'It’s a huge jewel in our crown': What does the future hold for Chateau Tongariro?

Friday, 3 February 2023

The Chateau Tongariro Hotel, built in 1929, is an iconic tourism asset for the Ruapehu district.

The future of the iconic Chateau Tongariro Hotel on Mt Ruapehu is uncertain after its overseas owner decided it was no longer financially viable, but other potential operators are already stepping forward.

Kah New Zealand, owned by Malaysian conglomerate Oriental Holdings, announced on Tuesday that it plans to close the hotel on Sunday.

Kevin Peeris, a senior vice-president at Oriental Holdings’ hotels subsidiary, said a seismic assessment ahead of a planned renovation found that underground shifts over time meant some of the hotel infrastructure no longer met current safety standards.

Faced with a “significant cost” to fix the building, as well as the voluntary administration of ski field operator Ruapehu Alpine Lifts, uncertainty over the future of the ski resort which the hotel depended on, and off the back of recent poor snow season conditions and pandemic restrictions, the company decided it was not financially viable, he said.

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Ruapehu mayor Weston Kirton is determined to see the Chateau Tongariro resurrected.

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Ruapehu mayor Weston Kirton said locals were “gutted” to hear the news, with many venting their disappointment on local Facebook pages.

The Chateau was significant for tourism revenue in the district, as well as being an important icon for the area, he said.

“It’s a huge jewel in our crown,” Kirton said. “It's such an important part of our district in terms of its identity and its heritage value to us is just immense.

“We're not going to lie down and say that another business is going to fold and we're going to absorb it somewhere else, that's not the case, we're going to protect the interests of the Chateau and the history and try and get it resurrected.”

Kirton said he has already fielded calls from local and international tourism operators who were interested in taking over the hotel operations at the Chateau.

He referred the enquiries to the Department of Conservation (DOC), which administers the lease within Tongariro National Park.

He expected there would be “a significant amount of interest” in running the hotel if DOC advertised it.

DOC operations manager for Tongariro, George Taylor, said the hotel would be handed over to the department, and they would be working closely with Kah New Zealand and iwi over the coming weeks during the transition.

A DOC spokesperson said it was far too early to say what the long-term future of the building is.

Come to Ruapehu for the adventure, delicious food, rich culture and welcoming locals.

Kah New Zealand’s lease expired on April 30, 2020, and had been running month-to-month since then while it negotiated new lease terms.

In its latest accounts, for the 2021 year, the company valued the Chateau at $90 million for insurance purposes.

Peeris declined to comment on whether the company would have to write off the value of the building in its accounts.

Property owners generally forfeit any buildings on leasehold land when a lease is terminated.

Peeris declined to clarify ownership of the building, saying there were ongoing discussions between Kah New Zealand and DOC which remain confidential in order not to bias the outcomes.

The Chateau has the highest heritage protections.

The building was entered as a Category 1 historic place on the New Zealand Heritage List/Rārangi Kōrero in 1996 as a place of special and outstanding historical and cultural heritage significance and value.

It is scheduled as a heritage building in the Ruapehu District Plan, is within the Tongariro National Park Unesco World Heritage Site and has a heritage covenant.

The Chateau was successful in applying for funding from the National Heritage Preservation Incentive Fund in 2021 for a detailed seismic assessment, which was granted on the condition that a heritage covenant be placed on the building, which means the owners can’t damage, demolish, modify, alter, or add any additions to the exterior without the consent of Heritage New Zealand Pouhere Taonga.

Peeris declined to comment on how much the building would cost to fix, saying he only had approximate estimates from early reports.

“This may need to be raised with DOC, so we cannot confirm this information at this time,” he said.

Asked if the company had obligations to restore the asset under its lease with DOC, he said the Chateau has always had regular maintenance undertaken over the years.

DOC’s Taylor said the Chateau was in need of renovation, which included structural upgrades so that the site met current seismic safety standards. He said there were no current estimates of what the work could cost.

Seismic strengthening for the Chateau, built in 1929, could be expensive if Wellington’s experience is anything to go by, although the capital does have higher seismic requirements than Ruapehu.

The Parliament Buildings and Library earthquake strengthening and refurbishment cost about $175m in 1992, and was the biggest building conservation project undertaken in New Zealand at the time. Earthquake strengthening the Wellington Town Hall is estimated to cost $182m, while the Majestic Tower strengthening cost more than $80m.

Ruapehu’s Kirton noted that Kah New Zealand had added a new five-storey wing in 2005, using modular rooms trucked to site, which he thought was unlikely to require the same earthquake strengthening as the original building.

He said Ruapehu District Council was not able to contribute any funds to strengthening the building, and it would set a bad precedent to fund a private business.

He hoped central government may be able to help, but had been given early indications that there was no heritage funding available.

Asked if the Ministry for Culture & Heritage was able to contribute any funding, Emily Fabling, Pou Mataaho o Te Aka, deputy chief executive policy and sector performance said:

“Manatū Taonga Ministry for Culture and Heritage acknowledges the significance of the Chateau Tongariro to the Ruapehu community, and to New Zealanders as a whole. Manatū Taonga is not currently involved in talks about the future of the Chateau and cannot comment on the cost involved with its preservation.”

Government ministers contacted by Stuff were not able to comment on whether any funding was available.

Kirton said he would raise the issue at a meeting of regional mayors on Tuesday.

He thought it unlikely the Chateau would re-open in time for skiing this winter.

He was hopeful any new operator would be given a window of about 20 years to rectify any issues, in line with policies for other buildings.

Kah New Zealand said it had been offered a 25-year lease with the possibility of an extension of another 10 years to undertake rectification works.