Abandoned Hotel In Paradise
Anyone visiting Rarotonga for longer than a refuelling stop en route to New Zealand or the U.S. will probably hear about the scandal surrounding an abandoned hotel complex on the south coast.
A ghostly crescent of hotel rooms overlooks the main road around Rarotonga as it skirts the lagoon that encircles the island.
The Missing Millions
It’s interesting to read that in 1984 the United Nations Development Program advised Rarotonga that the best way to maximise the tourist dollar was to encourage the development of large scale hotels and prevent the construction of smaller, family run outfits. It may have been this advice that lead to the government’s support for the ill-fated development in Vaiamaanga. Unable to attract the required foreign investment, they decided to back an Italian company’s bid to build Rarotonga’s first luxury 4-star hotel and golf course by acting as guarantors for a NZ$52 million loan. Sheraton agreed to manage the property and work began on its construction in 1990. Within a few years the Italian contractors went bust and a second company had to be brought in to finish the build.
In 1998 an Italian government crackdown on the Mafia lead to the arrest of several people involved in the Rarotonga project and construction was thwarted once again. Italian insurers froze coverage on the loan and the complex was abandoned crippling the country’s finances. The hotel had reached an astonishing 80% completion and the government’s liability had ballooned to NZ$122 million – accounting for about half the country’s national debt. One of the best sources for information on this has been Moon Handbooks South Pacific written by David Stanley, and David’s personal blog.
4 Further Attempts At Development
Numerous prospectors have become involved with the hotel since its abandonment but none as of yet have had any success with the project. In 1998 a group of Japanese/Hawaiian investors paid a NZ$300,000 advance on the lease – the Japanese partner was later arrested for tax fraud. In 2000 an attempt to convert it into a casino-equipped Hilton was disrupted by persistent local anti-gambling activists; and finally in 2002 the government sacrificed an opportunity to have Outrigger Hotels of Hawaii manage the property in favour of a proposal by Cook Islands native Tim Tepaki. This latest attempt is still ongoing and also involves the Hilton Hotels Group.
The Current Outlook
According to Islands Business:
Tim Tepaki believes that high-end tourism is the answer to migration problems facing his homeland. He’s hopeful that building a five-star hotel on Rarotonga may help stem decades of migration loss by attracting talented countrymen and women back to their homeland.
“We are of course hopeful that introducing an international brand to the Cook Islands will raise service standards and wages accordingly and perhaps go some way towards meeting the expectations of those wishing to return home,”
Among other promises, Tepaki has pledged to set up recruitment offices for Cook Islanders in New Zealand and Australia, conduct full training for those needing it, and most notably, pay back the NZ$55 million in public debt owing on the hotel. Most recently the McEwan Group of Auckland has been brought on board and following the introduction of the controversial Unit Titles Bill initiated by Tepaki, the project is being marketed to small investors as a timeshare property and a sales showroom has been setup onsite (see far left of Photo 1 – taken March 2008).
The Cook Islands Government said in 2003 that:
“Developing the site will involve carving out a wide crescent-shaped area of land in front of the property to bring the lagoon closer to the hotel. A small motu (island) in the lagoon extension will feature a restaurant which will be connected to the main hotel by a walkway over the water.”
The Hilton Hotels website currently reads:
“Designed with local artisans for a distinctly Pacific feel, Hilton Rarotonga Resort & Spa is the first international five star resort in the Cook Islands. Completely surrounded by exquisite tropical landscaping, you will start to unwind the moment you arrive. Laze at your leisure in our freshwater pools or the saltwater lagoon before wandering down to our world-class spa for an aromatic massage.”
Both Rarotonga and Aitutaki are destinations quite unique to themselves. A very obvious lack of international hotel chains and eating establishments makes for sleepy, lived-in islands that ooze character and appeal. Idyllic, lavish five-star island hotels are two-a-penny these days whereas the charm of these islands is something that has been eroded in many places around the world through poorly managed development.
Could the introduction of high-end tourism help to retain Cook Islanders and attract others back to their home from nearby New Zealand, or could it simply devastate these precious communities? Will this infamous Rarotonga hotel ever be finished?