The town is built around a popular hot spring which was discovered in the late 19th century. The 2001 census gave a population of 663. The town's other main claim to fame, the South Island's leading rehabilitation centre for sufferers of drug addiction, Queen Mary Hospital, was controversially closed in 2003. As of 2004, a protracted battle over the protection of the building and surrounding arboretum is still in progress. There are two skifields in the area, Hanmer Springs Skifield and Mount Lyford.