From the late 19th century the government took control of tourist sites such as Rotorua’s thermal pools and the Milford Track, in the hope of boosting overseas tourist numbers. In 1895 the government also took over the Hermitage Hotel near Mt Cook, and soon after built or purchased accommodation houses near Rotorua, Lake Waikaremoana, Waitomo, Lake Pūkaki and Te Anau. The Department of Tourist and Health Resorts was established in 1901, in part to operate these hotels. These early investments produced disappointing results and attracted few overseas visitors. By 1920 Waitomo was the only resort to consistently return a profit.
To reduce its losses, the Department formed partnerships with entrepreneurs. One was with Rodolph Wigley, who leased the Hermitage, and was later chosen to develop the Chateau in Tongariro National Park.
The economic depression and war further delayed hopes of a tourism boom. The Chateau went broke in 1931 and was taken over by the government. It had been built in haste and required extensive improvements. During the 1940s the government took over four failing tourist hotels, and by 1949 it owned nine.
Hotel standards were basic well into the 20th century. In 1950, Queenstown had only four licensed hotels, and visitors were often expected to share twin rooms – or even double beds – with strangers. Food was unvaryingly dull. Diners at plush hotels such as Wellington’s Waterloo were made to rush through their dinner by 7 p.m. to keep down staff costs.
In 1950, the government hosted a conference at the Chateau to promote private-sector tourist accommodation. The conference identified a plethora of barriers, including restrictive liquor and employment laws, high wages, government price controls, and the fact that most hotels were owned by breweries interested in selling alcohol rather than providing accommodation. The often terrible standard of food, service and facilities in New Zealand hotels was also noted by delegates.
Tourist Hotel Corporation
One government response to tourist accommodation shortages was to expand the number of tourist-hotel licences available. These had been introduced in 1948 to enable some hotels to sell liquor to their guests (but not to the general public). In 1955 the government established the Tourist Hotel Corporation (THC) to manage its growing hotel portfolio and encourage industry growth. In the 1960s the THC expanded its hotel network to areas such as the Bay of Islands and Wānaka.
Second career for All Blacks
Hotel management did not always require training in the industry. In the past, hotel managers were sometimes retired All Blacks or other sportsmen who fostered a ‘matey culture of rugby, racing and beer’.1 A public profile was qualification enough to run the place.
A tourist accommodation development scheme introduced in 1963 gave substantial government assistance to new hotels. This resulted in international chains opening large hotels in Auckland, Wellington, Christchurch, Queenstown and Dunedin.
The jet age finally brought the overseas tourists that the government had dreamed of. By 2006, the majority of hotel guests and over a quarter of motel guests were overseas visitors. The government gradually withdrew from direct involvement in accommodation. The THC was sold to another hotel chain in 1990.