Napier Council-owned Kennedy Park Resort has begun construction of new facilities to further expand the site, despite the massive hit tourism has taken as a result of the Covid-19 pandemic.
Napier Mayor Kirsten Wise said the council had been planning the $1.75 million project for two years and construction had always been due to commence last month.
But the pandemic has made the start date all the more significant.
"The project is contributing to jobs and economic activity in the early stages of Napier's pandemic recovery."
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"We are a tourist city and Napier's recovery from the pandemic will be dependent on us attracting a steady stream of domestic visitors in the short to medium term.
"Kennedy Park Resort is positioning itself for strong future growth of domestic tourism."
Kennedy Park Resort manager David Aflallo said that the resort has been the first point of call for many sports teams, school groups and local conferences over the years.
"Our domestic market is key, and we need to be ready for the growth in that market.
"A strong local economic recovery is critical and by proceeding with our project, we are contributing to the recovery of Napier's economy.
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"We need to ensure that we maintain the high standards that we are known for."
Fergus Brown, chief executive of Holiday Parks New Zealand, said the hit on the industry from the pandemic has been big but said the council is showing confidence in Hawke's Bay tourism by investing in Kennedy Park.
The ablution block's building framework is 70 years old and cleaning and maintenance have had to increase to keep making it look attractive. It is below a reasonable standard for a 5 Star Qualmark rating.
The new building will cap or reduce energy consumption and save on maintenance costs.
The new facilities will include toilets and showers, four family rooms, a kitchen and dining area, alfresco dining and a new laundry.
Strict health and safety procedures will be followed as work commences during alert level 3.