People are being urged to support Rotorua businesses as some in the hospitality sector grapple with a dramatic drop in trade after the country switched to the red traffic light setting.
One business owner says turnover is down 60 per cent and another says limiting capacity to 100 has halved revenue on busy nights.
Prime Minister Jacinda Ardern moved New Zealand to red at midnight on Sunday after nine Covid-19 cases in Motueka were found to have Omicron.
Yesterday there were 56 suspected or confirmed community cases of the variant - none in Rotorua but two in Tauranga - and the Government announced the next stages of its plan to tackle Omicron's spread.
New Zealand remains in red, the most restrictive traffic light setting of New Zealand's Covid-19 Protection Framework.
In red, face coverings are mandatory when travelling on public transport, in retail, and to an extent, in education. Public facilities and retail outlets are open, with capacity limits.
Cabinet has also decided to update mask mandates for the country as Omicron community cases increase.
Our House Family Restaurant co-owner Tim Smith said sales were down "considerably".
"It's been very quiet since Sunday. We've been monitoring it and we're down around 60 per cent.
"Based on the way things are turning out we've got too many staff.
On the other hand, Smith said it was difficult to recruit for "top-end jobs".
"Everybody around town wants a sous chef. We've been looking for an assistant manager the whole year.
"I support the Government's actions because they're keeping us safe but it's a scary time to be operating," said Smith, husband of Labour MP Tamati Coffey, also a co-owner of the business.
Smith hoped the "high stakes" of operating at red would be "as short as possible".
"I encourage everyone to continue to dine out and support their favourite local. There's no need to cancel bookings or stop doing things that give us pleasure like meeting friends or whānau over kai and a few drinks.
"Hopefully we'll come out the other side."
Smith said he didn't think the tighter mask regulations would affect Our House.
"All of our staff are already wearing the medical grade mask anyway."
Mask changes coming into force at midnight on February 3 include a requirement to wear a mask at businesses that serve food and drink, except when eating and drinking.
People would also be required to wear an actual mask over their nose and mouth rather than, for example, a scarf, bandanna or t-shirt. Workers legally mandated to be vaccinated must wear a medical grade mask.
Zippy's Cafe owner Aman Saini said his business was "definitely feeling" the change to red.
"It's definitely a bit quieter than the normal orange zone.
"We sort of missed quite a bit of the office crowd. They're not coming out but it's all good. It is what it is."
Good Eastern Taphouse co-owner Andy Allan said business was unexpectedly steady but he was mindful of "what's coming up."
"It's just inevitable that [Omicron] is going to hit us. It's going to affect us, our customers and our staff but for now steady as she goes."
Allan said being limited to a capacity of 100 on "big nights" has halved revenue, as Good Eastern has capacity for 200.
"It is what it is. We'll just look after 100 people really, really well.
"I was anticipating panic would set in. But for now, we're okay. We're cautiously optimistic."
Tearrific owner Chris Senerpida said his bubble tea shop and cart hadn't traded since the weekend.
"We haven't really traded in the red setting yet because of the weather but I've been driving around.
"It's quiet in town. I think people are afraid to come out because of Omicron."
Senerpida said he would see how the change to red could affect his business today.
"We're outdoors, not indoors so we have a different setting. If it's indoor it's more risky.
"We were smashing it at the Lakefront over the holidays."
Senerpida said the cancellation of Rotorua's night markets would also have an effect.
"The markets are not going through on the red setting and it is going to hurt businesses who only trade then.
"It will affect us too because we'd just been extending our hours."
Restaurant Association chief executive Marisa Bidois said some business owners were concerned increased regulations may put people off dining out.
However, Bidois said there was general support for mask-wearing.
"Many of our members have said to us that this has in many cases already been happening in their businesses.
"It's important to remember that you do not have to wear masks while you are seated having your meal and enjoying a glass of wine."
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Bidois said the Restaurant Association was encouraging diners to support hospitality by being aware of rule changes and coming prepared.
"What we would like to see is for this to be a shared responsibility between customers and businesses to lighten the impact on workers.
Bidois said the majority comply with the rules but there have been a few cases where front line staff have had to deal with unreasonable and aggressive customers.
"Communication is key. We encourage business owners to educate customers before they arrive for example through their website and social channels and also include plenty of signage inside the establishment. The Restaurant Association has free resources that businesses can access from our site."
A three-stage plan for dealing with growing Omicron case numbers was revealed yesterday by Associate Minister of Health Dr Ayesha Verrall.
Steps will include:
• Reducing isolation period for cases and close contacts at phase 2 and 3 to 10 and seven days;
• The definition of a close contact required to isolate will change to "household or household-like contacts" at phase 3;
• An increased use of rapid antigen tests with a "test to return" policy put in place for health and critical workforces;
• Greater use of technology, including text notifications for cases and close contacts and automated contact identification.
The Government has no concerns about the development on state land in Ngongotahā.