INTERCONTINENTAL Hotels Group PLC expects China to account for up to a third of the company's global expansion over the next three years during which the British company plans to add up to 60,000 new rooms.

Much of the growth in China will be spurred by domestic travel partly linked to the mainland's massive road-building scheme, the group's chief executive, Andrew Cosslett, told Dow Jones Newswires in an interview.

With its booming economy, China is at the core of London-listed InterContinental's development plans in Asia Pacific, and will likely become its third-largest market in 10 years after the United States and the United Kingdom, said Cosslett.

"We have a very clear focus in China. There is definitely going to be very significant growth in the chain hotels sector in that market, driven by rising domestic tourism," he said.

The world's largest hotel operator by number of rooms, which owns the high-end InterContinental, Crowne Plaza and Holiday Inn brands, is aiming to manage 125 hotels in China by the end of 2008, a near threefold rise from the current 47. That's an increase of about 16,000 rooms for China alone. The thrust of its China strategy will be tapping into the mass market via its Holiday Inn chain.

Cosslett attributes the thrust for the rapid growth in China's hotel industry to a surge in domestic travel, underpinned by the country's massive road building projects.

"We're seeing a lot of parallels in China with the US in the 1950s, when major cities were linked up by what became the world's largest road network," said Cosslett.

The Chinese government expects highways to span 85,000 kilometers by the year 2020, up from 34,300 kilometers currently, as part of a scheme to connect all cities with a population of over 200,000 people with highways.

"The road building will be a huge driver of hotel demand," said Cosslett.

What is more, Chinese families are starting to take more car-touring holidays, a relatively new trend.