Many Southland attractions are free but do not line the pockets of the travel experts who sell the area, the national carrier says.
Air New Zealand regional affairs manager Ian Collier said free attractions could limit travel agents' marketing of Southland - the agents do not earn commissions from the sale of free activities.
The development of "commissionable" Southland products would be advantageous in the long-run, Collier said.
"There is no question that Southland needs to work even harder to compete against other regions that are already well established as popular tourist destinations such as Queenstown."
Collier said quality accommodation was critically important for Southland to attract "high-value tourists", who would deliberately seek premium experiences.
Hawkins director Jim Boult, a past director of Tourism New Zealand, said up-market tourism packages may not be the answer for Southland tourism.
In May Boult will speak in Invercargill on tourism growth.
The region should aspire to attract Chinese visitors, Boult said. Chinese visitors to New Zealand spent up to $3,500 per head, which put them high in the pecking order.
"Southland needs to make sure that it does what it needs to do to take advantage of that," Boult said.
"While a bush walk may be free there's tours or retail offerings or manned talks that means Southland gets some money out of them."
At a meeting of the Invercargill City Council's finance and policy committee on Wednesday, Cr Alan Dennis said he had a meeting with Air New Zealand chief executive Christopher Luxon.
The meeting was held at the Invercargill Licensing Trust the day after the opening of the new Invercargill Airport terminal.
"The message I got from him was that we don't really market the south well at all, in fact not at all," Dennis said.
"We need to sharpen our act up very quickly, and get a higher profile."
The discussion with Air New Zealand found tourists were not as interested in bungy jumps and tours, but in seeing cows being milked, Dennis said.
"[Luxon] said 'You put on the volume, and we will put on the planes'."
Luxon did not directly respond to Fairfax questions, which were answered by Collier.
Speaking on Thursday, Dennis said the ILT could work on marketing packages for up-market or Asian guests.
"We need to match the supply of accommodation with events and make a steady improvement in the tourism market," Dennis said.
Air New Zealand saw Southland tourism as a "catch 22", Dennis said.
"If we improve what people experience, we can up the amount of flights [to the region]."
Invercargill Mayor Tim Shadbolt said visitors to Southland "make less noise" about their travels. This was because the tourist attractions in the south were generally more nature based, rather than being commercial bungy jump-type attractions.
He believed Southland was doing all it could to promote itself.
"We may not be the bungy-jumping centre of the world but we've got a good centre for eco-tourism and bird watching."
He said the type of customer to Southland attractions might not spend as much.
"If you're a bird-watcher and just want to stand in the bush with binoculars and look at birds, it's very hard to make money out of that and use the money for infrastructure."
Air New Zealand works with Venture Southland, Invercargill Airport and the city council regarding travel to Southland.
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