Hilton Group is poised to launch a chain of hotels in the UK to grab a slice of the booming mid-priced market.
Howard Friedman, president of Hilton in the UK and Ireland, said the company was considering re-investing some of the £382m it made from property sales to reintroduce the Scandic hotel brand to Britain within five years.
The three-star hotels would compete head-on with Holiday Inn's Express brand, which has more than 100 hotels in the UK, and with Scottish hotelier Ken McCulloch's Dakota chain.
Friedman said a minimum of 50 Scandic hotels would be required to make the investment worthwhile. Building such a chain from scratch would cost between £5bn and £8bn, but Hilton is likely to reduce its costs by teaming up with a property firm.
Friedman said the Scandic hotels could charge around £70 per room, per night and would offer a more basic level of comfort and fewer restaurant facilities than traditional Hilton hotels.
He said: "Scandic by Hilton is a brand with lots of potential. We are looking at whether it makes sense in any of these markets. There is no point opening five if we can achieve 50 hotels. That is what we will be aiming for."
Friedman said the hotels could be sited in cities such as London, Edinburgh and Glasgow. By charging around 20% less than traditional Hilton hotels, they would allow the company to attract new customers without devaluing the main brand.
London-based Hilton Group, which has the rights to the Hilton name outside the US, is in merger talks with Hilton Hotels Corporation of the US, in which the heiress and socialite Paris Hilton has a stake.
Hilton Group last month sold £382m worth of hotels, including three in Scotland, to the Israeli investor Egal Ahouvi. The company plans to sell further hotels, including one at Edinburgh Airport, but the sites will retain the Hilton brand and will still be managed by the company.
Friedman said selling properties and investing the proceeds in further hotels would allow Hilton to use its cash more effectively.
Hilton, owner of Edinburgh's Caledonian Hotel, runs 142 Scandic hotels globally. It bought the Swedish-owned chain for £612m in 2001, expanding its portfolio by two-thirds. Edinburgh's former Scandic Crown Hotel was sold before the chain was bought by Hilton.
Hilton converted most of the Scandic hotels outside Scandinavia to its own brand in 2001, but recently started using Scandic in new markets.
The company has just announced plans to open five Scandic hotels in Brazil over the next three years. Friedman said he wanted to attract more leisure customers in the UK, and to reduce the proportion of business customers from 70% to 60%.
This will be achieved partly by expanding Hilton's network of resorts, such as the Coylumbridge holiday complex near Aviemore. Five resorts could be built or acquired in Scotland over the next few years, and 15 more across the rest of the UK, according to Friedman.
"It is a growth area. We are becoming better known as a resort company," he said.
Friedman, who is originally from South Africa and worked for Hilton in Miami, added that recent marketing efforts by VisitScotland had made Scotland a worthwhile place to invest. "Before, Scotland was known for Loch Ness and the Highlands, but Edinburgh, Glasgow, the arts and the theatre are becoming better known."