InterContinental Hotels Group has signed a 20 year deal for a new 254-room six storey property in the centre of London, hoping to exploit the surge in visitor numbers for the 2012 Olympic Games.

The InterContinental London Westminster is set to open in late 2011 following the signing of a management contract with Splendid Hotel Group and the hotel will occupy the former Queen Anne’s Chambers, originally built in the nineteenth century.

The 120,000 square foot freehold site close to New Scotland Yard is currently office and retail space. The hotel will be the second InterContinental hotel in the capital.

InterContinental London Park Lane was first opened in 1975, and reopened following extensive renovations in 2006 in celebration of the brand’s sixtieth anniversary.

Kirk Kinsell, IHG’s president for Europe, Middle East and Africa, said: “Despite the tough economic times the fact that we continue to sign major deals is testament to the strength of our brands. We’re adding 5,000 rooms in the UK in the next two to three years. The InterContinental London Westminster will open in time for the Olympic Games in London in 2012.”

Splendid Hotel Group is an existing IHG franchisee with Holiday Inn hotels in Manchester and London. The new signing is its biggest acquisition to date.

Shiraz Boghani, managing partner of Splendid Hotel Group, said: “This is by far the largest project we’ve taken on. We specialise in providing the best hotel accommodation in major cities and the new InterContinental London Westminster will be a great addition to our portfolio. The strength of the InterContinental brand and the site’s location, close to some of the city’s most famous attractions, makes it the perfect deal for us.”

The new luxury InterContinental in Westminster will follow several other top-of-the-range hotels due to open in the capital before the Olympics.

They include the re-opening of a hotel at the Gothic masterpiece at St Pancras with more than 250 rooms, set to open next year. Others upcoming include substantial hotels on The Strand at Marconi House, on Northumberland Avenue and a Shangri-la at London Bridge.