Half a dozen old holiday cabins at the Glendhu Bay Motor Camp, on the shores of Lake Wanaka, are in line for removal or demolition.
Some of the cabins were used by workers building the Manapouri Power Station, completed in 1971.
The company leasing the Queenstown Lakes District Council-owned motor camp, CCR Ltd, wants to replace the old buildings with modern cabins with decks, car parks and views of the lake and mountains.
They are also proposing additional cabins with ensuites and a new ablutions block - a total of 14 new buildings.
The Wanaka Community Board yesterday recommended to the council CCR Ltd be given affected persons approval for its proposal, which must still go through the resource consent process.
CCR director Rudi Sanders told the board the motor camp had not changed for 60 years and some people believed it should remain unchanged.
However, to be financially viable the motor camp needed to be used all year round, and not just for a few weeks at Christmas.
As one of a small number of remaining lakeside motor camps in the country, it was important for it to remain viable, Mr Sanders said.
''We have to look after it for generations to come.''
Mr Sanders said the cabins were ''old and cold'' with no windows facing the lake.
CCR opened a new 22-bed lodge at the motor camp two weeks ago, and it has been used this week by pupils from the Karitane Primary School.
Board member Ella Lawton noted figures presented to the council showed the four camps operated by CCR, since 2014, contributed $50million per year to the Queenstown and Wanaka economies.
Board member Callum McLeod said he understood rental income to the council from the motor camp had doubled over the last year and described the increased profitability of the facility as a ''win-win''.
