Dorset-based pub operator Eldridge Pope is continuing with plans to expand the accommodation side of its business with the acquisition of a new hotel site.
The Ship Hotel in Chichester, West Sussex, is the company's second biggest acquisition ever and forms part of its overall plan to raise its profile within the accommodation sector.
The 36-bedroomed hotel boasts two substantial function rooms and an à la carte restaurant.
The purchase follows a growing trend by small pub groups and regional brewers to invest in accommodation. Many are cashing in following several surveys into tourism which suggest people are put off by over-priced, poor quality hotel rooms, particularly in London.
Surveys suggest there is a gap in the market for pubs offering good value accommodation.
The Ship Hotel will complement Eldridge Pope's two other major properties in Chichester, the Vestry, which also has 11 superior bedrooms, and the Toad bar. In the coming months Eldridge Pope will be looking to invest in the Ship.
Operations manager Karen Hunt said: "We are extremely excited about this very important acquisition."
Kent brewer Shepherd Neame has recently introduced its own accommodation pub brand, Mulberry Inns.