Wensley Developments The Marina Ltd has been granted resource consent to let 28 existing three-bedroom units as one- and two-bed units.
Commissioner Trevor Shiels granted the resource consent subject to 19 conditions.
The company had been letting single bedrooms last year, but Lakes Environmental fined it $750 for breaching its resource consent.
The application was heard before commissioner Trevor Shiels in Queenstown last month.
In his decision, he said there would be no adverse effects in allowing the application.
Increased use of the facilities would arise from a greater flexibility in letting arrangements.
However, peak usage would stay the same, he said.
"What is now proposed could lead to 56 separate lettings instead of 28 lettings.
"However, I accept that there is no necessary correlation between the number of letting contracts and the noise, number of people, or number of vehicles," he said.
Lawyer Russell Ibbotson, representing Mr Wensley at the hearing, said his client had interpreted his current resource consent as allowing "two-key letting" of the units.
Lakes Environmental disagreed, so Mr Wensley was seeking a new resource consent to settle the issue.
The resource consent application did not seek any physical changes to the existing development.
The proposal would enable separate letting of the two-bedroom area with the kitchen, and the one-bedroom without a kitchen.
Mr Wensley wanted to increase flexibility in the letting arrangements to increase occupancy and commercial viability.
The proposal would not increase the development's peak occupancy so the noise and traffic effects would be the same, he said.
