard & Poor's downgrade of the sovereign credit rating for the US from AAA to AA-plus. Cheng said the Rosewood deal increased the company's management portfolio to 29 hotels. It involved the purchase of the management rights for 20 properties in North America, Mexico, the Caribbeans and Saudi Arabia. Before the deal, the company managed hotels in mainland China, Vietnam and the Philippines. Rosewood, which operates high-end hotels such as The Carlyle in New York and Rosewood Mansion on Turtle Creek in Dallas, will complement the group's other hotel brands - New World and Pentahotels. Cheng said the group was seeking to buy some management companies, which would help it expand its footprint in Europe and in gateway cities on the mainland. Eric Wong Chun-yu, a former head of UBS real estate research, said a possible double-dip recession in the US and a lack of solutions to the worsening debt crisis in Europe did not favour hotel management comapnies. 'If [US Federal Reserve chairman Ben] Bernanke says the US will keep interest rates at nearly zero for the next two years, it means any real economic recovery may not happen for at least four or five years later,' Wong said. 'It is safer to have some bricks and mortar on any portfolio.' To be sure, an economic downturn would offer more opportunities to buy assets at lower prices, he said.