More visitors to Rotorua are choosing to stay in Airbnb-type accommodation, according to new figures showing a 67 per cent rise in guest nights this summer.
But the sector's growing popularity is not being applauded by all.
The figures come from the latest Infometrics Quarterly Economic Monitor for March 2018 and show the significant rise Airbnb accommodation in the city experienced during the 2017/18 summer, compared with the summer before.
The growth was 10 times that of commercial accommodation, which saw guest night numbers rise 6.7 per cent in the year to March 2018.
Infometrics economist Brad Olsen said tourists could not always find a hotel room within their budget.
"Private accommodation options, such as [the home-sharing platform] Airbnb, are becoming more sought after so that people can still go on their holidays."
Infometrics' report also said nationally growth in commercial guest nights would have been faster "had it not been for the increasing prevalence of private accommodation being provided through platforms such as Airbnb".
Glenn and Sharon Brooks were moteliers for 30 years before becoming private accommodation hosts at Lake Tarawera last year.
"It certainly seems a shame that moteliers feel so threatened by Airbnb and Bookabach. I am sure that the tourist industry and shop owners are grateful for the increase in tourists," Sharon said.
"2015, 2016, 2017 were booming years for the motel industry and the upward trend for tourist numbers continues."
Brooks said she and Glenn had not felt the impact of Airbnb and Bookabach when they left the motel industry 11 months prior.
She put that down to being a good business operator, knowing what guests needed and presenting the property well.
"Rotorua needs to stop quarrelling and start reclaiming seats in the tourism arena," she said.
A new report released by Deloitte last month showed Airbnb was supporting more than 6000 jobs in New Zealand.
The report titled "Economic effects of Airbnb in New Zealand" found guests spent more than $781 million which contributed around $660m to the national economy in 2017.
Two-thirds of the spending was outside Auckland and three-quarters were for items other than accommodation, such as groceries, transport, shopping and entertainment.
However, some moteliers in Rotorua believe Airbnb creates an unlevel playing field for those in the sector.
Rotorua Motel Association acting chairwoman and RotoVegas Motel manager Shelley Hobson-Powell said the association was "not against Airbnb when it was just families renting out a spare bed".
She said now there were "hundreds of houses in the Rotorua area purely rented out for Airbnb profits".
Hobson-Powell believed motels were paying significantly more rates than Airbnbs, and motels were paying GST - which a lot of private Airbnbs weren't registered for.
"As far as the winter months go, some properties cannot compete and have to cut back staff. There needs to be a line in the sand."
Mike Gallagher, owner of Arista Rotorua, said private accommodation was causing a "semi price war" with motels like his own.
"On May 23 there were 18 properties with a room rate between $80 and $90 on booking.com. These room rates are cheaper than back in 2010 and by the time you pay 15 per cent commission to booking.com, GST, running costs and staff wages, there is certainly nothing left for improvements."
Gallagher said during the peak summer season there was a need for holiday rentals to help provide accommodation, but there needed to be a level playing field.
He also said insurance laws need updating so that property investors with holiday rentals were encouraged to put properties back into the domestic rental pool to ease the housing crisis.
Since 2009, the council has charged commercial rates if a holiday home is let for more than 100 days per year.
Rotorua Lakes Council is proposing a district plan change that would require holiday rental operators to apply for a resource consent if more than 12 people stay on site per night, or if there is less that one car park for every four guests.
Submissions have been received and a report is being prepared ahead of the hearing on June 14.