Room pricing is still being decided, but Pentagon Group managing director Vijan Patel said the Olde Tudor's restaurant, pub and accommodation would all be upgraded.

"The restaurant will have more local food and the pub will be upgraded with more offerings," Mr Patel said.

"We want to make Olde Tudor the iconic pub in Prospect."

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The hotel group has budgeted between $6 million and $7 million to upgrade Olde Tudor, Bayside Inn and The Foreshore over the next two years, with the eventual aim of bringing them up to four-star properties.

"They will have a nice, stay-at-home feeling. All the three properties are boutique ... we want to uplift all the properties," Mr Patel said.

However, Pentagon is also thinking bigger, with Mr Patel planning to build to city's first five-star property.

"Hobart has got five stars, Launnie doesn't. Launnie is just missing that Sofitel market that we require in the city centre," he said.

"I am working with S. Group to acquire land so we can build it, but that's within the next two to three years."

Pentagon director Pratik Sarsavadia said works would start with cosmetic improvements, like painting and grouting, and upgrading fittings accessories, such as televisions, multimedia systems and toasters.

"[We are] planning for hard refurbishment, where you have to do the bathrooms and the whole apartment," Mr Sarsavadia said.

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