Heavy job losses and asset write-downs are expected in Queenstown despite a major government cash splash in New Zealand's South Island tourist town.
Prime Minister travelled to the hard-hit region on Friday to open the local ski season, announcing a $NZ85 million ($A80 million) infrastructure package.
"This stunning town is an internationally renowned tourism attraction and unfortunately the local economy is experiencing a major downturn as a result of COVID-19," Ms Ardern said.
Ms Ardern said her multi-billion dollar wage subsidy scheme had helped fight unemployment and there would be "more (support) to come".
However Queenstown, home to the southern hemisphere's best skiing, is already the site of economic devastation.
Radio NZ reports a six-time increase in the number of jobseekers in the Otago region, with predictions of a 18.5 per cent unemployment rate.
The NZ Herald reports long queues for food vouchers and for job transition services.
ANZ New Zealand predict house prices will fall across the board by 10 per cent due to COVID-19, with a much larger drop in Otago.
Previously a high-growth region, Queenstown has fallen to earth.
Earlier this week, the government allocated $NZ10 million ($A9.4 million) to iconic bungy jump operators AJ Hackett.
Ms Ardern said 320 jobs would be directly created by the new $NZ85 million package, with many more indirectly supported.
The funding will go towards a new town centre and a new road, with jobs in construction.
Ms Ardern also opened the ski season amid fading hopes for international tourists to visit the world-famous slopes in 2020.
The prime minister previously slated September as a realistic target for a much-anticipated trans-Tasman bubble, but has reported no progress on the resumption of regular travel between New Zealand and Australia, which is also still seeing community transmission of COVID-19.
New Zealand has eliminated the disease from its shores, but is picking up cases at the border.
Health officials announced one further new case of COVID-19 on Friday, an elderly man who returned from Kenya.