"This only increases the potential for a MIQ breach leading to a community outbreak," he said. "It adds more pressure on the local health system and ultimately means more lockdowns.
"This would be disastrous for Rotorua, and especially Māori who make up 45 per cent of the Rotorua population."
There was a major difference between isolation and quarantine, Waititi said.
There are three facilities in Rotorua and anyone who tests positive in the hotels is moved to an Auckland quarantine facility, he said.
"The addition of a quarantine facility in Rotorua keeps and brings those infectious, to our community," Waititi said.
"This would be disastrous for Rotorua, and especially Māori who make up 45 per cent of the Rotorua population."
The Ministry of Business, Innovation and Employment, which manages MIQ, has been contacted for comment.
A Lakes District Health Board spokesperson said the DHB did not support the idea of more MIQ facilities in Rotorua.
"Any move to establish additional MIQ facilities would require additional staffing and resourcing, which would need careful consideration due to these impacts on current services," they said.
"There has been no confirmation at this stage whether any further MIQ facilities may be established."
Associate deputy secretary of MIQ Andrew Milne told the Herald on Monday it was investigating potential options for new facilities in Rotorua and Christchurch to meet "extremely high demand".
Milne indicated an appetite to consider expansion but stressed the final decision would be made by Cabinet ministers.
"We have identified hotels that could be suitable and we are now engaging with them and with key local stakeholders. Due to commercial sensitivity, we will not be naming the hotels.
"There are a lot of complex issues that need to be considered for operating MIQ facilities, including workforce supply to support our operations, suitability of the hotels and proximity to hospital facilities and appropriate transport hubs," he said.
That is why Rotorua and Christchurch were being investigated.
On August 13, MBIE confirmed it was investigating establishing additional MIQ facilities in a number of locations around New Zealand, including Rotorua.
The Māori Party launched a petition against any more MIQ facilities opening in Rotorua.
At the time, Waititi said it would be inappropriate for Rotorua to be considered after the Lakes District Health Board said another facility would put too much pressure on the health sector.