Mr Gallagher said he was "deeply disappointed" to cancel the event two years running, but believed people would still travel to Queenstown that weekend and do their own running or biking missions, "which is great, and obviously that will help the district".
Entries from this year's event could roll over to next year, or 70 per cent of the entry fee could be refunded.
Gallagher said the Motatapu was now being planned for March 4 next year — which is shaping up to be a bumper weekend for the Wakatipu.
On Tuesday the New Zealand Open golf tournament announced it, too, had decided to cancel due to the Red setting.
The 102nd edition of the Open is now scheduled for March 2 to 5 at Millbrook Resort, to include a full field of players from the PGA Tour of Australia and the Asian and Japanese Tours.