High-end camping accommodation that takes revenue from ratepayers is not the Queenstown Lakes District Council's business, chief executive Adam Feeley said in a statement.
After a review of the campgrounds, several issues and recommendations were identified.
''In general, the review found that financial performance is mixed and in some cases camps lose money and visitor accommodation is effectively being subsidised by ratepayers,'' Mr Feeley said.
''Some of the `higher end' holiday parks accommodation, although of an excellent standard, appears to be in direct competition with the private sector.''
Mayor Vanessa van Uden said the council was committed to providing access for everyone to affordable campgrounds.
This was despite the council considering reducing the scale and manner of council-operated camps.
''Council's intention to provide traditional, affordable, `Kiwi' camps, as identified in the 2005-06 review and revisited in 2011-12, has not wavered as a result of this week's decision,'' Ms van Uden said.
Mr Feeley said some camps were running at a loss and the council had outstanding debt.
''We have invested over $11 million of capital infrastructure to date in our district campgrounds, and it would not be prudent fiscal management to continue that investment when the ability to service greater debt would be, at best, financially marginal,'' he said.
Last week the council agreed not to operate camping facilities which competed ''with equivalent or greater facilities being operated by the private sector'' and required ''ratepayers to materially subsidise visitor accommodation in the district''.
''The next step will involve a detailed report on a preferred option for the future and scale of [the] council's involvement in campground management in the district to be completed before 30 June, 2013,'' he said.
The report would include recommendations to reduce operational costs at the four main holiday parks of Queenstown Lakeview, Wanaka Lakeview, Arrowtown and Glendhu Bay and possibly a commercial arrangement for private provision.
