The 77-room hotel in Duke St is Dunedin’s only garden hotel and offers a range of rooms, as well as event spaces.
It had been part of Skyline Enterprises Ltd’s portfolio for "35 to 40 years", Skyline chief executive Geoff McDonald said.
"It has a lot of heritage with the company ... We got an unsolicited offer a couple of weeks ago for it.
"It wasn’t actively on the market, but the board thought it was too good of opportunity to turn up," he said.
There had been a bit of interest in it over the years, he said.
The sale would allow Skyline to focus on its core business with the gondola and luge parks in Queenstown and Rotorua, he said.
The Distinction Hotel Group has multiple hotel complexes across New Zealand, including the Distinction Dunedin Hotel in Liverpool St in Dunedin.
Mr McDonald estimated Heritage Dunedin Leisure Lodge accounted for almost 10% of the company’s overall revenue.
"It has always been a very solid little performer, perhaps increasingly with the importance of the university student populations and parents coming to stay, so it has always had very good patronage.
"It also did very well with Forsyth Barr [Stadium] being an easy walk, plus a range of different corporate travellers," he said.
The hotel’s business had recovered well following the Covid-19 lockdown, Mr McDonald said.
"Dunedin has done OK because it is perhaps less exposed to the tourism sector ... and it was helped by the really strong university sector nearby."
Mr McDonald would not comment on the price of the sale, due to a confidentiality agreement.
