Whakatane economy could be 'significantly impacted' by White Island tragedy - expert

The economic impact of the Whakaari / White Island tragedy will affect most Whakatane industries, according to Professor Simon Milne, director of the New Zealand Tourism Research Institute.

The devastating incident on the volcano left six people confirmed dead, with eight more missing and presumed dead, and 30 in hospital. 

Prof Milne said much of the area's local economy is made up of businesses that rely on tourism and the knock-on effect of the disaster could be widespread.

"The community of Whakatane is not large, the surrounding area is not particularly diverse economically. So this is a very important part of their economy and I think there's no question there's going to be a short term impact and possibly long term impact as well," he told Newshub.

However, Prof Milne said the damage to Aotearoa's tourism industry as a whole would be limited, despite the worldwide coverage.

"Its not great publicity for the country, but I think visitors are aware that this is a natural disaster and that its a terrible tragedy, but it's unlikely to be repeating itself very quickly anywhere else in the country."

He says the initial impact will hit businesses that are directly involved in selling the region to tourists, but will spread wider than that over time.

"You'll see restaurants, local food suppliers, gas stations - all of those small business in the region are very much dependant on those coming from outside to buy goods and services," said Prof Milne.

"Beyond that, we have a more indirect impact so people in the construction sector, people who maintain vessels and aircraft and cars those that sell insurance and other kinds of services."

Prof Milne said in the long term, the tragedy may lead to stronger policies and standards, which would enhance Aotearoa's reputation; but in the immediate future, the world will be watching to see how New Zealand reacts as a country and a tourism market.

"I think the first and most important response is that we are shown as a country to be well organised, compasionate and responding as well as we can to this tragedy. I think that's really the first and most important thing. Beyond that, I think it's really going to depend on what kind of processes are undertaken in terms of reviewing this business, this sector, and seeing what kind of challenges and issues lay ahead."

At this stage it's unknown if there's been any immediate drop in travellers booking trips to New Zealand as a result of the tragedy.