Hallmark Hotels has bought the Elizabeth Hotel in Hull out of administration, growing its portfolio to five.
The 95-bedroom hotel, situated seven miles from the city centre, was placed into administration last week along with 13 other hotels and 13 pubs owned by Elizabeth Hotels, Cavendish Hotels and Elizabeth Estates.
Hallmark Hotels, which owns and operates hotels in Bournemouth, Manchester, Derby and Carlisle, plans to spend £3m on refurbishing the Hull property's bedrooms and on creating a new 200 person function suite. It is also aiming to reposition the hotel as a four star.
Managing director, Arnold Schnegg said: "We will be beginning a comprehensive refurbishment of the hotel immediately. We expect work to be completed by July 2010."
Hallmark said it would be keeping all staff currently employed at the hotel in their roles and hoped to recruit more staff when the hotel relaunches next year.
Hallmark was set up in 2008 with the aim of creating a chain of regional four star hotels and plans to make more acquisitions in 2010.