A section of the main road from Fernhill to Queenstown has subsided after a "significant" burst water main caused havoc yesterday afternoon.
The burst main caused water to flood a lower part of the Heritage hotel, and saw water rush down the road to the One Mile roundabout and, separately, on to the Glenorchy Rd before a mudslide followed there.
On Fernhill Rd, the water appeared to be flowing underneath the asphalt, causing the foundations of the road to subside outside the Heritage.
Heritage hotel manager Kevin Kluts said up to 1m of water had flooded the ground-level carpark, and cars had needed to be moved.
"It could have been a lot worse, put it that way," Mr Kluts said.
"It was a torrent of water. If they hadn’t stopped it when they did, my assumption is it would have been a lot worse in terms of property damage."
The hotel relocated guests from the closest wing to the flooding and turned the power off "just to be on the safe side".
The utilities would be assessed today, but it was more of a cleanup and the hotel was still fully operational in the meantime, Mr Kluts said.
In a statement, the Queenstown Lakes District Council said a significant amount of water from a broken rising water main flowed down the road before the breaks could be isolated.
Fire and Emergency New Zealand (Fenz) shift manager Ian Littlejohn told the Otago Daily Times they received a call for assistance from police at 1.20pm.
The salvage work included drying out, squeegeeing and helping people in the Heritage move items from below water to above it, Mr Littlejohn said.
The road was expected to be closed for some time — cold temperatures could cause the remaining water on the road to freeze, causing a further hazard for drivers, the council said.
Residents were asked to avoid the area and conserve water while a fix was under way — an alternative route was available via Sunshine Bay.
The incident had affected one pair of bus stops at Fernhill, both outside the Heritage.
Orbus was not able to travel up or down Fernhill Rd; instead, buses were travelling along the Glenorchy Rd, to Sunshine Bay and Fernhill.
All other stops were able to be accessed, but delays were expected.
At 6.15pm, the Queenstown Lakes District Council said Fernhill Rd near the Heritage would remain closed overnight and into the morning, in an updated post on their Facebook page.
The council asked the public to continue to use the alternative route via Sunshine Bay and to reduce water usage where possible.
Contractors were continuing to work on repairing the broken water pipe.
