But Mr Key also defended New Zealand's adventure tourism safety record.
During a press conference at the Trenz tourism expo, Mr Key also criticised Australian and British departure tax rises, reiterated his support for a convention centre in Queenstown and said he did not rule out a "bed tax".
The Prime Minister was asked his view on drug and alcohol-testing of people involved in aviation and adventure tourism operations, following separate Transport Accident Investigation Commission reports released this week which revealed cannabis was found in a Carterton balloon crash pilot and two commercial skydivers in the Fox Glacier plane crash.
"It's totally unacceptable to have people offering adventure tourism and having significant drugs and alcohol in their system.
"We need to solve that issue and we're going to go away and look at how we might achieve that."
Mr Key's comments yesterday came before he and Labour Minister Kate Wilkinson launched the operator advice and information providing website SupportAdventure.co.nz, an initiative from the Government-led Adventure Tourism Review.
Mr Key said he rejected "facts" used by the father of a Fox Glacier plane crash victim to claim in an internet campaign New Zealand was unsafe for tourists.
The Otago Daily Times asked Mr Key for his response to a YouTube video and social media campaign by Chris Coker which criticised New Zealand's adventure tourism safety standards.
Mr Coker said the death of his 24-year-old son Bradley was "completely avoidable" and illustrated the lack of proper regulation and control in New Zealand.
Mr Key said he wanted to pass sincere condolences to Mr Coker for the loss of his son, but "he needs to understand, as others do, that we take it very seriously in terms of improving safety standards".
"My fundamental view is that the industry is safe, for the most part it was safe, the vast bulk of operators have operated for a long period of time and the real changes we've made are about eliminating one or two rogues that tarnished the whole industry.
"What is not true are some of the claims made in terms of the number of deaths and the state of the industry. They are just factually incorrect, but I can understand his pain and we're committed to doing a better job."
Later in the conference, Mr Key said it was "critical" Christchurch had a new convention centre and part of an integrated offering with hotels, and that there was an opportunity for another in Queenstown.
"This is a place where a lot of people want to come. Trenz is one great example, but there are many, many other conventions that take place here, so we're in the early stages of discussions with a number of partners.
"Government's not ruling out putting in some money but, as has been the case with Auckland, our preferred option is put in less capital if we can . . but we're not ruling out, in places like Queenstown, that we would make kind of contribution."
He said he was open to discussions on a bed tax again, but one issue was how to fairly apply the levy across the range of accommodation providers.
"We're not sure that's the most efficient way, but we are looking at where there are other options for us to raise money and pour that back into the sector."
