This, as the company books to extend the Virgin brand further into the local travel and leisure sectors.

Virgin Group's global chief executive, Stephen Murphy, said the group had conducted preliminary work in Australia with a view to eventually offering a 4 1/2-star hotel proposition at four-star prices.

"In the United States, when you survey consumers, they are very tired of the existing formula offers and I also think that is true here. They are also slightly disillusioned with the boutique offers that miss the functionality that you need in a hotel," Mr Murphy told The Australian. "We think there is a great space for us to come in and under the Virgin brand deliver a boutique experience but with the basic functionality of the hotel delivered much more efficiently. And with the pricing transparency as well."

The partnership with US investors Alberto Beeck and Diego Lowenstein will see Virgin Hotels operate as a third-party manager, team with owners or acquire properties directly.

It is seeking hotel sites in New York, San Francisco, Miami, Boston and Los Angeles, and plans to later expand globally.

Virgin founder Richard Branson said: "The Virgin brand is hot as ever in Australia and well respected.

"We transport a lot of business people in Australia and will transport a lot more in the future. If we can get the right sites, we have the concept for an up-market, fun boutique hotel group that will be very 'Virginesque'.

"Australia is high up on the list for it."

Mr Murphy said Virgin had conducted market studies and looked at the type of proposition it would offer in Australia.

"We certainly would not be doing the ultra-cheap stuff. But we do think that is an interesting model for Asia and the Middle East," Mr Murphy said.

"But for Australia it will be something more like the US model which is 4 1/2-star at four-star prices. We would like to give you more value for the same price with a fun edge to it. People see it as a very logical extension of transportation. Here the principal brand shaper is Virgin Blue. We think the hospitality proposition would be naturally understood by consumers."

Virgin has also relaunched its Virgin Money venture in Australia, which since August has been offering credit card and online banking products in association with US banking giant Citibank. The joint venture is also expected to enter the mortgage market.

Mr Murphy conceded Virgin Money had a poor track record in Australia. It quit the mortgage sector in 2008 and ceased its previous credit card deal with Westpac the same year. "That is why we have now partnered with Citibank rather than with one of the incumbents," he said.

"It is a very promising restart. We need to look at scale opportunities for Virgin Money in Australia. We need to move the business forward with a transformational big idea. There are all sorts of structures we could use. We have branches in the UK, we don't think we should do that here. We should be looking for a way to scale in Australia in itself."

The group also has a 51 per cent share in Virgin Atlantic Airways, which plans to establish a joint facility at Sydney Airport with Virgin Blue and V Australia.