With no further government support expected, 2022 is crunch point according to Brad Olsen, principal economist and director of leading New Zealand economic consultancy Infometrics.

"[In this year we] might see more businesses fall over," he said, before the disruption of Covid works its way through by 2024 or 2025.

Olsen's message to Fiordland tourism and business owners on Friday (18th February) was sobering but expected.

Many Fiordland's businesses, despite having pivoted, are still operating on just 30 - 60% of their pre-Covid revenues.

Olsen said the tourism sector was currently 4 million visitors down and hospitality in a $2 billion hole. The primary sector [however] was doing well and had kept things going.

Domestic tourism over the last 2 years had given the sector a good boost and was still important, but Covid had been longer and more drawn out than expected.

This has changed Kiwis' habits, he said.

While Kiwis' were more resilient, they were also more cautious.

New Zealand now has a de facto [lockdown], Olsen said, with people more hesitant to go out and preferring to stick around home or maybe buy an e-bike.

Those travelling are choosing destinations they can drive to, rather than fly to, and while generally happy to spend up on good food, they are more budget conscious when it comes to accommodation choices.

Work expectations had also changed, he said, with people now more willing to move to smaller centres or work remotely.

Olsen predicted international tourism could reach 70-80% (of pre-Covid levels) by 2026.

However while noting New Zealand had a good name internationally for the way it had handled Covid, he suggested the longer the country remained closed to international travelers, the harder it might be to attract them.

Olsen said businesses should expect interest rates to climb to pre-Covid levels (or maybe a little higher) and wages to continue to increase.

He said inflation may spike to around 5.9% and hold for 1-1.5 years. However he did not see any signs of a recession, citing building consents still far outstripped the country's capacity to service them.

He said it was important for businesses to keep a close eye on their expenses and have a plan. However he admitted revenue budgeting would be harder.

Diversification and changing the way things are done would continue to remain important.

Olsen noted an obvious resilience amongst operators, and said community spirit and businesses working together was a definite strength.

Things hopefully will not be as dire in a few month's time, he said.

The round table discussion was hosted by the Fiordland Business Association and Southland Business Chamber.