The site on which Ilala stands was originally occupied by Mrs Green who owned and ran the original Sprayview Restaurant.
In 1970 it was demolished by Gardini and Sons who drew up plans for a restaurant and casino. During 1984 the site was offered to the Brown family for Ilala Lodge Hotel. Their offer coincided with the Minister of Finance offer of a tax incentive for hotel construction. Richard Beattie of Hope Clark and Associates were commissioned to produce plans for a small hotel. The hotel had to have at least 12 rooms. Eventually 16 rooms were agreed to.
Thelma Newmarch recommended the name Ilala Lodge Hotel and played a major role in the overall look and feel of the hotel. At that time tourism was in the doldrums, the Elephant Hills had been burnt down other hotels were very run down. Strath and his son Keith were responsible for erecting the roof and Beryl Brown and Angela Campbell did all the landscaping and supervision of the gardens.
The highlight of the opening ceremony was the local Chief and the Spiritual elders who accompanied him and blessed the Lodge in their traditional way.
Ten years later when Laura Brown was General Manager of Ilala Lodge Hotel she added 16 more rooms to the Lodge and an additional 2 rooms downstairs bringing it to the 34 rooms today.