A motel owner in Tauranga says life in red is like being in a "pseudo lockdown".
Others in the Bay of Plenty tourism sector say new Government support for struggling businesses won't go far enough, and it needs an isolation-free border reopening.
On Monday the Government announced an assistance package offering a payment of $4000, plus $400 per staff member up to 50 workers, for businesses that can show a 40 per cent revenue decline for seven consecutive days in the six weeks before phase 2 started.
The support is capped at $24,000.
Paul and Lyn Marston, who own Tauranga Tasting Tours and Charters, said the package won't be enough.
Lyn said it "will be available to very few".
She said most businesses were "doing it hard before the red setting", so requiring such a recent 40 per cent decline in revenue would cut many out.
Paul said people were being more cautious about going out.
"People are just running scared. You don't know from day-to-day what to expect. It's a guessing game.
"All we can do is plan tours and hope like hell that people come on them.
"We're struggling through - just."
Owner of Cameron Rd's Academy Motor Inn, Simon Driessens, said his business was on track for its worst February in six years, including 2020 when part of February was spent in lockdown.
He said people were very afraid of the virus and worried about getting stuck away from home.
His motel was completely empty last Friday, for the first time in his memory, and it felt to him like a "pseudo lockdown".
"It's worse than I thought it would be."
He said he saw the difficulties continuing for the rest of the year in light of cancelled events and people being afraid of the virus.
He said the package would help, but wouldn't be enough without a wage subsidy for his employees.
He said people should support local businesses, or "they might not be there in six weeks when you want them to be".
Huntaway Farms Horse Trekking owner Steve Oxford, based in Ngawaro, said his businesses was "eerily quiet".
"It's like the first lockdown.
"The last week or two, and especially the last week, Omicron's just put the brakes on everything."
Oxford had to lay off his only employee after the first wage subsidy ran out.
He said the new support package would help.
"It's great that the Government have done that. I don't know how far it'll go for the big fellas, but it all helps at the end of the day.
"But money just keeps you open. It doesn't get you any bums on seats.
"We need to start opening some doors, I think. We'll become a ghost town."
Mount Maunganui-based Zealandier Tours owner Jan Davies said her business was down at least 80 per cent.
She hoped it would be eligible for the Government's package, as it would be "a really big help".
She said many of her customers were elderly and "nervous of catching the virus".
"The place is dead. It's incredible what we're seeing already."
She said a lot of tourism businesses were kept alive by the first wage subsidy, but many had to lay off staff.
"This has been a nightmare to manage. Tourism is the worst industry to be in [during Covid-19]. No one knew it was going to last this long.
"We're all thinking, 'can we do this for another year?' A lot [of businesses] are shutting up."
Lindsay Hunt, owner of Bay-wide Ezyfishing Charters, said his business was down 80 per cent last month in comparison to pre-Covid years.
He said the rules in the red Covid management setting were less of a problem than "people's perception of the rules".
"I've got to explain to most of the people what's required of them. They're not understanding what the rules are."
He said the funding package would "really help a lot".
"Anything's going to be a big help."
He said he was happy with the Government's response to Covid-19 and New Zealand's comparably low fatality rate.
"If it's not broken, don't fix it."
Tauranga MP Simon Bridges said tourism, hospitality and retail businesses in Tauranga were "really suffering at the moment".
"My fear is a lot will go to the wall, and have to shut up permanently, if things don't change over the next two to three months.
"The Government needs to get a lot clearer on when they're going to drop the restrictions and make RATs accessible to everyone so that these struggling businesses don't fall at the last Covid hurdles."
Tourism Industry Aotearoa said only reopening the borders without isolation would save the tourism sector.
Communications manager Ann-Marie Johnson said the industry was seeing similar numbers to those under national lockdowns.
She said the support payment will provide businesses with "some oxygen to help them survive over the next six weeks or so, but it will have little benefit for larger businesses with high overheads".
"We are hearing harrowing stories every day from our members across all parts of the tourism system. Having proven their resilience by surviving two years of the pandemic, some are now facing ruin.
"We have grave concerns for their mental wellbeing."
Tourism Bay of Plenty general manager Oscar Nathan said the sector had been counting on a summer free from Covid-19 interruptions after "doing it tough for nearly two years".
He said the support package was "welcome news" and would "hopefully help local operators who have recently been suffering a downturn in patronage".
But, he said it would not be enough without open borders.
"We really need the Government to remove the self-isolation requirements international visitors are being advised they will have to follow when our border starts opening up to the world in July.
"Many may well start crossing New Zealand off their list as they look for easier holiday options elsewhere."
Covid-19 Response Minister Chris Hipkins said last week that settings for self-isolation reflect public health advice that arrivals have a similar Covid-19 risk profile to close contacts of cases in the community and would follow similar protocols to those in phase 2 of the Omicron response.
Tourism Minister Stuart Nash said NZ was in high demand.
He said it had been made clear that the self-isolation times were likely to reduce and could be lower by the time the border was fully reopened to international visitors.