Why would New Zealand's biggest privately owned hotel business spend millions redeveloping when the country's borders are shut and tourism has ground to a halt globally?

An executive of a business with about 30 hotels in New Zealand worth around $500 million is quick to answer: "The best time is to do this is now."

Ronnie Ronalde, group operations manager of the five-year-old CPG Hotels, says this is all about the future.

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"We're doing it now because we started on plans a year ago. The international market is done but in the next one to two years it will come back."

Just a couple of blocks away is the site he's discussing: a popular inner-city Auckland backpackers hostel. A 65-room five-star hotel with street-front restaurant is planned in the conversion of an existing budget hotel, aiming to re-position a well-known property near Auckland's waterfront.

The $6.9m project by CPG Hotels will see the Fat Camel Hostel on the corner of Gore St and Fort St upgraded in a contract awarded to Fairview Construction.

Prakash Pandey, a director of CP Group, said the new boutique hotel would cater to an entirely different market.

Dark paint and sharply contrasting neon are planned in the interior decor.

During the early 1990s, CP Group was originally run from that Fat Camel property at 38 Fort St, he recalled. His father, Charles Pandey, immigrated here from Singapore in 1992 to be initially based there.

How the $6.9m project could look on completion. Photo / supplied
How the $6.9m project could look on completion. Photo / supplied

"He came here to retire, but it didn't last long," Prakash Pandey said of the business where Charles's four sons now work: Prakash, Rakesh, Dinesh and Niklesh.

And in the ultimate immigrant-made-good fable, the business has gone global: "Since its incorporation in New Zealand in 1993, CP Group has experienced remarkable growth and has amassed a considerable, strategic property portfolio across New Zealand, Australia, Singapore, Malaysia, the Finlands and the United States."

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Back in Auckland, Ronalde said the Fat Camel's ground floor would be clad in glass so it would open its street frontage. Interior design by Yellow 6 would bring an elegant, luxurious suite interior, he said.

"We're creating an eatery on the ground floor and a five-star hotel above that," he said.

CPG Hotels, formed five years ago to manage hotel properties the business owns, now has a considerable presence in this country.

The 15 properties it owns are:

• Hotel Grand Windsor on Queen St, Auckland.
• Fat Camel, corner Fort St/Gore St, Auckland.
• Hotel Fitzroy in Ponsonby, bought just a few weeks ago.
• Stations Backpackers on Beach Rd.
• President Hotel Auckland on Victoria Street West.
• Greenlane Suites Auckland on Great South Rd.
• Eden Crescent, Auckland (under-refurbishment, to launch late next year.
• Anzac Ave, Auckland, being refurbished, launched in November.
• Lake Rotorua Hotel, Lake Rd, Rotorua.
• Four Canoes Hotel, Rotorua.
• Willis Wellington Hotel, Willis St.
• Picton Yacht Club Hotel.
• Wains Hotel Dunedin.
• Papanui Rd in Christchurch - a hotel to be developed.
• Another South Island property where the purchase is yet to be announced.