The hospitality sector is in shock over surprise rules limiting gatherings to only 10 people and delaying when bars can open when the country moves to level 2 later this week and fears it will have a further negative impact on the economy.

Cafes, bars, gyms, restaurants and cinemas can open from Thursday with no more than 100 people allowed in a venue - but bars have to wait another week.

Prime minister Jacinda Ardern said bars could not be open until May 21 because they posed "the worst risk".

If the primary purpose of the establishment is for dining then they can open this week, but if the primary purpose of the establishment is for drinking then they have to wait.

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"We don't want to be like South Korea only to open our bars to then close them," she said.

Under level 2, cafes, restaurants and eventually bars can operate but must follow strict social distancing rules and ensure contact tracing is in place.

They can only open if customers can be seated at distance from each other and they must be served at the table rather than at a counter.

However, Ardern later clarified that pubs that served food could reopen from Thursday providing they followed the Easter and Anzac trading rules.

Ardern said they had worked with the Hospitality Association around the rules.

Hospitality NZ chief executive Julie White said while going to level 2 was good news for the industry, it still only offered some relief to the sector that had been the most impacted.

White said the association had worked hard lobbying the Government to ensure restaurants and bars could open at all by following the seated, separation and single-server rule.

While most restaurants and bars providing food could open this week providing they could provide even just a bowl of fries, it was mainly the nightclubs and wine bars who would be exempt.

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"For most it is going to mean more costs, having to employ more people and it is going to limit their revenue opportunities. While it is not ideal it is good that we can actually start to reopen."

White said they would be working with Government to get greater flexibility before the Government reviewed it in two weeks. Currently the guidelines were they could only be at the venue for two hours and no more than 100 people were allowed at a venue at one time.

Tourism Industry Aotearoa chief executive Chris Roberts said limiting gatherings to 10 people and delaying the opening of bars had come as a surprise and would both have an "adverse economic impact".

"Many businesses are teetering on the edge and in the current circumstances even a week or two delay will push them over the edge and result in further job losses and business closures.

"It's good news for most, but further disappointment for some."

However businesses that offered venues for hire - including hotels, motels and restaurants - who had been gearing up to host business meetings up to 100 people under level 2 would be negatively impacted since they now appeared to be limited to just 10.

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Domestic tours was usually carried out in smaller groups so the maximum gatherings of 10 would not affect them.

'In general tourism operators are excited they are hosting Kiwis again. They will have customers to come through the door and they look forward to showing them a great time."

Restaurant Association chief executive Marisa Bidois said the industry needed to get back to work, but with a clearer set of guidelines.

She said a number of questions around what was and wasn't allowed remained unanswered.

Lawrenson Group chief executive John Lawrenson, who runs a number of bars and restaurants in Hamilton, including Key Stone, Bar 101, The Bank, House and Furnace, said while a number of his restaurants such as Keystone, House, Funance and The Bank would open on Thursday - night clubs such as The Outback or Hood would not reopen until level 1.

Lawrenson said they would also wait until next Thursday before keeping some of those restaurants open later so people could enjoy cocktails or a few wines later in the evening.

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He said today's announcement did not come as a massive surprise and "seemed logical enough".

Hamilton restaurant and bar owner John Lawrenson will open some of his eateries this week - but he says his clubs will stay closed until level 1. Photo / Christine Cornege
Hamilton restaurant and bar owner John Lawrenson will open some of his eateries this week - but he says his clubs will stay closed until level 1. Photo / Christine Cornege

"For us we were only going to open the eateries anyway. We are not going to be able to open the likes of The Outback until level 1," he said.

"I absolutely do not think (level 2) means you can put 100 people into a nightclub until 3am. I would be very very surprised if that's what they intended and I am certainly not going to be the test case who tries that out."

Destination Rotorua chief executive Michelle Templer said a number of tourist operators would be opening later this week and encouraged people to explore their wider backyards.

"People come from all over the world to experience this special place, and yet we have all of these natural wonders and world-class activities right outside our doors."

Those who did not follow the rules would be closed.

Earlier today Tourism Industry Aotearoa released a survey of the hotel sector showing 55 per cent of firms expected weaker activity for their own business.

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Currently 40 per cent of hotels surveyed were fully closed and the number grew in the regions to 68 per cent.

Most hotels were expecting heavy redundancies when the Government's wage subsidy scheme ends in June. The number of employees is expected to reduce by an average of 56 per cent.

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