Argyll and the Islands Enterprise (AIE) is investing over half a million pounds towards helping to improve tourist accommodation in north Argyll.

The development agency has awarded Ecosse Leisure, owners of the Dunstaffnage Arms Hotel, a building and development grant worth £218,000.  Meanwhile, the Oban Caledonian Hotel is to undergo a £1.6 million revamp with £467,000 worth of assistance from AIE.

Part of the package of assistance to both businesses from AIE includes money from the HIE Standards programme - a European-funded initiative which provides financial assistance to accommodation providers for investment in the upgrade of their premises in a bid to attract and meet the needs of today's discerning travellers.

At the Dunstaffnage Arms, the £724,000 project will see the total refurbishment of the property.  Ecosse Leisure's ambitious plans for the Hotel - which is located at the Connel Bridge junction on the A85 road - will result in the premises being upgraded from a 2-star to a 4-star standard hotel and their new bunkhouse is likely to achieve a 3-star rating from Visitscotland.

Commenting on the project, general manager Sally Davies said: "Work starts on the redevelopment of the hotel today (Monday 6th January) and among the transformations taking place at the hotel will be the re-branding of the business, with the hotel being know as the Oyster Inn.  We are also looking forward to the opening of our new seafood and char grill restaurant."

The upgrade of the Oyster Inn will create at least 14 new jobs for the area with the intention that these jobs will be year-round to ensure a high quality of service at the hotel.

In Oban, improvements at the Caledonian Hotel aim to raise the current 1-star rating to a 4-star rating.  The investment by The Freedom of the Glen Family of Hotels (FGFH), who bought the Oban Caledonian Hotel in May of this year, will result in 11 new posts to add to the 39 full-time equivalent staff already there.

The upgrade of the property will involve improvements to bedrooms, meeting facilities, the restaurant and a new brasserie as well as improvements to the building infrastructure.

FGFH operates three 4-star hotels in the Glencoe area and specialises in the quality UK, European and North American markets.  The business has an excellent reputation with achievements such as being the first tourism business in Scotland to be awarded Investors in People and having won two Thistle Awards for Training and Customer Service.  It is anticipated that FGFH's presence in Oban could bring an additional £600,000 in visitor spend to the town.

John Jennett, managing director of FGFH said: "Oban was a natural expansion to our existing activities and many of our existing customers are looking forward to making new trips to Oban. The Oban Caledonian will add further breadth to the excellent facilities already available in the town for tourism and the local market."

AIE chief executive, Ken Abernethy said: "Enhancing the tourism product for visitors to Argyll is a priority for AIE and with money available from the EU via the HIE Standards programme we can help fund significant projects, helping us to achieve our aims.

"The newly-named Oyster Inn and the Oban Caledonian Hotel should both gain four star ratings as a result of their ambitious investments giving visitors to the area a much wider choice of accommodation from budget to very high quality."