Spending and foot traffic in Auckland CBD is down 20 per cent and businesses are bracing for a further decline as more people return to working from home.
New Zealand was moved into the red traffic light Covid setting on Monday and while working from home is not mandated, large employers and their workforces are opting to work remotely as the fear of mass Omicron cases in the community builds.
Just three days into the new setting, foot traffic and trade in the country's most populous city is already petering out.
Olivia Carter, commercial and event manager of Auckland Viaduct restaurant Soul Bar & Bistro, told the Herald there were few people in and around the viaduct area and booking cancellations were coming in thick and fast.
"Even though we're only on Wednesday, it definitely feels like every day is getting a little bit quieter. There's more cancellations coming through and that fear is being swept through people now, and so that of course is very worrying for what that is going to look like in a couple of weeks," Carter said.
"We do have fairly solid bookings, but they are reducing."
Carter said there was little foot traffic in the Viaduct area on Wednesday lunchtime, a bitter pill to swallow for businesses like Soul Bar that employed more than 90 staff.
The middle-to end of January was typically when business for inner-city operators would start to ramp up as office workers returned to work, she said.
"Even now the rules have changed [and lockdown] isn't part of red level, businesses are now used to that. They were encouraging people to come back to work at the start of the year and now from what we've seen and heard from our customers is that they've been told 'collect your stuff from the office and work from home where you can'."
Carter said reducing hours for her workforce was a reality if more office workers opted to return to working from home and booking cancellations continued.
"I'm feeling quite nervous for our business and I'm feeling quite nervous for our staff."
Heart of the City chief executive Viv Beck said businesses were going into the third year of financial strife and impacts as a result of the global coronavirus pandemic.
Beck said the return to the red setting "continued to impact the same people over and over again" and the length of the previous lockdown had been brutal for many.
Just last week, trade and foot traffic in Auckland CBD had begun to tick upwards as more workers returned to eating out and socialising after work, but this had taken a dive after the change in settings, she said.
"We were just noticing a good uptick in workers back last week, which was fantastic for some of the lunch bars, and people were out meeting friends and work mates after work for a drink and dinner, you could see the laneways pretty busy again and of course we go back again."
More than $1 billion has been lost in trade in Auckland CBD since the start of pandemic.
Prior to the fresh move to red, spending was down in excess of 20 per cent over last year, and in excess of 40 per cent down on the start of it in 2020. This is expected to fall further.
Beck said the return to working from home was a serious cause of concern, particularly for the smaller firms that serviced the more than 130,000 inner-city workers.
"There's a lot of anxiety amongst some businesses. They are concerned that if we don't have people working here that it will have a massive impact on them, if we [already] don't have the events and haven't got the tourists."
Marisa Bidois, head of the Restaurant Association, said the move back to red meant "restricted trading" for hospitality operators, and a "mass wave of cancellations" had already happened throughout the industry.
"Without any confirmation of financial support via the wage subsidy or through the resurgence payment, it is really stressing many business owners," Bidois told the Herald.
"We've had quite a few conversations with businesses who want more information about insolvency processes because they want to be prepared for what potentially could be around the corner."
Feedback from Restaurant Association members across the country was that CBDs were quieter than anticipated following the move to the red setting, Bidois said.
Soul Bar's Carter said coming up with operational and contingency plans was problematic as it was dependent on new announcements by the Government.
Her biggest concern for the business was staff retention and health.
"There's a lot of uncertainty, questions about the rules and waiting for the next announcements and changing rules, and then trying to remain a positive leader and keep inspiring and reassuring your team.
"We're hopeful support will come out for the industry. We are trying to give our staff the hours that they need, we're trying to keep employing DJs even though we don't have a dance floor, we're trying to do all of that for our people but the reality is ... lots of people are looking at closing two days a week or closing earlier."