It will take years for the Queenstown Lakes District to recover economically from the Covid-19 pandemic, even if overseas tourists return next year.
Early modelling from Infometrics shows the district's GDP declining by almost a quarter and close to 8000 jobs being lost in the coming year.
Queenstown Lakes District Council (QLDC) mayor Jim Boult said the report painted a bleak picture, but was based on the assumption of a do-nothing scenario and the council was already working to improve the outlook.
"While Infometrics project a very difficult time ahead, we will meet these challenges head on as a community," he said.
"We will continue to support those who need it during this tough time but we are already well under way working with government, businesses and the community to support initiatives which bring jobs back and steer us towards and help to shape our new normal. These need to align with our community vision for 2050 and beyond."
The report forecast employment shrinking in the district by 25.2 percent, second nationally only to the much smaller Mackenzie district.
Low-skilled workers were expected to bear the brunt of Covid-19's effects.
"Substantial job losses are expected across all skill levels, with the greatest losses expected to occur in low-skilled occupations (3456 jobs lost)," the report said.
More than 1000 hospitality workers were forecasted to lose their jobs with 600 food trades workers and about 550 cleaners and laundry workers also out of work.
The report forecast unemployment rising from 1.1 percent in the March quarter this year to 18.5 percent in March next year.
"Earnings in the Queenstown-Lakes District are forecast to decline by $270 million (16.3 percent) in the year to March 2021."
The report said it would take the region years to recover.
Boult said the council remained optimistic.
"Predicting how and when domestic and international tourists come back to the Queenstown Lakes is a tough game, but we are more hopeful than the research on this front.
"The projections show that the timing of a trans-Tasman bubble, or the extent to which Kiwis travel down here, could make the difference of nearly 1000 jobs. And this could be even sooner than we hoped with recent news the trans-Tasman bubble may be here earlier than expected."
To tackle the effects of the pandemic, Boult announced two taskforces - one concentrating on community recovery and ensuring the vulnerable were looked after; and the other would focus on economic recovery.
"We are going to have to look at business in new ways," he said.
"We can develop our economy to be more diverse, sustainable and resilient and aligned to the effects of a changing climate."
As part of the response to concerns about low-skilled workers, community hubs had been established in the Upper Clutha and Wakatipu Basin to connect the community with welfare support and find information about gaining new employment or diversifying their skill set.
"Queenstown Lakes is still a unique, beautiful place and international tourism will slowly return. So this makes now an ideal time to look at infrastructure for that return, as well as benefiting our local residents," Boult said.
"QLDC is waiting on a final decision regarding the funding applications to the Crown Infrastructure Partners for our shovel-ready projects which, if successful will support in excess of 1600 jobs over the next few years and boost the economy.
"Our district has a proud entrepreneurial spirit and we are doing all we can to shorten the curve and support our businesses and communities through this stressful period. In partnership with other organisations and supported by $1.4m in funding from MBIE (Ministry of Business, Innovation and Employment), we are working on creating redeployment options for some of our local workers that have lost their jobs."
The council would soon launch an online 'ideas portal' to allow locals to contribute to the district's recovery, Boult said.
"Throughout the coming months, it's important we all support each other during this difficult time by promoting our district, staying and buying local, and being kind.
"Queenstown Lakes has always been a fantastic place to live, work and play. Our community will show itself to be strong and resilient."