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Police were called last night to a backpacker party involving up to 60 people in a Queenstown park.
Footage from the area shows backpackers spilling out of Deco Backpackers, which backs onto Rotary Park on Lake St in Queenstown.
Officers were called about 5.45pm to find a group of about 60 people having a party, a police spokesperson said.
They had spoken to the hostel's occupants about the current lockdown requirements.
Since Thursday, New Zealand has been at alert level 4 for Covid-19, with severe restrictions on what people can do.
Everyone is required to stay home, except to exercise locally or to visit or work in essential services such as supermarkets.
Under the rules, backpacker accommodation is considered an essential service and can remain open.
However, the Government has specified that hostels and campgrounds must operate under very strict protocols - such as maintaining contact only between people in the same room, the closure of common social and recreation areas, and split shift access to common areas.
A person at the hostel told The New Zealand Herald last night no manager was available but claimed the police callout was due to a noise complaint from neighbours.
Police had confiscated the stereo, he said.
He said there were 25 people staying at the hostel and they had all been together for around three weeks and were all in one bubble.
Hundreds of people have been dobbed in for flouting lockdown rules in the four days since it began, while a new police website set up to report breaches has been swamped.
Police said in the first two days of the lockdown they had been called to deal with breaches including reports of Covid parties.
Before the lockdown, the Government had already imposed a two-week self-isolation period for anyone entering New Zealand. However, concerns were raised about what this meant for tourists, who have limited accommodation options for self-quarantine.
Several tourists have been arrested and were to be deported for refusing to self-isolate correctly.