UPDATE 1-Carlson's Regent to quit Shanghai luxury hotel

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By George Chen and Samuel Shen

SHANGHAI, July 1 (Reuters) - Regent, a luxury hotel operator owned by Carlson Hotels group, said on Tuesday it will pull out of its only hotel in Shanghai after ending a three-year partnership with a local property owner.

The exit follows a dispute over a profit-sharing scheme with its partner, sources familiar with the matter said.

The hotel is continuing to operate under the name "Longement".

Regent did not indicate a reason for the pull-out and Changfeng could not be reached for comment.

Carlson Hotels Worldwide said it had terminated its hotel management agreement for The Regent Shanghai with effect from Tuesday.

"Our commitment to the expansion of the luxury Regent brand across key gateway cities in China and the rest of Asia-Pacific continues to be a strong focus and we are exploring new opportunities and strategic partnerships to this end," Martin Rinck, president of Carlson Hotels Worldwide - Asia Pacific, said in a statement in response to a Reuters inquiry.

China has become the world's fastest-growing hotel market for several global brands, including InterContinental (IHG.L) and Ritz-Carlton, the luxury hotel arm of Marriott (MAR.N).

The Regent Shanghai opened in 2005 when Changfeng hired Carlson to manage the facility, the first Regent-branded hotel in China.

Kjell Rognoy, general manager of The Regent Shanghai, announced to staff on Tuesday that Carlson and the local owner had failed to reach an agreement to continue their partnership, two senior employees and an industry source briefed on the matter told Reuters, on condition of anonymity.

As a result, the local owner of the hotel has lost the right to use the Regent brand and the two parties have begun work on legal and accounting details to terminate Carlson's involvement in the hotel, the sources said.

The Regent Shanghai, located in a central district of China's financial hub, has more than 500 rooms and is one of the biggest five-star hotels by capacity in Shanghai, which will host the World Expo in 2010.

Regent also operates a hotel in Beijing, which will be its only hotel in China after checking out of the Shanghai facility.

Besides its Regent brand, Minneapolis-based Carlson, the biggest privately held U.S. hotel management group, also operates hotel and restaurant chains in China including Radisson and T.G.I. Friday's. (Editing by Edmund Klamann)