Pretty much a mandatory stop for anyone touring around New Zealand’s North Island, Rotorua has several things going for it. For one, it’s built over a geothermal hot spot, which can be witnessed in scenic nature parks and also just around town as you explore. You’ll know you are in town when you smell the sulfur.
Hotels and hostels in Rotorua are generally pretty affordable and good value. The center of town is somewhat dense but there are many places on the edges of town that are fairly cheap and still convenient if you’ve got a car or campervan. Food and drinks are typical in price of the rest of New Zealand, so they shouldn’t bust your budget.
The most expensive things you might do are visiting the thermal parks, which aren’t exactly cheap, or visiting the Maori attractions that are similarly priced. Those on backpacker budgets should enjoy Rotorua without spending a lot, although the thermal parks are probably worth a visit because you won’t see those colors and vents by just walking around town.