The NZ Alcohol Beverages Council (NZABC) says the move to alert level 1 isn't "the panacea it appears to be".
New Zealand will move levels at midnight on Monday, and it means all restrictions are lifted - the only restrictions that remain are at the border.
But NZABC executive director Bridget MacDonald says even though it's nearly "business as usual", the reality for the industry will be very different.
"We still have a very long and rocky road to recovery ahead. Operational freedoms might be back for restaurants, cafes, bars and clubs to operate at capacity to try to drive more income and control costs, but there are still significant financial and social challenges in this environment," she says.
"We're aware consumer anxiety around socialising may remain an issue for some. Then there is the uncertainty of our economic environment and the impact on people's spending decisions. People may continue to be conservative with their spending."
With the lack of international tourism and winter coming too, MacDonald says level 1 will hit the hospitality sector hard.
In February and March before New Zealand went into lockdown, she says restaurants, cafes, bars and clubs were all affected by customers' initial concerns about going, which resulted in a 40 percent downturn before plunging into an all-time low of 95 percent in April.
The move to level 2 and the ability to open under restrictions came with higher operational costs and the restrictions on capacity meant businesses couldn't generate income or manage debt. She says the higher-performing businesses only made 50-60 percent of revenue compared with the same time last year.
"We estimate a recovery period of up to three years for hospitality and the alcohol beverages supply chain of growers, brewers, distillers and winemakers, importers and exporters - and that sentiment is agreed globally."
But she adds they're still upbeat and optimistic for their economic future.
"A good number of Kiwis have been connecting with friends and family, and it’s been great to see smiling faces and hear the buzz of long-awaited catch-ups."
"For many it is too late"
The Employers and Manufacturers Association (EMA) says although it's relieved at the level 1 announcement, it warns the hard work for the economy lies ahead.
Head of advocacy and strategy Alan McDonald says it's been a tough time with redundancies and business closures, and the move to level 1 could be too late.
"For many it is too late but now we need a national response to get people flowing back through our town centres, back to work and getting the economy moving.
"International uncertainty and lack of confidence in the domestic economy means we need to see measures that will help restore the confidence of business owners, investors, workers and consumers to get the dollars flowing again."
He adds level 1 should give employees and employers the confidence to return to their workplaces and rebuild their businesses.
"We can be rightly proud of controlling COVID-19, but now we need to see people and confidence returning to our CBDs and businesses. We need a similar nationwide response to kick-starting the economy."
