"I don't think you should discount the effect of the air capacity into Queenstown, it plays a big role as it brings in international visitors who expect international standards and will pay international prices - and that's all linked.
"We just have to have a good look at our products and say, 'look the profile of our visitor is moving more upmarket, let's make sure that our products and services are doing the same'. These things don't happen overnight."
Luxury Lodges of New Zealand marketing manager Colleen Ryan said Queenstown had a high-end image.
She said she could not comment on whether Rotorua would ever be able to compete with Queenstown as a luxury destination.
"Amongst our clients Queenstown has a higher image. Queenstown set itself up as a luxury destination. We have many helicopter companies based there, we've got wineries, we've got golf, so activities up and around Queenstown tend to be very high-end. People will take the helicopter into Milford Sound, for example.
"Queenstown has always set itself up as a luxury destination whereas Rotorua didn't, just if you look back over its history, which is much longer than Queenstown's, and was before luxury kind of happened."
However, Tourism New Zealand director of marketing Andrew Fraser said Rotorua was famous for its people and culture, and air connectivity was not a big issue for international travellers who appreciated the convenience Rotorua's airport provided.
At the other end of the market, Destination Rotorua has launched a new promotional video, targeting the youth and backpacker tourism markets.
The video, shot by Rotorua photographer and videographer, Graeme Murray, was first shown at a Trenz after party at Rotorua backpacker destination, Lava Bar on Monday night.
The four-minute video encapsulates what a day in Rotorua would be like for backpackers.
Destination Rotorua trade marketing manager Patrick Dault said the video was a collaboration between Destination Rotorua and an informal youth and backpacker committee.
It will be marketed through trade channels, predominantly in Australia.