According to the China Tourism Academy, the number of Chinese outbound tourists stood at 97.3 million in 2013 and is expected to grow to 200 million travellers by 2020.

A Hong Kong-based private equity firm is following the money. First Eastern Investment, in partnership with and Gloria Hotels and Resorts, a subsidiary of state-owned food giant Cofco, have set up a fund to raise US$100 million to invest in overseas hotels catering to Chinese tourists, SMCP reports.

"Chinese outbound travel has reached a critical mass to warrant an international hotel brand with Chinese characteristics," Victor Chu, the chairman of First Eastern, told SMCP.

The fund will acquire or make equity investments in 10 to 20 hotels in cities outside China that are popular with Chinese tourists, Chu said. The partners plan to have the entity go public as a hotel company through an initial public offering in London in five years, he added.

"There is no mid-market hotel with Chinese characteristics catering to the needs of Chinese travellers. There is Shangri-La, with Asian characteristics, but that is more high-end," Chu went on to say. "We want to be the first mover to cater for the massive scale of Chinese outbound tourists and offer them what they are looking for when they travel abroad - which is Chinese concierge and Chinese menus," he said.

According to the China Tourism Academy, the number of Chinese outbound tourists stood at 97.3 million in 2013 and is expected to grow to 200 million travellers by 2020, representing an annual growth of 11 per cent.

Gloria, which Cofco set up in 1992 and in which it now owns a third, owns and manages 80 hotels, mostly in China. It reported revenue of 900 million yuan (HK$1.4 billion) last year. Chu said the venture will target individual tourists, as independent travel is increasingly the preferred choice, especially among young Chinese.