Starting in 1881 the government obtained about 2,000 hectares around Lake Rotorua, including all the best springs. Rotorua was declared a township and its development as a health resort and tourist centre began. At Sulphur Point (later known as the Government Gardens) a cluster of bathhouses were built from 1882 on. At Te Aroha, north-east of Hamilton, eight hectares had been gifted to the Crown by the Marutūahu chief Te Mōkena Hou in 1880, on condition that Māori could continue to use the waters. From 1883 the government built bathhouses, and by 1885 more people were visiting Te Aroha than Rotorua, because of the rail link to Auckland. Only after 1894, when the railway reached Rotorua, was Te Aroha’s popularity eclipsed. And in the South Island in 1883, the government constructed swimming pools and bathhouses at Hanmer Springs, North Canterbury.
Rotorua, Te Aroha and Hanmer were the three main government spas, but in the later 19th and early 20th centuries public money developed springs at Maruia on the West Coast, Mōrere and Te Puia on the east coast of the North Island, Parakai near the Kaipara Harbour, and the Armed Constabulary Baths near Taupō.