A workers' camp has sprung up at the Ramada Hotel construction site near Queenstown Airport.
In what could be another symptom of the resort's housing and rental shortage, workers appear to be sleeping at the camp.
It now consists of three tents and two mobile homes.
The 54-unit hotel's developer and builder, Auckland's Safari Group, has yet to respond to the Otago Daily Times' request for comment.
Remarkables Park developer Alastair Porter, who sold the site to the Ramada Hotel group, said it could be a sign of Queenstown's housing crisis.
If that was the case, he laid the blame squarely on the Queenstown Lakes District Council, which was failing to work with developers to build basic infrastructure for residential development.
But work camps were more common than most people realised, Mr Porter said.
"Unfortunately it's not unprecedented - I've known of plenty of instances over the years when people have ostensibly lived on site.''
Another possible explanation was overnight security; he was aware tools had been stolen from the site recently.
Worksafe spokesman Sam Young referred the ODT's inquiries to the council, saying where people slept was "outside of our scope''.
QLDC communications adviser Rebecca Pitts said the council would only get involved if it received complaints from the public.
"Because this is occurring on private property it isn't covered under the freedom camping laws, so they are allowed to be there.''
An influx of workers and tourists into the resort has led to an acute shortage of affordable housing and rental properties.
Low paid workers and backpackers have been sleeping in tents on a vacant lot on the edge of the town centre, while bed-sharing is being offered as a rental option.
The council says hundreds of hectares of land are zoned residential and it is looking at ways of discouraging land banking.
Mayor Vanessa van Uden said the council was considering using rates to encourage landowners not to just sit on residentially zoned land.
