Following an extensive refit, The Assembly Gastro Pub, in the Upper Village hospitality precinct, just below the Skyline gondola, suddenly shut its doors about two weekends ago.
It is understood staff were all paid out.
The manager refused to comment.
Boasting seating for up to 300 people, the gastro pub was originally The Bavarian restaurant when Upper Village opened in late 2021.
However, last year the landlord took over the business, and for legal reasons was not able to keep The Bavarian brand.
In a statement this week, Upper Village Holdings said it was "in the process of working through development plans for worker accommodation in the Upper Village precinct at 35 Brecon St, formerly the site of The Assembly Gastro Pub".
It then stated, subject to resource and building consents, "the modern purpose-built facilities will be available for over 50 tenants and will offer multiple private living spaces and quiet pods for time out or private phone calls to family and friends back home".
Development and asset director Hamish Jackson said accommodation was tight for individuals arriving into Queenstown.
"We see this new development as a perfect springboard for new staff joining local tourism companies so they can set their roots in Queenstown."
A source said local businesses had contacted Upper Village’s owners asking if they would be keen on developing staff housing, but instead they decided to convert their own newly-refurbished gastro pub.
Before its closure The Assembly had earned a good reputation for its food, service and atmosphere.
— Philip Chandler
