Covid-19 Response Minister Chris Hipkins says the government is looking into longer-term options for managed isolation and quarantine.
Hipkins told Morning Report the government was considering options of buying or leasing some of the existing facilities used for MIQ, or setting up new ones.
"We've been looking at a range of options and it may be that we look to continue with some of our facilities in the longer term, whether that's buying them, whether it's leasing them, whether it's doing something different," he said.
"We may look at standing up some different looking facilities. Again, those are longer-term options, bearing in mind that to build a facility takes quite some time, but I think we are likely to need this capability and capacity for some time. Although it might look a bit different, we might not do as much of it I think we're still likely to need some of it."
Hipkins said any new facilities may look similar to hotel-based MIQ services but would be heavily adapted to provide longer term quarantine capabilities.
The minister would not comment on whether any property had been identified for long term use, but outlined some of the factors that could affect the location.
"I think we would avoid the central city, but we wouldn't want to be too far out of a major population area. The reason for that is you still have to staff the facilities, you still have to have people working in them and if you put them in the middle of nowhere that becomes very, very challenging and very difficult," he said.
"The facilities we have out by the airport in Auckland, for example, have served us very well. They've often got quite big outdoor spaces that mean you don't have to bus people to get their daily fresh air exercise. So, the CBD ones in Auckland, they've been more challenging for that reason."
Hipkins said customisation of MIQ facilities had so far been limited to customising air conditioning systems and changing the way people moved through the buildings.
However, if the facilities were going to be used for a longer period than expected, further customisation would be needed.
National's Covid-19 Response spokesperson Chris Bishop said it sometimes felt like Labour was pinching all National's ideas but it was good to hear the minister talking openly about purpose-built facilities.
"The hotels are just not fit for purpose ... as time has gone on the shortcomings of them have become obvious and there's been various infection control audits to back that up."
He said the government should have started working towards purpose-built facilities as early as October last year, when Victoria's state government did.
"Frankly it's in the national interest that we have it as well because again if you talk to the experts they're saying we're gonna have future pandemics."
He thought such facilities could be built within the next six-to-nine months - prefabricated housing as was being used in Australia could be rolled out quickly - or stood up faster if the plan was to simply buy hotels.
If the government planned to build quickly it would likely need to be contracted out to a private sector provider, he said.
His leader Judith Collins agreed the government should have been working on such plans faster, but had little faith that it would be successful.
"The government's ability to run anything I think is about limited to a bath," she said.
In Parliament this afternoon however, Hipkins repeatedly said nothing was certain, and plans about purpose-built facilities were for the long term.
"Doing that in the short term is quite difficult and creates a whole lot of risks but when we're thinking about longer term planning and sort of thinking where do we want to be a year from now, two years from now, then obviously we can think about things that perhaps weren't so feasible for short-term options" he said.
While it was possible some travellers into New Zealand by some time next year might not be required to enter MIQ - and it was too early to say who that might be - "we're still going to need to be doing it for at least some people, so we need to think about the longer term capacity".
Prime Minister Jacinda Ardern was also wary of committing to anything, emphasising the long-term nature of such a move.
"Nothing immediately on the horizon, but we're constantly looking at the arrangements we might have in future - what kind of capacity we might need, where they might be best located - and that's a dialogue that Cabinet continues to have."
She said it was not a change of tack for the government.
"We have not made any decision to change up the way we're doing things at the border. What we're doing is thinking a little bit into the future."
Government Covid-19 business adviser Rob Fyfe believes it is time to look at purpose-built isolation facilities.
Fyfe said he was among many, including fully vaccinated people, who could not travel offshore as MIQ spots were booked up, meaning he would not be able to get back into New Zealand.
He had been hearing from the business community that the scarcity of places in MIQ was having an impact on their ability to send staff overseas and that and companies were unable to recruit foreign workers, particularly for critical roles.
A long-term solution was needed, he told Checkpoint.
"I think we need something more than requisitioned hotel rooms and we're seeing a number of countries now around the world now starting to invest in dedicated MIQ facilities. I think that's absolutely something we need to be exploring as a country."
Otago University evolutionary virologist Dr Jemma Geoghegan said MIQ might be needed in the longer term, given the virus was still spreading and mutating offshore.
"The two notable variants that we have seen is the Alpha variant first and then the replacement of that by the Delta variant, which has exploded in frequency," she said.
"That means it's giving the virus a better advantage at infecting ourselves and replicating."
"As long as the virus is able to spread between people it is continually mutating and if those mutations are providing any sort of selective advantage that means the virus is evolving."
Geoghegan said future mutations might mean vaccinated people will need to have a booster shot or further vaccine to ensure the population is protected.
"If there are mutations that allow the virus to infect even when people are vaccinated, those types of mutations will provide an advantage for the virus and therefore are more likely to be transmitted onto the next person and then increasing frequency in the population."
She said it was important the New Zealand government based its future decisions on the latest genomic research from around the world.