Police followed the teen north on State Highway 2 towards Greytown, reaching speeds of 110km/h.
Sergeant Mike Sutton said the driving was described by a pursuing officer as "erratic".
"As they entered Greytown the speed has slowed, [but it was] still in excess of 50km and closer to the centre of Greytown he has lost control, the vehicle has gone into a spin and ended up on the wrong side of the road."
The car slid sideways into the hotel.
The 14-year-old and his 13-year-old passenger were pepper-sprayed and the older boy arrested.
Mr Sutton said police were concerned about the behaviour of both boys.
"We've got a 13-year-old and a 14-year-old taking a vehicle, they have driven it in a manner that increases the risk, not only to themselves but to the public.
"We have to look at the causes of why they are offending and what can be done to prevent their offending in the future.
"We're just lucky once again at the end of this pursuit no one has been injured ... 'Sheer luck' teen joyriders caused no injuries there is always the potential for things to be much worse," he said.
About 20 White Swan customers had a close call and owner Rob Slater said it was "sheer luck" no one was hurt.
He said the car swerved along the road and came sideways towards the hotel, running along the deck, and ended up pinned against a tree.
"The car was truly out of control.
He said the car crashed about half a metre from where customers had been sitting.
"The car came screaming through. As the car went sideways towards the deck, people jumped up from their tables, they were freaking out."
Mr Slater said the 14-year-old was abusive, swearing and struggling against police during arrest and believes the teens were pepper-sprayed so they could not "try and shoot off".
He said the driver has caused about $4000 to $5000 worth of damage.
The driver was remanded into Child, Youth and Family custody to reappear later this month.
The 13-year-old, believed to be from Featherston, was returned to his family and will be dealt with by Youth Aid.
