Destination Rotorua general manager Oscar Nathan said that Rotorua had undergone benchmark-beating growth in commercial accommodation statistics last year.
"As a result it's great to see that investors are confident to develop new quality accommodation here," he said.
"Luxury lodges and bed and breakfasts provide visitors the opportunity to dive deep into the heart of a region and experience true manaakitanga or unique New Zealand hospitality."
The former owners took part in the opening formalities and spoke of the wonderful memories they had in the property.
Ms Caughey previously renovated and set up a B&B in Parnell, and said she hoped to attract international guests to stay in her Auckland accommodation, and would then encourage them to visit the lakes and Redwood Forest.
Ngamihi Lodge joins a cluster of other accommodation options at the lake, including Lake Okareka Lodge, run by Lebua hotels. Ngamihi is situated at one of the highest points on the peninsula jutting into the lake, and has 360-degree views.