Backpacker accommodation providers and campgrounds were also losing income as a result of the bylaw, the report said.
The reserve was "very visible to tourist routes, particularly cruise ship tourists which view this area on their way into town," it said.
"Unsightly washing lines and airing mattresses are not considered by some to be an appropriate gateway experience to Napier for these tourists."
The council's regulatory committee is today expected to approve proceeding with public consultation on a review of the city's freedom camping bylaws which would see travellers in vans, station wagons and other "non-self-contained" vehicles banned from camping at what has become a popular overnight stop.
Under the proposed bylaw changes, holidaymakers in certified "self-contained" campervans - those with onboard toilets and washing facilities - will still be able to park overnight at the popular reserve carpark, but those wanting to camp out in regular vehicles will be banished to an out-of-town site at the southern end of Marine Parade.
The planned change comes just seven months after the current bylaw was put in place and follows complaints that campers have been making a mess of the reserve and creating a bad image for other tourists at a key "gateway" to the city.
In a report, council staff recommend changing the bylaw so that camping within the city limits in non-self-contained vehicles is restricted to a council carpark south of the new pump track near the intersection of Marine Parade and Ellison St, about 2km south of the central city.
The council's proposed amendments to the bylaw are supported by the Motor Caravan Association which represents users of self-contained vehicles.
Association chief executive Bruce Lochore said the council's bylaw had ushered in a welcome change to the way it viewed motorhome tourism in Napier but had also resulted in a "few issues" related to non-self-contained vehicles, which it was addressing.
But Thomas Whitehead, owner of Napier's Blue Water Lodge backpacker hostel, said the change would still encourage travellers in non-self-contained vehicles to visit the city and require the council to spend money providing parking and toilet facilities for them.
"So as ratepayers we're supporting an industry that brings no money to us."
Tourist asks campers to show respect
German traveller Anne Gessner said freedom camping is a privilege and it's a shame that a minority abuse it.
"It's like invading someone's home, as a guest in someone's house you wouldn't leave litter so why do it here?"
"It would be such a shame if people couldn't camp here (Marine Parade) anymore. It seems unfair that a few have to ruin it for the many."
Common complaints of campers in the area include hanging washing outside, playing loud music and littering.
Ms Gessner was spending her second night at the carpark north of Ocean Spa and was impressed with the behaviour she had seen. The tourist chanced upon the spot through the popular travel app wikicamps. It had received positive reviews from users.
Ms Gessner said freedom camping was a great way to save money while travelling and she was always very tidy and respectful of campsites. "I'll be sure to leave it exactly as I arrived. There are plenty of bins provided so I certainly won't litter and don't see why others do."
She had a stern message for fellow campers. "Just behave yourself, think about what is right and show respect."
