"My issue with it is that nobody is monitoring the situation properly and it is just becoming an escalating problem."
Under the act, camping is prohibited in areas clearly identified with relevant signage. Breaches can result in instant $200 fines, or up to $10,000 for more serious offending.
Mr Timmer said locals were becoming annoyed about the number of people using the area now that the nearby Department of Conservation campsite was closed.
"It's a growing issue and I've spoken to the council ... [freedom camping] is taking over the whole area."
While the practice wasn't prohibited, the problem was worsening, Mr Timmer said.
The campers weren't contributing to honesty boxes and were having a "free ride".
Mr Timmer said his holiday park was 3km away from the site and he was concerned as November figures for his business were down.
Freedom camping has caused friction in other communities.
In February 2011, a 59-year-old man was charged with attempted murder after smashing the lights and windows of a campervan that was parked overnight in a Golden Bay reserve and starting a fire in the cab.
He was later found not guilty by reason of insanity.
Meanwhile, a new survey measuring the value of campervan tourism shows campervan travellers contribute more than $500 million a year to the national economy.
Nearly 64,000 campervans were hired last year - providing accommodation and transport for 21,347 Kiwi holidaymakers and 116,776 international visitors.
Rotorua and the Bay of Plenty were visited by 59 per cent of international campervan tourists in 2011. Overall, campervan tourists spent $547.2 million, each domestic tourist spending an average of $1527 ($194 per night) during their travels and each international tourist $3208 ($204 per night) - including the cost of the van.
The advocacy manager for the Tourism Industry Association, Geoff Ensor, said the number of campervan tourists had grown in the past five years.
"Certainly it's increased in popularity - I'd say over the last decade we've seen a significant increase in the numbers.
"It's reinforced the importance of this slice of the tourism market."
International campervan tourists tended to stay longer and spend more, Mr Ensor said.
Campervan travellers also spent most nights at paid sites - 75 per cent for domestic tourists and 89 per cent for international.
Nearly half of international respondents visited both the North and South islands, while the figure for domestic respondents was 20 per cent.
Australians were the biggest customers, hiring 18,310 campervans last year, followed by those from Europe (9510), United Kingdom (9090) and Germany (6660).
By the numbers
63,930 campervans hired
15.5 days - average length of hire
2.2 adults average per campervan
$547.2 million spent by campervan visitors in 2011
Source: Covec
