The Radisson SAS hotel group is to open a new €18 million hotel in Donegal's largest town, Letterkenny.
Work on the 120-bedroom, four-star facility has just begun and is expected to be completed by March next year.
The hotel will be located on a new loop road being built less than half a mile from the town centre. It will bring the number of grade A bedrooms in the town to over 400, enabling it to compete more vigorously for major conferences and events.
Two years ago the Holiday Inn group opened a €12 million hotel in the town while the Quality Hotel chain has developed a town-centre location.
The new hotel is being developed by the Byrne family, who have been in the oil distribution business in Donegal for over 20 years, but Radisson SAS will operate and manage it on their behalf.
Local tourist operators are keen to promote Letterkenny as the gateway to Donegal, and point out that it is within a short drive of attractions such as Glenveagh National Park and the Atlantic Drive in Downings.
Traditionally, Donegal has not been as dependent as many other counties on the American market. The hotels in Letterkenny, which have a sizeable coach tour market as well as a large number of Northern Ireland visitors, are all reporting brisk business.
Business leaders have also welcomed the plan for the new hotel. They point out that Radisson SAS is just the latest in a list of well-known companies to commence business in the town.
Indirectly, it will also help the IDA in its efforts to promote Letterkenny as a location for inward investment.
Radisson SAS's decision to open the hotel in Letterkenny is part of the group's overall strategy for the State.
It already has hotels in Dublin and Galway, while a number of others are also being planned, including one in Limerick.