Latest figures show 72,000 tourism workers lost their jobs in the first year of the pandemic.
To the end of March this year 146,295 people were employed in the sector — a decrease of 33.1 per cent (72,285 people) from the previous year.
With borders closing to international visitors from the end of March 2020, holiday arrivals fell by 1.8 million — 99.9 per cent.
Total tourism expenditure was $26.1 billion, a decrease of 37.3 per cent ($15.6b) from the previous year.
International tourism expenditure decreased 91.5 per cent ($16.2b) to $1.5b.
The Stats NZ satellite account data shows a $1.5b GST hit for the Government. This was down 37.7 per cent on the previous year.
Tourism Industry Aotearoa chief executive Chris Roberts said the job losses were equivalent to almost the entire population of Palmerston North.
This includes 6738 or 25 per cent of tourism "working proprietors" — those owner-operators who are the backbone of the visitor industry.
"This is the first time we have been able to accurately measure the impact of Covid-19 on our industry. While the numbers come as little surprise, they reinforce the catastrophic impact on people's lives and livelihoods," he said.
The one bright spot in the data is a small increase in domestic tourism spending and operators were incredibly grateful to New Zealanders for still supporting them.
Domestic tourism spending grew by 2.6 per cent compared to before the pandemic, but this did little to offset a 91.5 per cent plunge in international visitor spend to just $1.5b, compared to the pre-pandemic annual spend of $17.5b.
"It's worth noting that we still had a few international visitors and students in New Zealand during the early months of the pandemic, so it's likely these figures have dropped even further this year."
Total tourism expenditure (international and domestic) for the year to March 2021 was $26.1b, down 37.3 per cent on the previous year.
"Tourism was the first industry to be affected by the pandemic and will be the last to recover. The Government has signalled there will be a staged approach to the return of international arrivals from May 2022, but it is possible it will be summer 2022-23 before there is any significant inflow of visitors. The proposed seven-day self-isolation requirement will put off most travellers," Roberts said.
Kiwi holidaymakers had provided the lifeblood for many tourism businesses in the past two years.
"Tourism operators will be welcoming Kiwis with open arms this summer but are desperately keen to welcome back fully vaccinated high-value international visitors as soon as they can."
The Tourism Export Council of NZ says it is becoming increasingly alarmed with the Government's dogged stance on not reconsidering the removal of the seven-day self-isolation border setting.
At an industry meeting with tourism leaders on Wednesday, as a follow-up from the Tourism Summit last week, where Tourism Minister Stuart Nash alluded to the border possibly not being reopened for "real visitors" without a requirement of self-isolation until late 2022.
"This would be disastrous for hundreds of businesses," council chief executive Lynda Keene said.
"The risk profile from a fully vaccinated visitor from the UK, US or Australia is surely no different from the risk profile of someone travelling from Wellington to Queenstown or Auckland to Hawke's Bay.
"We just don't understand the logic of some of the Government's decisions. The industry is in a state of desperation learning there may be a reality that international visitors won't return until spring or late 2022. For a business that has been hanging on by a thread, this news has broken them mentally and financially."
The industry was mindful that safety for all New Zealanders was a priority, which tourism businesses fully support.
"What we can't work out is the persistent hermit kingdom mentality when the risk profile of those coming back from overseas into MIQ is very low now compared to community transmission, Australians having a higher fully vaccination rate than NZ, and the country is almost 90 per cent fully vaccinated, why the Government is so risk adverse."