After years of roadworks and a big budget overrun — a new bypass in Queenstown is finally open.

But some local business owners say they have paid a high cost during the near $130m project that has resulted in just one kilometre of road.

The Queenstown Lakes District Council held a blessing event on Thursday morning before the cones started to be taken away on stage one of the Queenstown Arterial Road.

Mayor Glyn Lewers told 1News: "It's a pretty significant day... this is probably the most intricate and most complex project this council's ever delivered."

Motelier Kelly Bray, with two businesses along Autoline Motel and Alexis Motel on the stretch of road that was upgraded, said: "It's called the road to nowhere and it is the road to nowhere. We haven't achieved anything."

The project was a joint venture between the local council and NZTA/Waka Kotahi along with other contractors including Beca and Fulton Hogan.

The previous Labour government gave $50m towards the project under the "Shovel Ready" programme during Covid-19.

Stage one connected two existing streets, Melbourne and Henry streets, and joined State Highway 6A into the Queenstown CBD -- helping ease congestion and improve public transport.

But it was around 18 months behind schedule and took nearly four years to complete — local ratepayers and residents footed with the $40m budget blowout.

"I think it's an embarrassment," Bray said.

The project was plagued with problems — weather, but mainly the stormwater upgrade.

"The classic one was at the top of the hill," said Lewers.

"We [the council] designed it, [it was] ready to go. Start digging. The existing services weren't in the position that were originally mapped way back in the day. So, dug a hole, opened it up. Not there [the pipes]. Had to redesign it."

Around 20km of stormwater work needed to be completed.

All of that drove up the cost.

The total bill with the government contribution reached $128m.

"It took around about four years, went over budget, but that's just the nature of the Covid response given that we ramped up really quick," said the mayor.

"We designed it as we went so look it probably didn't meet our budget expectations but we got there in the end."

But for Kelly Bray who believed the construction would last 12 to 18 months and not four years told 1News, the overnight construction was bad.

"We've had really bad road noise at nights... guests have checked in and spent one night and moved on. Our TripAdvisor reviews have gone through the floor."

He was not the only business operator to feel the pain of the project.

Another operator, who did not want to be named, told 1News: "It's been an absolute nightmare."

The operator said the worst was the overnight roadworks and their impact on guests.

"We've had to refund them [customers], we've had to compensate them, with wines, chocolates, refunds, you name it and it's just been an absolute nightmare of a journey."

He added, "the rates have gone up by 15 to 20% and the council is hammering all the locals really, really hard to try and recoup those costs".

Some businesses now wanted compensation for lost income.

But the mayor said that has already been dealt with.

"We've already considered that and I'm not going to open up to re-litigation," Lewers

Stages two and three of the project, which would work together to help ease further congestion around the CBD, was also up in the air.

"There's no actual funding for construction in the forward-planning but there is a funding set aside to do all the design work."