He said at the Trenz tourism event that while many Kiwis still questioned the country's capacity to sustain tourism growth "we can and we will".
Visitor numbers are forecast to increase by 37 per cent to 5.1 million in 2024.
"I say bring it on," Davis said in Dunedin.
The Government was still consulting on a tourism levy to help pay for infrastructure and other facilities that were under pressure.
"It's a problem at peak times – but the negative perceptions persist and I don't want our environmental and tourist reputation damaged."
Overcrowding, and the resulting environmental problems, were the opposite of how New Zealand saw itself as a destination, and how it wants to be seen and remembered by international visitors.
"The forecast growth in tourism will make the challenges more acute, and we risk a hardening of New Zealanders' attitudes towards tourism."
He said it was fair that visitors should pay for the facilities and the services they used and to help maintain the conservation estate.
"There are several issues to figure out; who to include, who to exclude, how to collect, where to collect, how much, who it should go to and so on."
The levy would not be implemented until next year.
Davis said the Government's Provincial Growth Fund was an opportunity for tourism operators.
Already $35 million had been allocated to tourism related projects and following discussions with cabinet colleague Shane Jones, Davis encouraged operators to get proposals before the Ministry of Business, Innovation and Employment.
"He's saying go and get the projects and ideas in front of him."
Freedom camping rules were also being reviewed.
"Some of our policy settings, such as the Freedom Camping Act, were developed at a time when New Zealand was focused on attracting more visitors, so need to be looked at in light of the high visitor growth we have experienced and our new reality."
