The warm, cerulean waters and pristine sandy beaches of Rarotonga seem like the perfect place for a holiday resort.

Guests could wake up in the lap of luxury, enjoy breakfast with a view before meandering down to the calm shore.

It was money in the bank, or so it seemed, before it all went horribly wrong.

With a circumference of 32 kilometres, Rarotonga is the largest of the Cook Islands. The ring road that circles the island is walkable, but it’s better by scooter or bike.

I was astride the latter, having nearly completed the loop, when I came across a ghostly vision.

The phantom resort sat in a jungle clearing. Thick green grass grew around a series of weathered cement pylons that led up to the eerie structure.

The unfinished rooms stood in a row at the edge of the foliage. They were neither inviting nor accommodating. A pair of goats munched lazily in front of one of the deserted bungalows.

A small would-be admin building, also unfinished, sat near the never completed grand entrance. An unsealed road ran up to form a sort of car park that was full of tin drums.

The main island road separated the spooky sight from the beach, but it was easy to see how prime the location was. It looked as if it was just about finished when workers downed tools and walked away … or perhaps vanished into thin air.

A large sign sporting a crudely painted message of “KEEP OUT” was attached to one of the palm trees on the front lawn. Further into the lot, the message was repeated in spray paint beside the front door.

As I looked for any sign of non-goat life, a man emerged from behind the buildings, machete in hand. He strode past the barrels in the car park, and toward the unsealed road that led to the beach, and to me. I jumped back on my bike and didn’t look back.

The remainder of the ride provided me with ample time to process what I’d seen. What was that place? What had happened there?

Rarotonga may be small, but it’s full of surprises. Over an unpredictable five hours, I’d encountered a ute full of unrestrained kids, a low-speed police scooter chase, a lengthy wait for crabs to cross the road, and a brief stopover at Sweet As Car Rentals.

Why shouldn’t I have expected an abandoned luxury resort?

Back at my comfortable and very much finished bungalow, I told my friend Matt about my journey. He listened patiently to my other encounters and then cut to the chase.

“Did you see the Sheraton?”

Matt filled me in on the scuttlebutt he’d heard at the Rarotonga Fishing Club: that the resort had been built in the late 1980s with what was alleged to be mafia money, and when that had fallen through the resort was abandoned, 80 per cent complete.

At one stage, Sheraton had been pegged to manage the finished resort, but pulled out before the implosion. Hilton was also briefly attached. Both appear to have dodged a bullet.

Numerous attempts to revive the project had crumbled in the years since. Problems had apparently included the Cook Islands’ prohibitive (but protective) land ownership laws and, perhaps more likely, a rumoured curse on Vaimaanga, the site in question.

Today it sits silent and unloved, except on the rare occasion it’s used as a post-apocalyptic paintball arena.

But is the phantom resort a massive missed opportunity? Did its failure impact the Cook Islands’ tourism industry? The answer is as complicated as the site’s history, and perhaps just as uncertain.

The collapse of the hotel in 1990 decimated the Cook Islands government coffers. Skilled locals fled the nation to find work abroad, particularly to New Zealand, with which the Cook Islands has a formal relationship.

That hit to the population is still felt today; the head count of just under 17,500 is about what it was in 1980.

On the other hand, the exodus of workers has caused the Cook Islands to steer harder into tourism, which has become the country’s prime industry. The image of a picture-perfect tropical escape sits alongside black pearls as the Cook Islands’ leading export.

Rarotonga isn’t exactly hurting for accommodation these days. The island’s booming tourism market is spoiled for choice, with eco retreats and luxury bungalows all around the tiny coast.

The island north of Raro, Aitutaki, features a premium private resort on top of one of the world’s most stunning lagoons. The overwater bungalows are among the best in the South Pacific.

The phantom resort was built in a time before overwater bungalows and eco tourism. It’s likely it would have been even more of an eyesore had it been completed; a dated hotel begging for a facelift.

The next day, I return to the site in my Sweet As car, compelled to have a closer look. Perhaps Mr Machete has gone home. A group of people in combat gear are assembled on the front lawn.

Suddenly, they scatter and begin shooting at each other. Paints of rainbow colours splatter against the markedly unpainted concrete walls of the never-was resort.

In its strange limbo, the unfinished resort has an unexpectedly special afterlife. It’s become an accidental tourist destination.