Mollies, a luxury boutique hotel in Herne Bay, is to close its doors at the end of next month.
The hotel, which has hosted celebrities including Sean Connery, Shania Twain, Jay-Z, Beyonce and Rachel Hunter, may become a bed-and-breakfast.
Owner Murray Rose, who lives on site with his wife, Nicola, and their children (plus pets), says he is "looking into restructuring the business".
Transforming Mollies to a mid-market B&B has been proposed.
Mr Rose said the hotel was no longer a member of Relais & Chateaux, an association of top-end hotels around the world.
New Zealand members include Kauri Cliffs in Northland, Huka Lodge at Taupo and Cape Kidnappers in Hawkes Bay.
Mollies was built in the 1870s as the home of Archibald Clark, who had been the first Mayor of Auckland in 1851, and was a convent, boarding house and private home before entrepreneur Mollie Wilson bought it in the 1950s, opening as the Harbour Bridge Motel.
It quickly became an international success, winning a slew of awards and being included on numerous must-stay lists.
Last year, the hotel, which has 13 double suites, a day spa and bar-restaurant open to the public, was on the Conde Naste Gold Traveller List, which features the world's best 108 hotels.
It has also been honoured by US-based invitation-only travel club Virtuoso, which specialises in luxury travel. Mollies is its only Auckland member.
The hotel's restaurant has also been on many best-eatery lists and won the "Best Night Out" category in Metro magazine's Restaurant of the Year Awards in 2008.
Murray and Nicola Rose took over the business at the end of March last year from Frances Wilson and Stephen Fitzgerald.
Shortly before the handover, Ms Wilson, a former opera teacher in London and New York and Mercury Theatre opera coach and choir mistress, said they were selling the business because they wanted to spend more time pursuing their interest in music.
Ms Wilson and Mr Fitzgerald had spent 10 years establishing Mollies as a luxury boutique hotel after buying the property in 2000 from Mollie, Ms Wilson's mother.
In the 1890s, the home was occupied by the Little Sisters of the Poor, whose convent is now opposite Mollies.
- Additional reporting: Amelia Wade