Growing demand in Tekapo's about to be answered with the announcement of a new 100-room hotel.

Building's underway on the up-market hotel developed by Tekapo Sky, with hopes it will be open for business by the middle of next year.

It's just the beginning for the rural town with work about to start on a five star resort on the lake front as well.

Architectural Designer Ken Taylor says they want to make Tekapo the main focus.

"Developers' aim is to try and get Tekapo to become a destination because of all the activities that are there rather than just a place where people stop off like they do at the moment."