January 5, 2008 -- Millennium & Copthorne Hotels plc owns or manages over 110 hotels in 17 countries around the world. Its portfolio includes the Grand Millennium, Millennium, Copthorne and Kingsgate hotels.

Ng Chee Theam is a vice president of project development of Millennium & Copthorne International Ltd.

Emerging China:
Can you tell me how long has your company been doing business here in China and the first project you were involved in?

Ng Chee Theam:
We have been associated with the hotel business development in China for over seven years. The first project I was involved was Millennium & Copthorne's Millennium Hongqiao Hotel Shanghai in 2001. We value the overall business growth here in China, as well as the investment opportunities and expansion program.

Emerging China:
What are the challenges that you are facing with regard to doing business here in China?

Ng Chee Theam:
China market is fundamental and important to us, as it will constitute a major market of our company's global businesses. For my point of view, the challenges include local knowledge, product competency, maintaining and implementing quality standards and manpower development.

What I would like to see improved is mainly about the governmental regulations to be more forthcoming and systematic, for English to be a wider medium of communication, modern management techniques. And also the improvement to manpower training as it is difficult to employ qualified staff.

Emerging China:
What are the reasons that lead you to be interested in second- and third tier cities?

Ng Chee Theam:
The incremental growth in these cities is much more than major cities and there are potential development opportunities. There are opportunities to develop budget or economy hotels rather than five-star, due to the tremendous demand for this type of accommodation, facilities and service.

The second and third tier cities can offer greater opportunities, lesser competition and sufficient manpower supply. Governmental support and the setting up of new development zone and high tech zone makes good infrastructure for further development.

These cities are a less sophisticated market; nevertheless, it is developing very fast. The challenges are how to provide for a younger clientele as the target audience in secondary cities is the youngsters. Difficulty includes the country' familiarity with international standards.

The other cities in our expanding blueprint include Chongqing, Guangdong, Hangzhou and Xn, all within the next two to three years.

Emerging China:
How is the hospitality industry changing in China?

Ng Chee Theam:
The industry is changing from a purely service industry to a business driven industry. From providing for accommodation and rest, they are now more business sensitive and considering and analyzing returns, investments and asset valuation. The influx of businesses into China and corporate travelers, China is being seen as transforming itself into a number one tourism destination. The presence of all major hotels chains are competing for this business niche.

Apart from international travelers, internal travelers within China have also seen tremendous changes due to more localized conference, events, and sales presentations. The frequency of travel amongst corporate travelers have elevated the demand for better service and accommodation.

Both in terms of corporate and leisure travelers, the trend of large market of using railway or coaches have now been slanted towards a preference for air travel, presenting a surge in demand.

Emerging China:
How is the hotel industry in China's smaller cities different than in Shanghai or Beijing?

Ng Chee Theam:
China is not a single country, but an entire continent. The volume, intensity and development is extremely fast-paced and in terms of construction and completion of the building of hotels.

The differences are in the service delivery. The service standards of the smaller cities are definitely lower than Shanghai and Beijing as there are more corporate travelers in the bigger cities, thus elevating standards and expectations.

I believe some of the differences will still remain in the interim term as standards are constantly being challenged.