Rotorua Chamber of Commerce chief executive Bryce Heard. Photo / File
The Government's $12.1 billion support package in response to the economic fallout from Covid-19 will not be enough to save some Rotorua businesses from closure, a business leader warns.
Travel restrictions announced last week in response to the pandemic have already had a big impact on the city's economy, which is heavily reliant on tourism and international visitors.
The retail sector is suffering a slump, hospitality is experiencing 10 times more cancellations than normal and one local accommodation providers says its occupancy rate has dropped by 80 per cent since the restrictions started.
However, some tourism operators are confident they can weather the storm.
Finance Minister Grant Robertson yesterday announced full-time workers eligible for the economic response package would receive $585 per week from the Government, paid in a lump sum of just over $7000 covering a 12-week period.
Big-ticket items of the package include $5.1 billion for the wage subsidy, $2.8b for benefit increases and the bolstered Winter Energy Payment and a further $2.8b for tax changes to free up cash flow.
Rotorua Chamber of Commerce chief executive Bryce Heard said the Government deserved credit for taking action.
Heard said the travel ban was well-intentioned but it had an "extremely severe" impact on tourism-based businesses.
"The business measures are well-intentioned, helpful and constructive, but are nowhere near far enough to save some businesses from closure," he said.
"Particularly in Rotorua where we are exposed to tourism."
Destination Rotorua chief executive Michelle Templer was pleased to see the Government focused on increasing cash flow and confidence.
"We hope this will have an immediate impact on many of the local businesses that have been affected by the current operating environment...
"These are unprecedented times and our thoughts are with local businesses as we navigate these challenges together as a community."
Hospitality New Zealand accommodation sector Bay of Plenty chairman and motel owner Tony Bullot said there had been 10 times more cancellations than normal which would impact all staff.
"Less demand means less staff. Tourism, international and corporate, has gone from busy to near zero."
Bullot said the Government's package would help companies keep some staff but would not help bring in business.
"There are still hard times ahead for the tourism industry. We are doing our best, but it's too hard to say what will happen in the future."
Rotorua Downtown Backpackers owner Febin Abraham said he had a stream of cancellations in the past week.
"At the moment we already have a loss of about $14,000 to $15,000 and we don't know what it is going to be in the future.
"For the next five to six days we have 80 per cent less occupancy."
He said what made it harder was turning away potential business due to the fact the backpackers could not self-isolate on site. However, the safety of his staff, guests and the community was paramount.
Abraham said his business would not be able to operate if staff had to self-isolate.
Paradise Valley Springs owner Stuart Hamlett said the business' coronavirus-related cancellations "only just started in the past week".
"We've got a good domestic market ... but we are watching it [the Covid-19 situation] to see what happens. For example, on Saturday we had a really busy day. So people are still coming to the park."
He said: "at this stage, the business has no intention of cutting back staff numbers".
"We would keep our staff on as long as we absolutely could. We want to look after them and we feel a duty to do that too."
Hamlett was confident "whatever happens we [Paradise Valley Springs] are going to be okay because of the situation we have personally".
He was "really very pleased" for businesses most in need of the Government's support packages.
"There are going to be some businesses in need out there absolutely in need. Some businesses are going to suffer really, really badly from this and some not as badly."
Buried Village of Te Wairoa manager Amanda McGrath said so far the business was "okay".
"We haven't experienced a great drop off as yet. After the travel restrictions came in we have definitely seen a few fewer people. We've had a few cancellations, nothing too extreme, but you get the sense that might be coming."
She said typically 40 per cent of Buried Village's visitors were domestic and the rest were from overseas.
"We get a lot of European visitors - French and German visitors and others from the United Kingdom. As well as the United States and Australia, of course."
McGrath said the Buried Village would be increasing marketing to domestic visitors in the short-term and working with Destination Rotorua on its response to the Covid-19 challenges.
Her initial thoughts of the Government's newly-announced funding package were that it included "some really good things".
"They've really tried to cover all of their bases to make sure that as a country we come out of this as best we can."
Retail NZ chief executive Greg Harford said he had heard large parts of the retail sector across the country had been severely impacted by the Covid-19 crisis - and the Bay was no exception.
"There has been a significant slump in discretionary spending in retail, both in-store and online.
"There are real and deep impacts on many Bay retailers, and a number of firms are looking to cut staff hours and potentially lay people off. Laying people off is always a last resort, but is likely if the situation does not improve."
However, Harford said at this stage there was no reason to avoid the shops.
"By continuing to shop, customers can help support local businesses through these difficult times.
"For those self-isolating, many local firms in the Bay have online shopping options, which means customers can buy the goods they need without leaving home."
Craigs Investment Partners head of private wealth research, Mark Lister said the support package focussed on keeping people in jobs, he said.
"Will it be enough to keep us out of recession? Probably not. Will it be enough to save every single job that could be lost and every business that might fail? Probably not.
"But it has definitely softened the blow."
The Government has committed funding to the sector in an effort to support future plans.