A BUDGET hotel to be built in Newport is due to open in February 2008.

The 103-bed hotel on Malpas Road got the go-ahead in October last year.

Now demolition work on the 8,500 sq ft building formerly on the site is finished and construction will begin soon.

The three-quarter acre site will house a budget ETAP hotel with 103 bedrooms and 107 parking spaces, owned by Pedersen Hotels.

ETAP is part of the Accor Group hotels group, which also runs Novotel, Mercuri and Ibis brands.

Robert Hodge, director of Pedersen Hotels said: "There is a shortage of good value hotel facilities in the Newport area and along this part of the M4 corridor.

"This is an ideal location, close to the Brynglas tunnels and with fast access to Newport city centre and Cwmbran."

The Malpas Road site was formerly occupied by Euro Commercials haulage repairs business, who sold the site to Pedersen in a deal negotiated by Cooke & Arkwright.

The Mercedes Benz truck and van dealers relocated to new, larger premises on Corporation Road six weeks ago, where they are currently undertaking a £300,000 to £400,000 refurbishment and have plans for major expansion in coming years.

Ken Baker, a manager at Euro Commercials said: "This site has the potential for growth.

We are looking to have eight to ten bays eventually, compared to four at the Malpas Road site."

Mr Baker said several new jobs were likely to be created over the next five years, including keeping on a number of trained apprentices and taking on sales and admin staff, as the expansion took place.

He believes redevelopment works across the city will lead to a boom in local trade for them.

He said: "I think there's a big future for us here in Newport."