Covid 19 coronavirus: Bar owner says restrictions will lead to 'massive carnage'

From New Zealand's first Covid-19 case on February 28 2020 to entering another alert level 3 lockdown on February 28 2021 - here's a timeline of the milestones and setbacks we've all endured. Video / NZ Herald

Rotorua bar owners are losing thousands of dollars each week and stand to lose even more following the latest change in Covid-19 alert levels.

It comes as an economist says the wider Bay of Plenty region could lose upwards of $6 million this week as a result of the restrictions.

Rotorua moved to alert level 2 on Sunday morning along with the rest of New Zealand, after Auckland moved to level 3.

Prime Minister Jacinda Ardern said the heightened restrictions would take place for at least the next week.

Hospitality NZ Rotorua branch president and owner of Hennessy's Irish Bar, Reg Hennessy, said some bar owners were finding it especially tough.

"There are bars that are down $3,000-plus a week on what they would have been doing in normal times - not last week but before the virus," he said.

Hospitality NZ Rotorua branch president and owner of Hennessy's Irish Bar Reg Hennessy. Photo / Andrew Warner

"They're yo-yoing in and out of lockdown on top of that. How long they can live in that sort of space is anyone's guess.

"It puts huge mental pressure on people in our industry."

Hennessy said while Rotorua was an international tourist town without any international tourists, most domestic tourists were from Auckland, many of whom felt they could not leave the city.

"On top of that is the natural fear factor a lot of people have so they stop going out," he said.

"It's all very well to be told let's be kind and we can get through this together but the day is fast coming where we're going to see some massive carnage from all this.

"A lot of people have held on, a lot of people have invested money back in, remortgaged their houses, to keep their businesses flowing. It's going to be quite sad."

The new restrictions come a fortnight after the same alert levels were introduced for three days after an outbreak in Papatoetoe, South Auckland.

Health authorities have revealed the latest family with Covid-19 is directly linked to the Papatoetoe outbreak after they met with another household during the three-day lockdown during alert level 3.

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Infometrics senior economist Brad Olsen said spending in the Bay of Plenty region dipped just under $6m in the week of the three-day lockdown.

"For the week ending February 21, spending activity in the Bay of Plenty region was down 7.4 per cent," he said.

Infometrics senior economist Brad Olsen. Photo / Tania Whyte

The cancellation or postponement of event-based activities like the sold-out international cricket doubleheader at the Bay Oval would be a key factor in the economic impact of the latest restrictions, Olsen said.

Ten thousand tickets had sold for the matches between the Black Caps and Australia, and the White Ferns and England, the first sell-out ever at the Oval.

No more than 100 people are allowed at gatherings and events at level 2, and people should keep a two-metre distance from others in public.

The economy in the Bay of Plenty region was bouncing back well in some areas, Olsen said.

Rotorua was "still in a difficult position" while the situation in Tauranga and Whakatāne had been improving.

"If we look across the regions we can see Bay of Plenty spending was down but nowhere near as hard hit as other areas," Olsen said of the week ending February 21.

"It was the seventh hardest-hit region out of 16, coming through the middle of the park in the spending dip."

Auckland is set to face the biggest brunt of the restrictions, with Olsen saying estimates see the City of Sails losing upwards of $39m each day.

Kiwibank chief economist Jarrod Kerr said Auckland was the heart of New Zealand's economy, boasting 40 per cent of its entire economic output.

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Locking down the city would have a flow-on effect on regions throughout the country, especially those within close proximity.

"The biggest issue the Bay of Plenty and surrounding regions to Auckland have is cancellations of Aucklanders going into the regions," Kerr said.

"There's plenty of business and personal activity that takes place that is now being postponed or cancelled."

Kiwibank chief economist Jarrod Kerr. Photo / Supplied

He thinks there's light at the end of the tunnel with Covid-19 vaccinations to be distributed nationwide within the next year.

"It's uncertain in the near term, and we're still dealing with the pain, but in a year's time I hope we'll wake up in a much better situation."

Rotorua Chamber of Commerce chief executive Bryce Heard agreed with Kerr.

"We're well ahead of where we thought we were going to be a year ago," he said.

"I think the Government and the council are doing the right things here by taking on projects and getting them done to keep the economy percolating.

"We don't want to go into our shell and batten up the hatches."

And while those in the local tourism, hospitality, and retail sectors had struggled, the primary sector had been doing well recently, Heard said.