Minor International's Rajakarier said the Kani Lanka hotel in Kalutara, 80 percent owned by Minor and the balance by Serendib Leisure, is to reopen in August 2012 under the Avani brand.
The 105-room property is being refurbished at a cost two million US dollars.
Thailand's Minor International, which operates hotels under the Avani and Anantara brands, was the first international hotel chain to enter the island after the end of its war.
The island has witnessed a tourism boom after the 30-year ethnic war ended in 2009, with arrivals up to Thursday hitting 750,000, the original annual target for 2011, up more than 20 percent from last year.
The tourism authorities have now raised the annual target for this year to 800,000 visitors. Abbas Esufally, group director of Hemas Holdings, said they had found land for a hotel in southern Tangalle and were looking for land for two hotels on the east coast.
The two firms are also to build a 160-room beach hotel on 10 acres next to an existin