Hotel of the week: Blanket Bay

You'll find Blanket Bay in New Zealand's Tolkien country, just around the corner from Paradise... No wonder it's out of this world

Blanket Bay is close to Paradise. Rather, this small exclusive wilderness lodge is near to the valley that takes its name from the Paradise ducks - known for their silky, dark-green plumage and life-long devotion to one mate - that populate this part of New Zealand's South Island.

Paradise lives up to expectations, in a rugged way. Set in the Mount Aspiring National Park, it is framed by the Southern Alps and is part of Te Wahipounamu, the South West New Zealand Unesco World Heritage Area. The landscape is more Tolkienesque than most - several locations around tiny Glenorchy village were used in the Lord of the Rings films.

The Paradise duck is also the emblem for Blanket Bay, the hotel's location. It teeters on the western edge of the thunderbolt-shaped Lake Wakatipu, a mile from Glenorchy. This is splendid isolation. The three-storey lodge was carefully conceived to blend with its surroundings - constructed from local schist and reclaimed beams. Inside, a double-height hall (referred to by staff as Middle Earth) is enhanced by a giant antler chandelier, exposed stone, and a wall of windows.

Blanket Bay is a labour of love for its owners, Americans Tom and Pauline Tusher. Tom, a former president of Levi Strauss, stumbled on the land 30 years ago, and plans for a house gradually extended to a hotel, albeit a small and exclusive one, now in its sixth year. The lodge is surrounded by a 65,000-acre high country station called the Wyuna, also owned by the Tushers.

A fellow guest summed up the amazing scene when he whispered to his wife as they gazed at the lake: "Imagine living your whole life and never knowing this existed."

The location

Spectacular - the snow-dusted peaks of the Humbolt Mountains loom on the other side of the lake - no cars, no lights, no one.

The comfort factor

There are just 12 rooms; five in the lodge, three suites and four chalet rooms housed in two smaller properties adjacent. Polished wooden floors, wooden furniture and gigantic comfortable beds are the order of the day. All have TV with satellite channels and DVDs and piped music, and fresh milk for tea and coffee-making is a thoughtful touch.

The bathroom

All terracotta and wood-clad with large baths and separate showers. Freshly scented lemon and lime aromatherapy products are specially formulated for the lodge.

The food and drink

There is a drinks party most evenings in the bar, but no pressure to attend. Lunch is casual, dinner more sophisticated - offering local lamb and fish, such as Mount Cook salmon. The Tushers own the Amisfield vineyard near Queenstown - so try some delicious Otago pinot noir.

The people

Americans and Brits doing New Zealand in style. Locals say Blanket Bay has hosted Bill Gates and film director Peter Jackson. I'm sure I saw a Getty, but the owners are too discreet to givenames.

The area

It's one of the world's best adventure playgrounds. Jet-boating, fly-fishing, kayaking - the list goes on. You can also book a helicopter tour with Alfie Speight, a pilot who worked on Lord of the Rings, to Milford Sound and Mount Earnslaw glacier. Or ride along the lake shore with Ruth Ann, who manages the farm and stables. Some stunning walking trails - Routeburn, Greenstone and Rees - start nearby.

The access

There is one lodge room designed to offer wheelchair access. Children aged over 13 are welcome. No pets.

The damage

Double rooms start at NZ$1,290 (£460) per night, including breakfast and evening meal.

The address

Blanket Bay, Glenorchy, Otago, New Zealand (00 64 3 442 9442; blanketbay.com).

The author travelled as a guest of Air New Zealand (0800 028 4149; airnew zealand.co.uk), which offers return fares in economy from £800 and business premier from £2,800