A Tauranga business owner says the Covid-19 red traffic light setting will "haemorrhage" the Bay of Plenty economy.
Yesterday morning, Prime Minister Jacinda Ardern announced the move to the red traffic light setting.
She expected the country to stay at red for "some weeks".
Nine virus cases in Motueka were confirmed to have the Omicron variant, meaning it's circulating in Auckland and possibly in the Nelson area, Ardern said.
It means the One Love Festival cannot operate as planned next weekend. The organisers said on Facebook it would make an announcement on Wednesday.
Waimarino Adventure Park owner Blair Anderson said he was concerned for the overall health of the region's economy.
"It is going to haemorrhage heavily.
"Not just our business, but all the people who gain from our businesses being in operation...they're all going to be feeling a loss.
"I kind of fear for this region, but we will survive. Tauranga always survives."
Tauranga Chamber of Commerce chief executive Matt Cowley said the region should be prepared to remain at red for a couple of months.
"This is the time of year when local hospitality and tourism make their money to get through the tough winter months.
"It was a tough winter already, and it's been a few tough summers. It's just a real bugger of timing, right during the busy events period."
He said some businesses would be having to look at their cash reserves and decide if they can make it long-term.
"Some people will be having to make some difficult calls."
He said most businesses wouldn't be affected too much, but it would be "catastrophic" for businesses already struggling.
Miss Gee's bar owner Ashleigh Gee said the move meant 60 per cent of her business is now closed. Whereas she would normally have over 160 guests, now she's capped at 100 seated guests.
"It's a bit of a worry, and they didn't give a timeline for how long it's gonna be either.
"It's not a lockdown, and people can still be open, which is awesome."
Gee was working long hours to "try and keep the doors open so I can pay my staff".
She thought the government needed to provide a further wage subsidy.
"After having a summer that's probably down anyway, it's hard to claw back all this cash.
"[For] businesses like mine...Red is gonna hit hard."
Tauranga City Council's health and safety manager Angelique Fraser said its vaccine pass requirements for its facilities put them in a strong position to manage the move to red.
It would be investigating what the move to red might mean for their services in the next few days and said will keep the public informed of any changes.
The Western Bay of Plenty District Council confirmed on Facebook that vaccine passes will be required to access its venues at red.
Bay of Plenty District Health Board and Tauranga MP Simon Bridges were approached for comment.
Meanwhile, National Party leader Chris Luxon says rest homes, retirement villages and at-risk communities must be flooded with boosters if New Zealand is to withstand Omicron.
Luxon said rapid antigen tests (RATs) were needed urgently, and the country currently had less than one such testing kit per person in New Zealand.
He said people had been talking about RATs for nine months or more but no real progress had been made on distributing the kits.
He said local businesses had been prevented from easily accessing and using the rapid tests.
Luxon said the country was not in a great position to face Omicron, but it was important now to protect the most vulnerable people.
He said scenarios specific to how Omicron might impact workplaces needed to be considered, an example being how a transport business would function if all its truck drivers contracted the virus.
The Government will be taking a three-stage approach to the point where New Zealand sees 1000 cases a day.
Stage one will be the familiar stamp it out approach, with contact tracing and testing, including rapid antigen tests. Stage two will be a transition stage. The third stage will see changes to contact tracing, and further details on the three stages will be released at a later date, Ardern said.
Given New Zealand's low number of Delta cases, we have the capacity in our system to slow down the virus, Ardern said.
"The difference to previous outbreaks is we are now well vaccinated and well prepared."
The decision to move to red has hinged on the results of genome sequencing for several Covid cases with no clear link to the border.
Director-general of health Ashley Bloomfield said yesterday "we don't yet know the source of these community cases".
The group from Nelson attended a wedding in Auckland on January 13, as well as a funeral, an amusement park and the Sky Tower.
They flew back to Nelson on January 16, on a flight shared by an Air NZ crew member who has also tested positive with Omicron. He then worked on a further four flights, which are all now locations of interest. One-hundred-and-fifty people on those flights have been contacted and those efforts continued this morning.
Health officials are working to understand how exactly the nine Motueka cases became infected. The level of community transmission from the group is expected to be high, Bloomfield said.
Red is the most restrictive traffic light setting but domestic travel can continue.
While lockdowns would not be widespread, there could be lockdowns localised to a workplace or school, for example, depending on what was happening in the outbreak.
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.
With a vaccine pass, many businesses and events can have a maximum of 100 people, including hospitality, gyms, weddings and tangihanga. Without passes, hospitality services must remain contactless and the aforementioned gatherings are limited to 25 people.
Education centres stay open but with extra health measures including year four and up will be required to wear masks.
Tertiary students must study remotely if they don't have a vaccine pass but schools will open as planned, Ardern said.
Gyms and close contact businesses such as hairdressers and beauty salons can open in red as long as public health measures are in place.
The Government was not considering the closure of hospitality but they would continue to review the situation, Ardern said.