Queenstown Lakes Mayor Jim Boult had a "frank discussion" during an online meeting with Prime Minister Jacinda Ardern and Tourism Minister Stuart Nash on Tuesday.
While he was confident the Government "acutely understands" the unique needs of the communities in the district, "they have ruled out any re-instigation of the wage subsidy that we had during that first initial wave of the effects of Covid-19", unless Alert Levels 3 or 4 were in place.
Although the Government did undertake to "explore some possible assistance in other ways", it was still a "bitter pill" for those holding out for that as a lifeline, Mr Boult said.
He acknowledged there was no "silver bullet" to address the existing, and future, challenges for the tourism industry, but said it was still disappointing news.
"However, I appreciate the frank discussion with the Prime Minister and the clarity she provided.
"Personally, I will continue to work assiduously for our community on this matter."
He said he was aware Covid-19 had created a unique situation for the district, the country and the world and "in that context" appreciated there were "hard decisions that central government has to make" to keep the country safe.
"These are tough calls and it is times like these we need to pull together and support each other whenever we can.
"Locally, we are enormously thankful for the many Kiwis who have and are intending to visit us. Operators here are committed to adjusting the offerings to suit the domestic market and their budgets."
