While guests had been staying at the 26-room boutique since last month, it was officially opened by Dunedin Mayor Peter Chin at a special ribbon-cutting ceremony.
Mr Chin praised the tenacity of Stephen and Janet Chittock and partner Calder Stewart in pursuing their project to completion.
"We all have dreams, but very few of us can bring those to reality," he said.
Mr Chittock, a Dunedin-based developer, said he announced the plan to build the $14 million project at his 50th birthday party three years ago, and was "pleased we succeeded in what we set out to do".
The brief to Baker Garden Architect was for the hotel to resemble a cruise ship, because of its proximity to St Clair beach.
"I feel they have done that", Mr Chittock said.
The Esplanade had undergone a major transformation by the Dunedin City Council in recent years and a vibrant cafe and bar scene had been established in the area, with the addition of the hotel adding 44 jobs to the local economy, he said.
Room rates ranged from $250-$495, with the hotel offering discounted rates as an opening offer.
The boutique hotel was not aligned with any hotel chains, but occupancy rates had been steady, with a good mix of local, national and international guests checking in, he said.
"Feedback has been very good."
The hotel also has a restaurant, Pier 24, and it was hoped a second-stage development would add another 50 rooms and a spa area.
Mr Chittock said he was selling several properties in Bedford St, including the Majestic Mansions, to help fund the development.
