The final cost of repairs after this week's major floods in Westland is expected to run to millions of dollars.
Waiho River breached its banks near Franz Josef on Wednesday night, forcing people in the hotel and a neighbouring camping ground to be evacuated.
Westland Civil Defence public information manager Andy Thompson said the river needed to be redirected and a protective wall created.
"Potentially hundreds of thousands into millions of dollars, especially if they decide they're going to do some work inside the riverbed itself.
"An estimate was up to $10 million to dig the channel out and it might only last two years."
Mr Thompson said work had finished on diverting the flow of water away from the hotel, but the protective bank was yet to be reinstated.
The regional and district councils, hotels and the Franz Josef Working Group needed to work together to find a long-term solution, he said.
Fixing the area that flooded one kilometre north of the town would come at a cost, he said, adding that while some remedial protective work had been done, it wasn't as comprehensive as that done further upstream.
It would now be up to insurance assessors to decide which parts of The Mueller hotel could be kept.
"The damage is extensive. [The hotel has] got a metre of gravel leading up to it and a lot of rock, river gravel, through the hotel itself. They do not know yet the structural integrity of the building."
"Two of the cottages where the managers lived are most likely to be demolished. They had water up to the eaves. Those are on a low-lying area so those are significantly damaged."