But to Phillip Younis, Port Campbell Surf Life Saving Club's $1.6 million redevelopment of Tregae House is "a natural progression".

The club bought what was then a three-room coastal shack 30 years ago for $22,000. Initially it was a 'bunk house', a place for members to stay the night after social functions at the club's rooms on the town's foreshore.

But soon people off the street were staying the night and the idea of opening a backpacker hostel was born.

"People said we should be charging for this, so we did," Mr Younis, a club life member said. By the mid 1990s, the hostel began to fall into disrepair. No amount of working bees could lift the facility to the standards expected by a new generation of backpackers.

Mr Younis said the club had three options: do nothing, sell the property or redevelop the facility.

Selling was out of the question and in 1999 the club began planning its biggest business venture.

Tom Walsh, who helped develop the original business plan, said many members were sentimental about Tregae House.

"The public were great and gave us plenty of support. The National Bank backed us and then we could begin the development."

The club will open the new 82-bed hostel on Sunday. The upgraded facility comprises 18-rooms and modern kitchen, dining and living areas.

Todd Brunt and Lisa Togni will manage the facility.