Tourists were rescued from the Milford Road yesterday with little more than the clothes they were wearing, after significant flooding and slips caused widespread damage to the highway and inundated visitor facilities at both Milford and Gunn's Camp.

A State of Emergency, declared at 1.40pm yesterday, remains in place in Fiordland as the rain continues to pelt down and streams and rivers continue to rise, causing flooding, landslides and washouts right across Southland. The Milford Road has been significantly damaged and the visitor terminal at Milford Sound flooded.

Some 68 people were evacuated on Monday from various points along the Milford and Hollyford roads and, plans to airlift 195 tourists from Milford Sound this afternoon have been put on hold until Wednesday, due to weather conditions.. A total of 382 staff and tourists have been stranded there but have food and shelter, spending the night either on tour boats or at Mitre Peak Lodge.

The evacuation of approximately 100 people on walking tracks around the Fiordland area got underway this morning and is almost complete.

Thirty-one people from the Howden Hut on the Routeburn Track are safe after a landslide hit the hut at 1.30am on Tuesday morning. Two people suffered minor injuries, which were treated by a doctor on site. 

Southland District Mayor Gary Tong, who previously lived and worked in the Fiordland area for many years and has been a member of both the police and search and rescue team, said he had never seen a weather event such as this with such an impact in such a short space of time.

"This has all happened within hours," he said.

"We're keeping an eye on the rest of Southland as well, of course."

Multiple state highways around the south have been closed due to flooding today, along with several roads and streets in the Gore and Southland districts.

The rising Cleddau River and high tides combined to cause flooding at the Milford Sound visitor terminal. Emergency Management Southland confirmed the wastewater system at Milford had also been compromised and while it had yet to be determined whether it had got into the flooded terminal building, all floodwater there was being treated as contaminated. 

The Milford Sound visitor terminal flooded yesterday. The village's wastewater system has also been compromised and, although the extent has not yet been determined, all water in the area should be considered contaminated. PHOTO: Emergency Management Southland.

Meanwhile, aerial footage by the New Zealand Transport Agency reveals many kilometres of damage to State Highway 94.

Just one of many sections of the Milford Road that have been severely damaged by flooding and landslides. PHOTO: NZTA

All the time the rain continued to bucket down. Throughout the Southland region, heavy rain was expected to cause streams and rivers to rise rapidly with more surface flooding and slips possible, leading to potentially hazardous driving conditions.

Several tourists found themselves trapped between slips and floods on Monday. Those camping at Gunn's Camp in the Hollyford Valley were woken by managers shortly after 7am and urged make their way back to Te Anau, as the rapidly-rising river began to engulf the camp.

Canadians Cari McSorley and Paul Harding said they could barely believe their eyes as the river rose by metres within the space of 15 to 20 minutes.

"It was crazy how fast it went up," Cari said.

They were on the road by 7.45am and managed to negotiate washouts but didn't even make it to the main road before their path was blocked by a large slip. They managed to walk to the highway where it quickly became clear there was no way vehicles would be able to pass that road in either direction. They returned to their vehicle but by that stage it was clear they could not drive back to the camp either. At the Lake Marian Track car park they met with others in the same predicament. The couple and two others volunteered to walk back to Gunn's Camp to raise the alarm that none of those who had left that morning had made it out.

In one place they had to cross floodwaters that were waist-deep and fast-moving, with rocks that cut their legs.

"It was just do-able. Any higher and you wouldn't have made it," Paul said.

Canadian tourist Cari McSorley next to a damaged section of road.

Americans Lisa Pearson and Kyleen Luhrs were less fortunate. They had also left Gunn's Camp but about 5km down the road their campervan got caught in the rising floodwater and started filling up. They pulled some essentials together in a backpack and managed to get out and walk back to the amp where they said they were fed, given dry clothes and looked after until the helicopter arrived later in the day.

"We're just glad we're safe. It was kinda scary there for a bit," Lisa said.

Australians Felix Kraus and Kathleen McGrath had left Te Anau at 5.30am that morning for an early morning kayak tour on the fiord. They negotiated quite a lot of water on the way but by the time they got to The Divide a slip prevented them going any further. When they turned around and tried to head back they found their path was now blocked in that direction also. They returned to the car park at The Divide and were prepared to wait it out, having plenty of camping supplies to see them through. However, an hour later someone turned up who was carrying a satellite phone and was able to alert rescuers to their predicament.

Last night another large slip came down by Gunn's Camp and the managers, who had previously opted to stay and keep an eye on things, were airlifted out today.

Photos of Gunn's Camp, taken yesterday by managers Alan and Sandra Johnston. A slip has since also come down near the camp.

All up 68 people stranded in walking huts and on the road on the Te Anau side of the Homer Tunnel were airlifted out on Monday and taken to a community welfare centre set up at the Fiordland events centre. Food, accommodation and clothing were provided for those who needed it.

Deputy Mayor Ebel Kremer, of Te Anau, who was coordinating efforts at the welfare centre, said everyone was being processed there to ensure all were accounted for.

While it was too early to get a complete assessment of damage, the NZTA confirmed the road would remain closed all week and was unlikely to be open to the Divide until Thursday, but Mr Kremer feared it could be up to two weeks.

The closure of the Milford Road is a double whammy for the southern tourism industry already hit by the fallout from the novel coronavirus outbreak. On Sunday night, the New Zealand Government banned all travellers who leave or transit through mainland China for a period of 14 days. Air New Zealand also cancelled all flights from China until March 29.

Owner of the Anchorage Motel in Te Anau and New Zealand Hospitality Association National Board Member Nigel Humphries said the events couldn't have happened at a worse time.

He said February was peak tourism month for the region and that losing both tourists from China as well as access to Milford Road was causing "big concerns" for operators.

"I think you'll find the impact on the whole tourism sector is really hitting home now because of lots of tour cancellations. Every accommodation provider is exposed to the Chinese market regardless really. I've got no Chinese names now booked for the rest of the month. February three years ago they were a third of my business."

He believed Milford Road being closed would have a far bigger impact than the lack of Chinese tourists.

"The road being out of action at peak time, we've got a lot of guests that are going to cancel."

He said hotels and tour operators in the region were being encouraged to provide leniency to people who had to accept cancellations due to the unusual circumstances.

Destination Fiordland manager Madeleine Peacock said they had been putting out updates through to their members and were available to support any operators who needed assistance during the events.

She said while the events weren't unprecedented, it was unusual for them to happen at the same time and also added that the recent fire in the Homer Tunnel had added to a couple of "full on weeks" in the region.

"It's a risk operators have in terms of operating in the area, and it will be built into management plans across businesses and operators will be responding according to those plans they have in place and working together as well. Particularly the operators in Milford Sound."

She said while they were hoping the coronavirus situation would be contained, she appreciated the complexity of the situation on both a national and international level and understood why the decision to close off the country to travellers from China had been made.

Despite the immediate concerns around tourism in the area, Mr Humphries said it wasn't all doom and gloom.

He said they were still currently busy and that it wasn't yet a "100 write-off."

"We've still got a lot of business. It'll be down a little bit but it's just a little blip. It happens unfortunately. We're subject to mother nature and other things."

"What we might find on the positive side is we have a big upsurge in visitors coming in the next holiday period when we've got measures in place to deal with the virus... the displaced Chinese, a lot of them still want to come to New Zealand."