Work on the Princes St premises will take place in the second half of this year and the company aims to keep the hotel open as it happens.
The upgrade, which will take about a year to complete, is taking place with joint venture partner, Lindsay Clarke.
"It’s going to be all the hotel rooms and all the public areas," Scenic Hotel Group property development manager Richard Hayman said.
He said the improvement would stick to the areas, such as the restaurants, bars and foyers, that "all our guests enjoy".
"It’s not the back of house ... we’re seeing our kitchens and all our infrastructure as working seamlessly and really good."
The upgrade was due after about 17 years with no refurbishments.
"Really, in the hotel industry by those sort of timeframes . . . even though it’s still going very well it’s starting to feel a bit dated."
Some of the key upgrades included becoming a fully air-conditioned hotel as well as new bathrooms and improved internet services.
Guests had also given feedback that helped direct where upgrades were needed, Mr Hayman said.
"Our guests’ feedback was ‘we would like some air conditioning, we would like a refreshed hotel’ . . . and some of our IT connectivity-type programmes within the hotel have probably slipped a bit behind the current times.
"We want those guests to be happy."
He would not say exactly how much was being spent on the upgrade due to commercial sensitivities but indicated it was a multimillion-dollar spend.
The company also owns Scenic Hotel Southern Cross, a heritage-style hotel next to the Dunedin Casino.
