Some Rotorua cafes and restaurants have suffered revenue drops of up to 60 per cent and are considering cutting hours as they struggle to survive in the red setting.
With Covid-19 variant Omicron spreading, New Zealand moved to red on January 23, leaving many people to work from home or reluctant to dine out.
Many hospitality business owners now hope more government support is imminent.
Our House owner Tim Smith said the restaurant was considering reducing its open hours by closing on Mondays, Tuesdays and Sunday evenings due to low trade.
This way it wouldn't be losing money operating on the quietest days.
"The whole of Eat Streat's very quiet," Smith said.
"Our regulars are still regular but we're very, very, very quiet as a whole street."
Smith said revenue and customers numbers had at least halved at red.
He believed people were staying at home because of "nervousness around Omicron".
"I think it's all of the commonsense things really. People are trying to keep themselves safe."
Smith said a wage subsidy would be "really helpful".
"We just want to try and make it through to the date where people start living normally again."
Smith hoped people would keep supporting local.
"We need their support more than ever."
The Government is looking at ways to support hospitality businesses, a possibility being reintroducing wage subsidies. However, there are no specifics of what this might be.
Finance Minister Grant Robertson said red allowed most buinesses to operate, "but it is clear that some people are behaving more cautiously than the setting requires".
Lime Cafe owner John Norton said the cafe was surviving thanks to regulars.
"You're looking at a 40 to 60 per cent drop in revenue."
Norton said this was not only because more people were working from home, but because "the Government injected two years of fear into people and they are reacting accordingly".
"One can only hope that things will get back to normal."
Norton said he did not know if some cafes would survive without Government support.
Hospitality NZ Bay of Plenty regional manager Melissa Renwick said there was "a notable absence of customers" at Hospitality NZ member's businesses.
"By businesses instructing their teams to work from home it has taken away all of their customer base.
"Everyone is already acutely aware that there aren't any tourists walking the streets and now there aren't any workers."
To make up for lost business, some cafes were offering delivery but delivery services were often at a cost of 30 per cent on each order, she said.
Renwick said the hospitality sector needed financial support from the Government in response to the imposed restrictions.
Hennessy Irish Bar owner and Bay of Plenty Hospitality NZ president Reg Hennessy said business in red had been "awful".
"The number [of customers] just keeps going down.
"We're relying on the finishing post hopefully around the next bend."
Customers that are still coming in were "people with common sense and people that haven't been turned into a state of fear.
"A lot of regulars have battled through it and don't think it's going to kill them.
"It's scary times for businesses in hospitality ... its a worry to what may come out on the other side of this."
CBK Bar and Restaurant manager Akash Arora said there had been at least a 40 per cent decline in customers and revenue since moving to red.
He said CBK was relying on regulars, particularly on weekdays, and bookings were regularly cancelled.
Arora said if the wage subsidy comes back "that would be great".
Sheryl Hewitson is a regular at multiple Rotorua cafes and restaurants including Lime Cafe.
Hewitson noticed regulars had still been going to the cafes and restaurants, but very few others.
"Hopefully we can get them [cafes] through this cause we don't wanna lose them," she said.
"It's really important to support our local cafes and restaurants."
She encouraged people to put discretionary spending back into local businesses.
She said a morning coffee was part of her "wellbeing routine" and it was worth the risk to "go out for your wellbeing and connect with other people".
Hewitson said she thought the cafes had done an "amazing job" at keeping the atmosphere happy and helping customers feel safe.
Abracadabra Cafe and Bar manager Owain Miles said it was "without a doubt" quieter since the move to red and customer loss was "pushing 60 per cent honestly".
"The amount of daily cases we're getting now is scaring people from leaving their house ... Everyone's a bit on edge."
The cafe was running more specials to make up for lost business and relying heavily on regulars.
"We've got this one lady that comes in and she does four coffees in the morning and three in the afternoon, she comes in every day religiously, you've got people like her that make it worth it.
"Hopefully people just realise it's the new normal ... if you're vaccinated chances are you're going to be all right."
Third Place Cafe manager Keshav Kajeker said the cafe had also experienced a drop in customers, particularly older patrons.
"They used to come but now they might be a little scared with Omicron.
"Currently we are doing 50 per cent of what we used to do before."
Kajeker said most of its customers came from the hospital nearby but the current one-visitor-only policy had caused a drop.
"We used to get families who were coming to see their relatives at the Hospital, we are lacking in that ... Once the hospital opens up it will be all right for us."
Sequoia Cafe manager Carrie Liu said business was down at least 30 per cent and the cafe was lucky to still have regulars.
"It is very hard, it's going to get worse but people might get used to it."
She said many customers used to grab a coffee on their way to work or on their break, but since many had moved to work from home they were "saving the trip".
"Everything is different now, it's a new pattern of life."
Zippy Central owner Aman Daap was on a similar page, missing customers who would come for their morning coffee before work.
"We still have regulars coming in but it's 10 to 20 per cent down from normal days."
He has noticed fewer people working in town, "they used to come in for coffee every day".
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