As Aucklanders start to arrive, Queenstown has only two SIQ units available for visitors who test positive for Covid-19.
Once they were full, visitors who needed to self-isolate would to be taken to a facility in Dunedin.
A Southern District Health Board spokeswoman confirmed the search continued for a suitable location.
In Queenstown last week, district health board chief executive Chris Fleming discussed more options with Queenstown Mayor Jim Boult and other resort officials, including from Destination Queenstown and the Queenstown Chamber of Commerce.
Mr Boult said he was told earlier this week the possible option being explored was no longer available.
"So I sent him two other possibilities, which had come across my radar ... and I await feedback."
Mr Fleming said the health board originally had five units in Dunedin, two in Queenstown and two in Invercargill.
"We’ve ... secured a sizeable facility in Dunedin that will give us another 22 units, and that will be our focal point for self-isolation facilities moving forward across 2022," he said.
The health board was still in negotiations regarding the lease for the Dunedin SIQ facility.
Bus company Ritchies would transport those who needed to be taken to Dunedin.
Of the 38,000 estimated visitors to Queenstown in the next couple of weeks, many would be holiday home owners, which meant they could self-isolate at home.
"If people wish to self-isolate in accommodation that they can extend, then that will be acceptable as well," he said.
South Islanders who can get home would be expected to return to their own homes, but people could not travel by plane, which meant North Islanders would have to self isolate in Queenstown.
Mr Boult said although he still had questions about the situation, he believed the logistics were as organised as they could be.
"I’m trusting them to do the job. My prime concern at this stage is to ensure that there are confirmed isolation facilities in Queenstown."
This week, Booking.com released data that showed Queenstown was the number one searched destination for New Zealanders this Christmas.
The first flight from Auckland yesterday morning had only two seats to spare, which "shows the popularity" of the resort, Mr Boult said.
He said the health board was committed to solving the SIQ issue.
"I appreciate that it’s a frustrating exercise to be trying to do this at the last minute, which is why I would have rather we got on to this at an earlier date, but I think they’re doing everything they can."
