Maureen Lomas and her husband have been on holiday at the resort since Tuesday with their grandchildren.
She and her husband paid £2,200 for the week but said they had been told to order a takeaway from outside the resort after complaining about being turned away from a restaurant.
"Anyone who has not paid for meals in their holiday package are being turned away at their restaurants," said Maureen.
"All they said was they were busy with ones that have pre-booked., but when we waited I took photos of all the empty tables.
"Eventually we were given a booking at the Beachcomber restaurant but were told we may have to wait up to an hour for the food. They said they will try to book us in for the weekend too.
"We arrived 5.30pm, queued for half an hour to order and food arrived at 7pm. Not good but they had warned us we could be waiting that long..
"People were being turned away at the door and asked to come back later.
"We walked to other restaurants and met up with large groups of other people who had been turned away."
Mrs Lomas said they had been holidaying at Butlin's for years and have never been so disappointed.
"Tonight (Saturday) there are again queues outside Fire House restaurant and we were told the Diner has been closed which won't help.
"My husband asked people in the queue if they had paid for a meal plan and they said 'not' and were amazed when he told them that they would be turned away.
"We are not queuing and are going to Pizza Hut in Skegness instead."
The family are due to leave the resort on Monday,
"We had some issues with accommodation too which were rectified quickly and have been offered a £375 refund but I said we would expect half of what we paid," said Mrs Lomas.
" I was told we I should have reported problems in chalet straight away as they did deal with them quickly.
"I said that its their responsibility to make sure all was okay."
A Butlin’s spokesperson: “We’re sorry some guests are having to queue for certain restaurants on resort.
"There's a variety of restaurants and takeaway options for guests to choose from and we're working hard to seat as many guests as possible during busy times.”