The Celtic Collection has acquired the former Hampton by Hilton at Magor in south Wales, which it plans to convert to its new Tŷ brand.
The mid-range brand, which takes its name from the Welsh word for house, aims to meet the needs of guests staying one or two nights while attending meetings, conferences, family celebrations and other events.
The addition of the 129-bedroom hotel takes the Celtic Collection's portfolio to four hotels, an inn and 10 lodges, based around the Celtic Manor Resort in Newport, just five minutes from its latest acquisition.
Chief executive Ian Edwards said: "We are delighted to be expanding the Celtic Collection with the creation of this Tŷ Hotel at the former Hampton by Hilton at Magor.
"It is exciting to be launching this new brand, which will be a fantastic addition to our portfolio of properties. Tŷ will offer something different to what we provide at the Celtic Manor Resort and our existing hotels.
"We know the demand for this type of comfortable and essential accommodation is strong and that demand will only increase when we open the International Convention Centre Wales later in the summer."
The Celtic Collection takes over the hotel from 1 July, with staff remaining in place under hotel manager Roger Goldsworthy.