Owner-operators Richard and Sue Hanning said their confidence in Dunedin's tourism market had prompted the decision to expand Best Western 555, from 18 units to 26, offering a further 15 doubles or up 30 single beds per night.
While rebranding with Best Western to boost international visitor numbers, Mr Hanning said the business also worked in with Peninsula tourism operators closely to be involved with that market.
"We're operating outside the central area but this shows there is growth out this way," Mr Hanning said of Best Western 555, which is at the juncture of Bay View, Andersons Bay, Portobello and Musselburgh Rds.
He expected the development, the first stages of which were built where the Bayview Hotel once stood, would cost more than $1 million, including full fit-out costs.
Best Western 555 was already well booked by a contingent of Argentinian visitors for their southern Rugby World Cup matches, in Dunedin on September 10 and Invercargill on September 17.
