One Napier motelier who didn't want to be named said their motel was fully booked for this festival nine months ago.
"We have had so many walk-ins and people are even still ringing us up asking for rooms. It is like Art Deco Weekend all over again."
Another motelier said any cancellations they had in the past two or three days were being filled instantly.
"People are just jumping in very quickly."
Green Party MP Marama Davidson, who travelled from Auckland for the festival, was one of many camping.
She initially booked a motel room but decided before she set off that she would rather give her room to a family in need, knowing about the accommodation shortage.
"With all the excess people coming in and those families housed by Ministry of Social Development being moved out for the festival I felt it was better if I camped."
She said it was easier for her being a single person to find somewhere to stay rather than a family looking for a room.
"There's another kapa haka group staying here and there is bound to be others staying here.
"I am hoping to mix and mingle with others - it should be a good time."
Ms Davidson was in high spirits and had her tent, sleeping bag, mattress from her child's cot and suitcase all ready to go.
"If the weather turns bad I'll just pack it all up and make a run for the car."
On her way down from Auckland Ms Davidson heard others weren't able to find hotels or motels and were looking at holiday homes instead.
"Though I have heard these are also getting down to the last one."
Hastings councillor Henare O'Keefe said their marae and house were also full, with accommodation bulging at the seams.
He said people were even commuting from Gisborne every day to get to the festival.
"It is a good problem to have, with the tills ringing furiously. We won't get Te Matatini for another 30 to 40 years so we should milk it for all it's worth."
Ms Dundas said if people were still looking for places to stay they should visit the i-Site in either Napier or Hastings.
"They will often know whether cancellations have come in and some run waiting lists so will notify people if any rooms become available."
