Rotorua businesses that rely on tourists are suffering "a slow death" as the city's largest domestic market stays locked down another week.
Prime Minister Jacinda Ardern announced on Monday that Auckland will remain in Covid-19 alert level 4 until at least 11.59pm next Tuesday. Cabinet made an in-principle decision to move to level 3 then. The rest of New Zealand will stay in level 2.
The decisions will be reviewed next Monday.
Community cases have been rising in Auckland over the last few days, with 33 announced today.
Ardern said Auckland's lockdown was restricting the spread of the virus and remained the "best option" to bring the outbreak under control.
It was not possible, however, to "hermetically seal" the region off and there remained a risk to the rest of New Zealand.
"If Covid were to travel over the Auckland border the impact would be far greater in a level 1 environment," Ardern said.
Rotorua Chamber of Commerce chief executive Bryce Heard said without Auckland, the tourism sector was "virtually non-existent" and businesses couldn't sustain the loss of business.
Even operators that had pivoted to cater to Kiwis after last year's lockdown remained "in the firing line" with Auckland shut.
Heard spoke with a hotel owner with space for hundreds who had one guest on Friday.
"All we can do is encourage people to comply with the rules, get vaccinated as quick as we can, and get back to some sense of normality," he said.
"If we don't get back quickly, there's going to have to be some hard decisions about opening up the economy."
He said the country could not stay in lockdown forever.
"It's a slow death ... and the people paying the price are businesses around tourism and hospitality."
He said Rotorua's farming and forestry sectors, however, were doing well.
Hospitality NZ accommodation sector Bay of Plenty chairman and Tauranga's 850 Cameron Motel owner Tony Bullot said the accommodation and hospitality were hurting.
Level 2 was "much more subdued" than usual, with most events off and a big reduction in corporate bookings, most of which came from Auckland.
"The best thing to do right now is get Covid out of the community in Auckland."
Hospitality NZ Rotorua branch president and owner of Hennessy's Irish Bar Reg Hennessy said being stuck in the same position as last week was "deflating".
The past week under Delta level 2 restrictions was difficult and he said there was "so much uncertainty" for customers and the sector.
"We need Auckland, the country needs Auckland.
"It's tough going for our whole industry. If we stay like this for a lot longer, there will be a lot of casualties."
Tak Mutu of Mountain Bike Rotorua said domestic tourists' confidence around travel was noticeably knocked when Auckland was in lockdown.
"For everyone's mental health as well, the sooner we can get down the alert levels, the better we'll all be for it."
He said he felt for everyone in Auckland, and felt "incredibly fortunate" to be living in Rotorua, able to mountain bike at the weekend and go out for lunch with friends.
Peter Cooney, director of large building company Classic Group, said Auckland's extended lockdown would have "serious consequences" for the construction sector throughout New Zealand. Many materials were manufactured in Auckland.
"There's a serious issue in the building industry, prices are going up, costs are going through the roof, and this is only going to escalate prices."
Rotorua Economic Development chief executive Andrew Wilson said Auckland was the city's biggest domestic market, and the "impact of this lockdown will be felt for some time".
Meanwhile, there were "significant" supply chain disruptions for construction, and scheduled business events in the city needed to be scaled back.
Working at higher alert levels was challenging, he said.
"We'll continue to work closely with the visitor industry to look at how we can continue to provide ongoing support and advice as they navigate the uncertain path ahead."
Ardern said the decision to extend the lockdown triggered another fortnight of the wage subsidy. Any business that had lost revenue due to any part of New Zealand being in level 3 or 4 could apply, even if the business was operating in level 2.