The 'work in progress' signs are back up at the Dunvegan Hotel on the Isle of Skye with the second phase of a major renovation project now underway. Hotel owners, Malcolm and Peggy Morrison are gradually upgrading the hotel and hope to eventually achieve four star status and make the hotel one of the village focal points.

Mr and Mrs Morrison bought the Dunvegan Hotel in June 2000 and immediately carried out significant improvements to the bedrooms and the kitchen. Phase two of the project is now concentrating on the refurbishment of the dining room and the upgrading of the games and function room.

The Morrisons have run several successful businesses over the years and their plans for the Dunvegan Hotel will bring it into the higher end of the tourism market. In addition to accommodation, the hotel will also provide visitor activities such as regular live entertainment.

Mrs Morrison, who worked in the hotel as a teenager says the purchase and upgrading of the hotel is a dream come true: "I have always wanted to run a hotel and we are delighted to have bought the Dunvegan which has been a popular place for visitors and locals over the years. We plan to fully upgrade the hotel attracting increasing numbers of visitors to the north of Skye benefiting other businesses in the area."

The development will create seven full-time, year-round jobs in Dunvegan, an area of Skye which has limited employment opportunities, and this could increase if future developments are brought forward. Among the couple's proposals for further developments include the upgrading of the hotel jetty and landscaping, and in the longer term, the creation of additional guest accommodation and leisure facilities.

Part of the new-look Dunvegan Hotel will be regular live entertainment. Mr and Mrs Morrison's son Peter, who is the hotel bar manager, is lead musician with successful contemporary folk band the 'Peat Bog Faeries'. Through his musical contacts, they are planning to develop a regular events diary to entertain guests and locals.

Skye and Lochalsh Enterprise (SALE), part of the Highlands and Islands Enterprise network, are supporting the £96,700 (pounds) project with a grant worth £33,800 (pounds) towards the cost of phase two. Development manager at SALE, Graham Campbell said: "Tourism is Skye and Lochalsh's largest sector and is the main economic driver within the overall economy so it is important to invest in visitor attractions and accommodation.

"The Dunvegan Hotel will not only create valuable jobs in the north of Skye but it will enhance the visitor experience to the area with quality accommodation and live entertainment."