The owner of the iconic hotel is strugging to renew a lease amid looming maintenance costs. Photo / Alan Gibson
The owner of the iconic hotel is strugging to renew a lease amid looming maintenance costs. Photo / Alan Gibson
The Chateau Tongariro is struggling to agree on a new lease with the Department of Conservation and local iwi, following the April 2020 expiry of its 30-year agreement for the use of Crown land.
Department of Conservation (DoC) manager George Taylor confirmed that the Chateau had continued as a "monthlytenant" for the past two and a half years and negotiations to agree on a new long-term lease were ongoing
The iconic hotel is located in the Central North Island's Tongariro National Park. Its buildings, though not the land on which they sit, are owned by KAH New Zealand, a subsidiary of Singapore-based parent company KAH Motor, and controlled by the Loh family. KAH bought the Chateau from the New Zealand government in 1990.
Taylor said there was no dispute between the Crown and KAH, and should there be one, the original agreement provides a mechanism for how to proceed. However, sources close to the hotel, though not authorised to speak on its behalf, said that while there is no formal dispute, the drawn-out negotiations have been a sore point for KAH.
They said the Chateau complex, the centrepiece of which is a four-storey neo-Georgian building completed in 1929, is in need of considerable renovation and that uncertainty over the long-term cost and terms of the lease are a significant impediment to any new investment.
The Chateau complex is in need of considerable renovation. Photo / Supplied
Peter Pysk, vice president of operations - Oceania for KAH's sister company Bayview International, which manages the Chateau and is owned by the same overseas parent, declined to comment on the matter.
Taylor said DoC had offered a new long-term agreement to KAH, but confirmed that consultation with the iwi Ngāti Tūwharetoa, and specifically the sub-group Ngāti Hikairo Ki Tongariro, is required to finalise a lease.
The iwi did not respond to the Herald's request for an interview. However, Taylor noted that "depending on changes agreed during negotiations [with KAH], further consultation may be needed before a new lease is granted".
In 2017, the Crown and Tūwharetoa finalised a Deed of Settlement which acknowledged and apologised for historical breaches of the Treaty of Waitangi and settled all Ngāti Tūwharetoa historical claims over the Tongariro National Park.
However, it stipulated "cultural redress" to provide for the iwi's ongoing interests in the park and appears to have given rise to the group's role in the Chateau's lease negotiations.
While the Chateau employs an on-site maintenance crew to care for both the hotel buildings and the grounds, sources said much more thoroughgoing investment is needed. The Chateau was built in the imposing style of the Canadian railway hotels, but parts of the interior are now both mouldy and shabby, and sources said a new roof was among the significant investments needed.
Lack of a long-term lease is hindering the investment needed to upgrade the Chateau. Photo / Supplied
Its disrepair, they said, has led to numerous leaks, which have produced problems including persistent black mould in areas including around the fireplace and ceiling in the fading grandeur of the main Lounge Bar.
The Chateau remains an important tourist attraction in the region, which is reeling from the news that financial distress has pushed local ski operator Ruapehu Alpine Lifts into voluntary administration.
Ruapehu Alpine Lifts operates both the Whakapapa and Tūroa skifields (the Whakapapa ski area is just a 10-minute drive from the Chateau).
The Chateau, however, appears to be in better financial health than the skifields. KAH's most recent financial statements show a profit of $2.22 million for the year ended December 2021, and $4.62m for the previous year (KAH owns both the Chateau and the Wairakei Resort in Taupō and financial statements cover both properties). The company received more than $4m through the government wage subsidy and Covid-related resurgence support payment in the period.
KAH also turned modest profits from 2016 to 2019; in the four years before that, which followed the financial crisis, it posted losses. Its cash reserves now sit at $18.8m, the last financial statement shows.
Separately, the Chateau owners are also embroiled in long-running difficulties tied to employment disputes and a government investigation is probing allegations of staff mistreatment, including labour law abuses.
The Ministry of Business, Innovation and Employment has confirmed an ongoing investigation into "minimum employment standards", and workplace health and safety regulator WorkSafe New Zealand has also been on-site at the hotel in recent months and issued three improvement notices.
