The tourists from Sydney had rented a Stabicraft boat from Frankton Marina for a sightseeing trip around the lake.
However, they got more of an adventure than they had bargained for.
Alex Eisman, one of the group of four men and one woman, said they stopped for lunch at 3pm and the boat would not restart.
They were due back at the marina at 4pm.
"We paddled, with tiny paddles, for about an hour and a-half to Pigeon Island.
"We docked the boat and whistled and waved at helicopters.
"When it got darker, we lit the flare," he said.
They were cold and afraid they would be stranded on the island for the night without equipment or provisions, he said.
The area had no cellphone coverage.
They tried the engine again at 6.30pm and it started.
They were picked up by Coast Guard Queenstown north of Rats Point just after 7pm.
Mr Eisman said they activated the flashes on their cameras to attract the Coast Guard's attention.
"We were so relieved to be found because we couldn't see much on the way back," he said.
The boat's owner, Owen Fallow, of Water Sport World, said he became worried when the group did not arrive back at 4pm.
He alerted emergency services at 5pm and the Coast Guard and other Queenstown boating companies went out to search the lake.
"This is my 20th year in business and it's never happened before.
"My main concern was that they are safe," Mr Fallow said.
It was a mystery why the boat would not start because nothing appeared to be wrong with it.
"The Coast Guard drove the boat on its own steam back to the marina," he said.
The boat would get a full service, he said.
A safety feature of the boat, that it had to be in neutral to start, was a possible explanation for the problem, he said.
Coast Guard Jay Berriman said it was a good idea for the tourists to use their camera flashes in a bid to attract attention.
He used radar to find the boat.
Constable Mel Rowlands, of Queenstown, said she spoke to the group but would be making no further inquiries.
It was a lesson for other boating tourists to make sure they had adequate gear and clothing in case of mechanical failure.
