The Grand Mercure in Wellington has opened up a second floor to house the infected mariners from the Viking Bay.
So far, 15 of the 20 crew members have tested positive for the virus, at least one of them with the more-infectious delta variant.
The 5-star hotel is one of four dual-use managed isolation facilities housing both infected and non-infected returnees.
To manage the risk, the two groups are kept on separate floors with separate outdoor spaces and separate lifts.
Usually, the hotel just keeps one floor with ten rooms for infected people, but to accommodate the extra demand, the hotel has opened up a second floor and a further ten rooms.
Professor of Public Health, Michael Baker, told reporter Harry Lock the number of infected people does present a heightened risk, but it can still be managed.
