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Starwood Hotels & Resorts Worldwide Inc. (HOT) expects to include four-star hotels in its portfolio of mainly five-star properties in Taiwan and expand into second-tier cities on the island in the coming years to meet demand from Chinese tourists, the head of the company's Taiwan operation said Wednesday.

"We're looking for (local) entrepreneurs and they're looking for us," said Josef Dolp, the Taiwan managing director of Starwood Asia Pacific Hotels & Resorts, referring to the company's expansion plans.

Starwood Hotels & Resorts, which operates hotels under the W Hotels, Westin, Le Meridien, St. Regis and Sheraton brands, will increase the number of rooms under management in Taiwan to 2,000 at nine hotels by 2011, said Dolp.

It now has three hotels and 1,102 rooms under management in Taiwan - Sheraton, Westin and Four Points by Sheraton.

"An undersupply of rooms is the main reason for the expansion," said Dolp.

Almost all of the nine hotels will be five-star hotels, but an influx of Chinese tourists will spur demand for four-star hotels as well, he said.

"The Starwood hotels are well known in China, where brand loyalty is strong, and Taiwanese entrepreneurs could capitalize on that, (using those brands to attract) Chinese tourists," said Dolp.

After Taiwan and China expanded direct cross-strait charter flights to weekdays from weekends in late 2008, the number of Chinese visiting the island had risen to 4,000 a day by March from 500 a day in December, said Zhang Yun, Taiwan manager of Chinese flag carrier Air China Ltd.

Taiwan expects the number of tourists from China to rise to 800,000-900,000 this year from 35,114 in 2008, Primasia Securities said in a note Wednesday.

-By Alex Pevzner, Dow Jones Newswires; 8862-2502-2557; alex.pevzner@dowjones.com