Emma Hoyle, who had overseen the Bodalla Arms since its establishment in 1877, departed in 1889. During her tenure, an Annex to the accommodation house comprising four or five rooms, a bathroom, and a toilet was constructed, likely between 1886 and 1889.

Over the next 15 years, there were several managers, with Michael Lorigan taking charge from May 1899.

Pat and Mrs. Leonard assumed management of the hotel from the end of September 1905 until March 1927. In 1908, it was realized that the existing hotel rooms did not comply with the requirements of the new Liquor Act, leading to the decision to rebuild. Architect Cyril Blacket designed the new structure, accepted by the company directors. Constructed by John Noble of Sydney, it was completed in November 1910 at a cost of approximately £3000, with furnishings of the highest quality chosen by Mrs. Leonard.

Company chairman Leslie Hearing anticipated the new hotel's success, especially among the motoring public. The new section featured 27 rooms, including separate bathrooms and indoor lavatories with running water, and the appointments were considered on par with those in Sydney's leading hotels. The guest rooms were spacious and well-ventilated, and the halls were wide. The grand opening took place on Wednesday, 14 December 1910, attracting everyone on the estate and a few visitors.

Under the management of Pat Leonard and his wife, the hotel became the preferred choice for the well-to-do south of Kiama. It quickly booked out months in advance, particularly among tourists and motor parties from Sydney. The Knox family, associated with CSR, close friends of the Morts, were regular guests, complete with chauffeurs, enjoying fishing at Narooma and the Tuross River. The 'Moruya Examiner' noted in January 1917 that the hotel's accommodation was stretched to its limits during the holidays to accommodate tourists.