Quarantine hotels creating an "overflow" of Rotorua clientele could well be the lifeline that keeps local accommodation providers afloat as alert levels rise.

Some providers are saying although alert level 3 could be "devastating" for the industry, a budding few months caused by a "redistribution" of clientele means survival would be likely.

Rotorua Moteliers Association chairman and owner of the Arista of Rotorua motel and Capri on Fenton, Mike Gallagher, said the "overflow" and "redistribution" of clientele as a result of the quarantine hotels has helped local motels.

He said they had a "good run" over the last few months and it had been "really really nice".

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Quarantine hotels had created opportunities for motels and hotels who had zoned in on the domestic market, he said.

Jared Adams from Rotorua Top 10 Holiday Park. Photo / File
Jared Adams from Rotorua Top 10 Holiday Park. Photo / File

Not only that, but motels had also benefitted from the "baby boomer" market who were keeping them busy midweek and "spending their kids' inheritance", Gallagher said with a laugh.

For this reason, he said his business would likely be "okay" if alert levels were to rise.

However, it would still be "pretty devastating" for the industry and he especially felt for partners like restaurants and attractions providers, who would be "crippled", he said.

He said Aucklanders made up the majority of the local market and they had seen 80 per cent of their bookings cancelled since the announcements this week.

It was very much a "wait and see" game at the moment, he said.

Rotorua Top 10 Holiday Park owner Jared Adams said 90 per cent of his customer base were Aucklanders and his fully booked campground this weekend would now be a "ghost town".

He said a nationwide alert level change would be a "bit of a punch in the guts".

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"It's going to be devastating, but we will survive through it ... we almost expected it.

He said June and July had been "amazing" and they had been steadily busy. This would make a difference, he said.

Manager at Silver Fern Accommodation Rotorua, Maree McKernan, said although an alert level change was scary, they "got through it before and we can get through it again".

She said they had fielded cancellations from Auckland and around the country this week and the weekend was looking light.

"As an industry, we will all band together and get through this ... we don't need to panic."