Dunedin's ''booming'' tourism demand has driven an inner-city hotel to nearly double its capacity, with 30 four-star hotel rooms to open next year.
The rooms will expand the capacity of Victoria Hotel, in St Andrew St, from 42 to 72.
The new rooms will be in a purpose-built, three-storey building beside the existing hotel.
A central canopy will connect the new building to the old.
Hotel owner and manager Leo Pan said yesterday the new building would open by the end of October.
Rooms would include studios, two-bedroom apartments and an executive suite, with spa, large lounge and high-quality finish.
The hotel would also house a gymnasium, he said.
When Mr Pan and his father bought the hotel in 2010, it needed significant renovation, he said.
The credit crunch of 2008 had had severely affected tourist numbers.
But five years later, the hotel had been extensively upgraded and Dunedin's ''booming'' tourism industry meant it was the right time to invest, Mr Pan said.
In time, all its original 42 rooms would be upgraded to four-star standard.
The expansion would create new jobs, Mr Pan said, but it was too early to say how many.
Hotel duty manager Ben Cochrane said the expansion reflected demand across Dunedin's hotels.
''We've noticed a massive increase in hotel occupancy.
''Figures have spiked over the last couple of years.
''We figured it was time to take the next step and expand,'' Mr Cochrane said.
The increased demand included a rise in numbers of tour groups and individuals.
''A lot of people are coming to see the wildlife. And Dunedin as a town is being promoted quite interestingly, as well.''
Dunedin had things to offer visitors that no other destination in the country could compete with, including ecotourism attractions and the Taieri Gorge train, he said.
''Dunedin as a brand has really emerged over the last couple of years.
''It's being promoted as a hidden gem, and people are really starting to discover the city.''
Dunedin Mayor Dave Cull said the new hotel rooms were evidence the city was ''experiencing heightened demand''.
Dunedin's hotel occupancy rates were bettered only by Auckland and Wellington in New Zealand, and those rates were driving investment by hoteliers.
It was the city's range of attractions, from wildlife to architecture, that was drawing visitors, he said.
''I think we've got a tremendous amount to offer here, right across the board.''
