"It's disappointing to see the City of Ballarat make this preemptive decision given the significant government review of regional tourism that is under way," a state government spokesperson said in a written statement.

"Our regional tourism review is looking at the role and make-up of our regional tourism boards and has consulted widely."

The council announced its decision to cut funding to its arm's length tourism marketing and research body last week. Councillors had voted unanimously to support officer recommendations in camera at its ordinary council meeting on June 12.

The City of Ballarat currently provides more than $2.7 million each year to the organisation, originally known as Ballarat Regional Tourism when it was first separated from council in 2012. The organisation ran the events, marketing and product research, although events were taken back in house in 2017. Earlier this year, Visit Ballarat re-branded to Made of Ballarat.

The organisation has 16 full and part-time employees, whose future is unclear as the existing service agreement is due to end on September 30. The council says there should be 10-12 jobs available when they take responsibility for the service.

In response to an acrimonious meeting on Thursday evening when councillors and council officers faced questions from tourism professionals about the move, the City of Ballarat released a statement to outline its reasons for the decision.

It described Ballarat's tourism growth as "much slower than the rest of regional Victoria", and compared the city's 2.6 per cent increase in international visitors since 2017 with Bendigo, which it said had a rise of almost 12 per cent. It also said regional Victoria had seen more than 10 per cent growth in this sector.

Overnight stays in Ballarat had decreased by 40 per cent for international tourists and by almost 12 per cent for domestic visitors in the same time frame, it claimed.

It also highlighted its $6 million a year spending - combining the Visit Ballarat budget with its events budget - for a $484 million return. It contrasted that with the City of Greater Bendigo's spending of $3.8 million for a $479 million return and the City of Greater Geelong's investment of $4.9 million for $976 million coming back in.

The statement from the City of Ballarat also cited its involvement in high profile events occurring over this period including AFL games and White Night festival along with three-year commitments for the Cycling Australia Road Nationals.

The City of Ballarat mayor Samantha McIntosh said that council would continue to work with state government colleagues and neighbouring councils.

The statement was released after 5pm on Friday evening. The Courier was able to speak to a Visit Ballarat employee after the statement came out, who contested the council's interpretation of some of the figures, but said they would not give a detailed rebuttal.

Instead they referred back to an earlier statement which said Visit Ballarat's "key priorities ...remain the care and fairness to our staff and secondly to ensure our industry is well represented during any change in the way tourism services are managed."

The Visit Ballarat statement also said that Thursday's meeting made it clear the industry "was disappointed by the decision and needs ongoing engagement."

At the event in Housey Housey on Armstrong Street, business owners criticised the lack of consultation between council and themselves. The evolving Ballarat is Open strategy, which council described as a "new era in city-wide marketing", was also strongly questioned.

The Visit Ballarat statement concluded: "We hope to work closely with the City of Ballarat and our industry ... and depending on our members this may involve continuity of Visit Ballarat as a tourism member association."

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