London's Gatwick Airport has announced it will contract Shiva Hotels Limited to build a new three-star 192-bedroom 'Hampton by Hilton' hotel at its North Terminal.

Subject to planning permission, the redevelopment work is expected to start in early 2011 and open its doors to passengers in time for the 2012 London Olympic and Paralympic Games.

The new owners of Gatwick Global Infrastructure Partners (GIP) are also looking at new uses for a portfolio of properties it inherited from BAA, including turning its Longbridge House office space, which is says is under used into a new three-star hotel by 2012.

Emma Rees, head of roperty at Gatwick Airport said: "This new hotel development will be fantastic news for passengers who will have the choice to stay in one of the existing four-star hotels in the North and South Terminals or stay in this more affordable three-star hotel when it opens in 2012.

"It is also a great example of the innovative, more passenger-focused approach the new leadership team is taking to managing the airport assets, as is the speed at which this deal was agreed."

Gatwick Airport is currently investing some €1.2 billion to modernise the airport facilities and improve the passenger experience through its Capital Investment Programme.

By Oliver Clark