Auckland Airport has signed a deal with Accor to construct and operate a new $20 million hotel at the airport in time for the Rugby World Cup 2011.

The airport said that the new 120-room Formule 1 Hotel would appeal to the budget traveler market and offer more choice to travelers.

The new hotel would be designed by architectural firm Jasmax and is likely to be build close to the airport's retail centre.

The airport is not sure when construction would start, but said it would be up in time for the RWC. "It will probably start in two to three months, once we have conditions in place such as our construction partners", said airport's spin doctor Richard Llewellyn.

The airport's capital expenditure was $27.8 million for the six months to December and is expected to be between $60 million and $65 million for the full 2010 financial year.

Chief Executive Simon Moutter said, "Growth is about creating value by building stronger air services connections, growing passenger volume, gaining exposure to higher growth markets and influencing travel and customer behavior".

Auckland Airport reported that passenger volumes were improving.

Net profit for the full 2010 financial year is expected to be in the $100 million to $105 million range.