Managed isolation and quarantine hotels face a nervous year ahead as they prepare for the return of tourism activity, according to the Hotel Council Aotearoa.
The country's border will be progressively reopened starting from the end of the month allowing in New Zealanders, followed by migrant workers.
But most international tourists won't be able to return until October and current rules mean they will have to self-isolate on arrival.
Hotel Council strategic director James Doolan said outgoing managed isolation and quarantine (MIQ) hotels will struggle, as short-term visitors would be put off by isolation rules.
"MIQ hotels have been propped up by MIQ, there's no denying that. [Once they are no longer MIQ facilities] instead will have to start competing with the many Auckland hotels that weren't doing MIQ work.
"And we know that since the borders closed, those hotels have been about one-third full. Normally they would be about 80 percent full.
"So the MIQ hotels will be nervous because we've got a huge oversupply of hotel rooms already when we don't have transient tourists in our country."
The industry wanted certainty from the government over a full reopening, without isolation rules, Doolan said.
"Unfortunately the government's timeline for reopening does not yet indicate when transient tourists will return because transient tourists aren't going to spend seven days in isolation."
There was a danger that next summer could be lost if the government did not make a decision on it early, Doolan said.
"By the time October rolls up, if we haven't already given a clear indication that there will be no isolation on arrival, we are pretty much writing off next summer for transient tourists, which is a terrible thing to do.
"Tourism has a really long lead time and what we mean by that is airlines have to arrange flights, and the wholesalers and package tour operators have to sell the product well in advance," he said.
Prime Minister Jacinda Ardern said reopening the border was based on several factors including the level of vaccinations.
"It's a constant balance but one I think we've got right."
During yesterday's announcement of the border reopening, Ardern said the government would be continually monitoring the value of self-isolation, and it was possible it may not be needed in the "not too distant future".
