The Duddy Group is investing £7million to build a new Holiday Inn Express Hotel in Londonderry, creating 47 jobs.
The project is being supported by Invest Northern Ireland and the Department for Communities.
Announcing the investment, Invest Northern Ireland’s Chief Executive Alastair Hamilton said: "This new hotel will address a gap in provision of budget hotel accommodation in Londonderry by offering a three-star quality option for visitors.
"The hotel will have 116 bedrooms, a Marco Pierre New York Italian Restaurant, two meeting rooms and three retail units and will provide accommodation for up to 40,000 visitors a year bringing significant additional revenue to the city.
"The economic benefit also includes the creation of 47 jobs as well as employment generated during the construction phase and the ongoing benefit to the local supply chain through the purchasing of consumables for use in the hotel.
"The addition of this internationally acknowledged brand will underline the city’s position as a quality destination and will contribute to achieving government’s targets to grow tourism revenues to £1 billion and visitor numbers to 4.5 million by 2020."
The new hotel will be located on the corner of Strand Road and Great James Street, not far from the Peace Bridge and close to other key tourist sites such as the Guildhall and the City Walls.
Invest NI has offered £724,000 of support and the Department for Communities has offered £475,000 from its Urban Development Grant. The project has also secured £1million of mezzanine funding from Whiterock Capital through Invest NI’s Access to Finance strategy.
Pauline Campbell, Director at Department for Communities stated: "The £475,000 investment from the Department will unlock significant private and public investment into this project. This new 116 bedroom 3 star hotel will give a much needed boost to the economy as well as regenerating a key site within Londonderry."
Commenting on the development, Brendan Duddy said: "This is an exciting development that will support the wider tourist and hospitality industry in Northern Ireland and provide a new base for visitors to explore the city and surrounding areas.
"We wanted to grow tourism in the North West and create employment and business opportunities for service providers in the region. The support from Invest NI and the Department for Communities will enable us to progress our investment plans and we are aiming to have the hotel open for business by early 2018."