Another bar owner said he was looking to offshore recruitment to boost staffing numbers.
Visa delays and staff "poaching'' have been cited as two of the main culprits for the shortages.
Immigration NZ has acknowledged there were more visas needing to be processed, but said that was business as usual for this time of year.
Surreal bar owner Melissa Stadler said after two decades in the business, she was starting to wonder if it was worth the hassle.
"It's the hardest it's ever been. It's actually at crisis point.''
She had to shut the bar for the past two Mondays to give staff a break.
"My chef's been working 80 hours a week. I have to look after them.''
Visa delays have been causing havoc for employers, with some applications taking more than six months to process, she said.
Smiths Craft Beer House general manager Chris Dickson agreed, calling the situation "terrible''.
"It's the worst I've seen it in the nine years I've been here.''
Living costs were a big part of the problem, as was immigration.
Mr Dickson said some of his staff have hired an immigration lawyer to help speed up the visa process. He was using the same lawyer to start offshore recruitment.
Another factor was competition between businesses, with rampant poaching of staff, he said.
"There's no loyalty, it's really tough.''
He was keen for businesses to get together and talk to each other to tackle the problem.
Pub on Wharf and Muskets and Moonshine director Chris Buckley said it was hard to get people who had experience.
"We have to be more adaptable, and train people on the job.''
As of Wednesday, there were 16 Queenstown hospitality businesses advertising for staff on recruitment website Seek.
Clutha-Southland MP Hamish Walker has also waded into the debate, saying he often hears from Queenstowners frustrated with immigration delays.
Immigration New Zealand manager Michael Carley said the number of labour market tested visa approvals increased by 18% between 2016/17 and 2017/18.
"Queenstown visa applications continue to be prioritised, with these applications generally being allocated for processing within three weeks and "decision-ready" applications usually decided within a further 1-2 days.
"Applications which are not decision ready tend to take longer, due to the fact that additional information needs to be requested before these can be finalised.''
For the Queenstown area, about 40% of the applications being received currently were considered to be complete and decision ready.
Immigration NZ was working to improve work visa processing timeframes, he said.
