Wellington city councillors have canned any prospect of a rates freeze, choosing to investigate two rates increase options instead.

Council officers will now prepare more detailed scenarios of a 4.95 per cent and 2.15 per cent increase for what essentially will be a Covid-19 emergency budget.

That compares to a proposed rates hike of 9.2 per prior to the coronavirus outbreak.

An extraordinary council meeting held via Zoom heard from those in the hospitality sector desperate for help.

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Meanwhile Mayor Andy Foster again felt the weight of the majority of his councillors move against him, this time on a proposal to keep parking free in the CBD until at least June.

Councillor Jenny Condie got a significant amendment across the line, which included the city moving to full parking fees and enforcement two weeks after a return to Covid-19 Alert Level 3.

Condie said free parking was an expensive initiative and scrapping it would save millions of dollars.

It was also agreed up to $1 million of those parking proceeds would be allocated to community grants, along with a further $500,000 from rates.

Councillor Sean Rush said the amendment ensured the most vulnerable were being looked after while providing a robust balance sheet for economic recovery.

"In reality if we want to help the most vulnerable then we have to take money from somewhere. The evidence is that parking fees will not change shopping habits."

Covid19.govt.nz: The Government's official Covid-19 advisory website

A rebate for pavement licence holders for the equivalent of the final quarter of 2019/2020 was also pushed through, in response to pleas from the hospitality sector for more relief.

A recent Restaurant Association survey estimated a fifth of their members were considering closing their businesses for good or believed the pandemic would put them out of business.

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In Wellington that would equate to 374 businesses closing their doors.

Maura Rigby, who is the co-owner of two hospitality establishments in the capital, has garnered more than 2000 signatures for a petition for local government support.

The petition called for emergency off-licenses, as well as fees and property rates relief.

Rigby said immediate measures previously proposed by the council equated to less than $1000 of direct financial relief to licensed hospitality businesses.

"It is not a time to tinker around the edges, the economic impact will be much greater than the reduction of fees and rates relief combined."

Wellington Culinary Events Trust chief executive Sarah Meikle said hospitality was "at the core" of the city's culture and the sector employed more than 20,000 people.

She pointed to Wellington On a Plate playing a role in the recovery from Covid-19 because it was a decentralised model, held across hundreds of small venues, and attracted a strong local audience.

The festival was developed off the back of the Global Financial Crisis to give the sector a boost in the slow winter months.

"It's starting to feel like a very strange familiar time that we find ourselves in now", Meikle said.

Wellington has also built a reputation for its craft beer, and Hospitality New Zealand spokesman Matt McLaughlin warned councillors there was hundreds of thousands of dollars' worth of stock sitting in breweries about to go down the drain.