Demand for Queenstown accommodation is at an all-time high, with people living in vehicles, garages and overcrowded flats.
Mantra Marina Hotel complex general manager Matt Christensen said the situation was becoming desperate for tourist operators trying to find staff who are being priced out of the rental market.
Three of his staff pay $125 each in rent for single beds in a shared small room.
But they aren't the only ones. Mike Carroll lives with 10 other people and pays $175 a week for a room which he shares with one other.
He arrived in Queenstown from the UK to train as a ski instructor, but is struggling to pay rent while working in hospitality as he waits for his course to start.
"When i first got here I was told by my friends it was great quality of living and that I'd find a house relatively easily, which didn't turn out to be the case."
He spent weeks living in a hostel before finding a room in a house, two months after he arrived, but the house hasn't had much work done on it in the past 20 years and he is squeezed into it with almost a dozen other people.
"This week I managed to get 24 hours of work and rent was half what I took home in my pay packet."
While he thought Queenstown was a beautiful place, he said other places in New Zealand were just as beautiful and offered better quality of living. He planned to leave after finishing his course.
Queenstown Council chief executive Mike Theelan said employers may hold the solution to the current worker accommodation crisis in the town.
The council was aware of the issue, but in many cases powerless to intervene, he said.
However he said pressure for worker accommodation may prompt some employers to come to the party.
"Obviously part of Queenstown's particular circumstances are simply on the basis of a very booming tourist industry.
"Traditionally some employers have provided accommodation - they may need to look at that in the future going forward."
Pressure on Queenstown accommodation is also not helped by property owners signing up with short-term rental agencies like Airbnb, Mr Theelan said.