Holidaymakers and rush-hour commuters slowed to a crawl for about an hour following the crash, which involved two cars, on Tuesday, at 5.10pm. Queenstown police officers, Frankton firefighters and St John Queenstown ambulance officers responded to the emergency.
Tracey Dodds, of Arrowtown, said her son, Kane Dodds (18), had been driving home from work on Glenda Dr. She said she was furious the accident had occurred at the intersection and wanted traffic lights installed to prevent more crashes.
"How many accidents does it take? That poor lady's gone to hospital, [her son's car] is written off.
Her son was "all right, thankfully".
Acting Sergeant Tracy Haggart, of Queenstown, said a man driving a Ford Falcon XR8 pulled out of Glenda Dr to turn right when a 46-year-old Queenstown woman was driving a 2009 Mazda Sedan towards the resort.
"Traffic volume was reasonably high and busy. The male driver reported a vehicle was towing a trailer in the second lane, into the left-turn bay into Glenda Dr, and it distracted him a little bit and couldn't see the woman's car in the straight through-lane until the last moment.
"There's definitely been a few accidents, but it's just one of those intersections where it is a highway.
"Traffic has been reduced to 80kmh. Workers were going home and it is the holiday period, so there's more traffic, which requires extra caution to make sure the way is clear."
Inquiries were continuing, Sgt Haggart said.
The woman was assessed by ambulance officers. She was shaken but otherwise unhurt, as was the male driver, St John Queenstown team manager Alana Reid said.
"It is an intersection which has been identified as needing an upgrade. There was a proposal and any safety improvements are worth it."
In its 2009 notice of requirement to make alterations to the highway, the New Zealand Transport Agency reported the Glenda Dr intersection averaged 1.2 injury crashes per year, over five years, from 2004 to 2008 inclusive.
"A crash rate closer to 0.3 per year might be expected," the notice said.
The Queenstown Lakes District Council and NZTA are working on a roundabout with the aim of relieving traffic pressure on the intersection and eventually connecting to the proposed eastern access road to Remarkables Park Town Centre.
The roundabout is estimated to cost at least $2.5 million and it is proposed it should be situated 150m west of Glenda Dr, towards Queenstown. The intersection would be downgraded to a left-turn only.
Council transport manager Denis Mander said yesterday the roundabout would be 150m away to ensure Queenstown-bound motorists did not drive into a hidden queue as they came up from Shotover Bridge.
Mr Mander said roundabout planning was advanced and both entities were going through the consent process.
"Consents were applied for in late 2009, the hearing was in early 2010 and we are currently attempting to resolve the appeal by Shotover Park Ltd.
"There are matters of detail, as well as the extension of the roading further in Frankton Flats, which they want constructed."
Mr Mander said he anticipated the roundabout would be constructed this year, provided the consents were resolved.