The Wanaka Yacht Club holds a twilight race series each Thursday during summer, but last night's racing was understood to have been cancelled because of choppy lake conditions.
It is understood some people ignored the cancellation and ventured out.
Wanaka Yacht Club commodore Geoff Dickey said members were still getting their heads around what happened and a meeting would be held this weekend.
"All the yacht club members are devastated,'' he said.
Wanaka Coastguard president Jim Talboys said Mr Hawke was "very well known'' in the area.
"It's a blow to the community, it really is _ he was a very well known man here,'' he said.
"Someone described him to me this morning (as) the yacht club before the yacht club was built.''
The friend who had been on the yacht with Mr Hawke was under a lot of stress and police were supporting him.
"He saw him go down right in front of his eyes.''
A police spokesman last night said Mr Hawke was wearing a lifejacket but it was not inflated.
Police, Coastguard, land search and rescue volunteers and yacht club members combed the waters of Roys Bay until nightfall to try to find the body.
Family and friends searched the shore this morning while three Coastguard boats searched the water.
Mr Talboys said the police dive squad was due to arrive from Wellington and would be deployed late this afternoon if the weather allowed.
"Everything's been done on the water that's possible because he's not on the surface,'' he said.
"Then we'll have to let nature take its course. We are looking for a recovery.''
Teams were searching a relatively small search area, about 300 metres by 150m.
Strong, cold westerly winds today were making the water choppy but were not hampering search efforts.
"It's certainly not as windy as it was prior to the accident. We had a very strong wind and a rough sea an hour before the accident yesterday.''
