Tourist numbers plunged 11% in March, with fewer visitors from the country's two biggest markets, Australia and Britain, coming to New Zealand.
The fall is due to the Christchurch earthquake and the Japanese quake and tsunami.
The strong New Zealand dollar is also making people think twice about travelling here.
Tourism New Zealand chief executive Kevin Bowlersays the sector is in for a tough three or four months.
''The sharp downturn is from the earthquake and we're still to see the effects in April and May of the Japan earthquake and tsunami,'' he said.
However, he said a rise in numbers from Malaysia is expected in April and Australian arrivals are expected for the forthcoming ski season.
On an annual basis, the pace of visitor growth slumped from about 2.5% in February, to 0.3% in March.
Visitors from across the Tasman fell 11.3%. Visitor numbers from Japan and South Korea were each down by more 33%.
Visitors from Britain dropped by 25%.
However, Tourism NZ says there was an increase in visitors from China, the United States and Singapore.