The tourism industry is warning that if travel rules under alert level 2 aren't changed, thousands more jobs will be lost.

The country is in alert level 3 for at least two weeks and Cabinet will reveal what happens next on 11 May.

Once restrictions ease to level 2, people will be advised to avoid non-essential travel, meaning trips to New Zealander's favourite holiday spots will still be off the cards.

The industry says it can operate safely and allay the government's concerns about contact tracing.

Tourism Industry Aotearoa chief executive Chris Roberts said the sector was relying on getting domestic tourism moving again.

"If it is not possible to travel around New Zealand under level 2 we will see hundreds of businesses collapse very quickly," he said.

Roberts said businesses would not be able to survive on just local visitors, especially if we stayed in level 2 for some time.

"The level 2 guidelines allow specifically for bungy jumping to start again, but there is no point opening a bungy jump operation if the only people who can come are those people who live locally.

"So they need to be able to access people from around New Zealand if these businesses are able to get back into business," he said.

Active Adventures chief executive Wendy van Lieshout said they would not be able to operate under current level 2 rules.

They are based in Queenstown and operate tours out of Christchurch and parts of the North Island.

"To be perfectly honest, until you know Aucklanders or Wellingtonians can travel to Christchurch or the other way around, there's no way that there's enough to keep us ticking over with those numbers," she said.

She said she had been one of the lucky businesses who had been able to retain all of her staff.

"But that is all holding on for dear life for when we can resume running our trips, so that is absolutely critical.

"The business will survive, but it will certainly have some potential impacts on our workforce which will be very devastating for us," she said.

National Party tourism spokesperson Todd McClay believed New Zealand was ready to open up travel and the government needed to revise its rules.

"We are at the stage where the number of new cases in New Zealand continues to fall, I don't see a reason why when we go to level 2, New Zealanders shouldn't be able to cautiously travel and support tourism.

"Every single time somebody travels or stays in a motel or hotel they are saving a job in New Zealand," McClay said.

Roberts said tourism operators would be able to ensure there was robust social distancing and contact tracing.

"We know [from] talking to tourism businesses they're fully committed to operating in a safe and responsible manner and that they will contact trace all of their customers.

"And they are very ready and willing to promote the government's effort to establish a national tracing system, going as far as insisting that their customers have signed up to any national system, once one is available," he said.

Deputy Prime Minister Winston Peters said business complaints were understandable and the government was looking carefully at what could be done, but had to be cautious.

"The fear the government has and the fear the experts have is that if we're careless we end up back in level 4 and set ourselves back so much further and for so much longer," he told Morning Report.

"If they're saying to you - and they're all saying to you - there are enormous dangers here we've got to listen to them."

Governments on both sides of the Tasman have suggested the establishment of a two-country bubble to help boost economic recovery.

Peters said Australians wouldn't be allowed into the country while New Zealanders were still not allowed to move between regions.

"We would not have one rule for people from offshore and a different rule for New Zealanders".

A trans-Tasman bubble could be subsequently expanded to parts of the Pacific, he said, depending on border security.

"The great focus now has got to be on our border security so that no transmission comes in by way of visitors if we can secure that, we're on the way to getting our country back to normal."

Prime Minister Jacinda Ardern has said the big focus of alert level 2 would be around mass gatherings and ongoing preventative measures around containment of movement.

"And when you think about some of the outbreaks we've had, it's often been that regional movement that's been really problematic for us", she said.

But she did appear to leave the door open yesterday - saying that Cabinet will have another look at the settings before we move to level 2 - including the rules around travel.

"Just checking that we've got those settings right. As I said, we have actually moved through most of that already when we did the finer detail around alert level 3, but as is our practice we keep doing double checks as we move through the alerts that we think it's matching our needs at that time."

Peters is keen to see domestic tourism and more regional flights take off as soon as possible.

"Well obviously we want to see the regions come alive again, and it may actually cost money to do that for a short while, but the sooner we can do that, the better", he said.

He told Morning Report there was a need for Air New Zealand to be seriously responsive to every region in the country and their needs.

"And that means that you've got to factor into their operations, the value that they are to the local economy, not just go from the bottom line of Air New Zealand."

Tourism Minister Kelvin Davis in a statement said: "MBIE and TNZ are working with DOC and the industry to help reimagine what the future of tourism should look like in NZ.

"Work is underway on what life will look like in alert level 2 - and as with previous alert levels, an announcement will be made in due course, and he doesn't want to pre-empt that.

"What I can tell you is that the Covid-19 website states that at alert level 2, people are advised to avoid non-essential travel."