Built in Galle in Sri Lanka's south in 1996 the hotel says it conforms to standards conforming to Small Luxury Hotels of the World, an industry association.
"In order to maintain that high standard, your Board has decided to up-grade the existing hotel rooms together with the main public areas in order to further enhance the overall quality of the Hotel," chairman Hiran Cooray told shareholders.
"It is our expectation that these developments will attract high-yield overseas niche markets."
The firm will also build 12 rooms of premium category with plunge pools.
The expansion is expected to cost 300 million rupees.
Lighthouse will use its own funds and bridge the balance from bank borrowings.
By end March 2010 the hotel had 105 million rupees in Treasury bills and bank deposits.
Cooray said the hotel had also signed a lease with ERA Beach Hotel in Thalpe for five years from December 2010.
The hotel's revenues rose 39 percent to 421 million rupees in the year to March