The Grand Chateau Tongariro will close permanently from Sunday 5 February.

The Chateau, located in the Tongariro National Park, has been in consultation with the Department of Conservation (DOC) regarding the renewal of its 30-year lease, which expired in April 2020.

As part of the hotel's due diligence in preparing to renew the lease, it had specialists conduct site and seismic assessments as part of plans to renovate the building and surrounding infrastructure.

But the most recent seismic assessment found that underground shifts over time meant some of the hotel infrastructure no longer met current safety standards.

To ensure the safety of those at the hotel, including its 36 staff, the decision was made to close it.

Chateau Tongariro Hotel's parent company senior vice-president Kevin Peeris said it was disappointing and sad that the iconic hotel would have to shut its doors "despite initial plans to invest in its long-term future".

"The hotel has been given 25 years with the possibility of an extension of another 10 years to undertake rectification works, however the cost involved in these works, combined with other external factors such as the voluntary administration of Ruapehu Alpine Lifts and the poor snow season, and rebounding tourist numbers from the pandemic means continuing operations is not financially viable."

Discussions are underway with DOC regarding the handover of the property.

The hotel said it was supporting directly affected staff.

Ruapehu mayor Weston Kirton said there were still a lot of unanswered questions around the business.

The council was now engaging with stakeholders around next steps, he said.

They would also be working with central government to see whether they could get the business "up and running again in some shape or form".

Kirton said losing the hotel was a real "blow" for Ruapehu.

Owners of the Chateau Tongariro Hotel and its sister hotel, Wairakei Resort Taupō, have confirmed they will continue investing in New Zealand, and the Wairakei Resort Taupō and its staff are not impacted by the closure.