$5 million fund for accommodation providers is a help, but industry says it has years of pain still ahead

The state government announced on Thursday a $5 million fund will be made available to regional short-term accommodation providers who have been forced to cancel bookings from holiday makers caught in the 10 Victorian coronavirus 'hotspot' postcode areas.

Payments of up to $225 a night will be made to businesses including motels, caravan parks and short-term rentals provided that full refunds are given and no cancellation fees are levied on those who have been forced to cancel.

The one-off fund has been supported by the Victorian Tourism Industry Council but the state government has confirmed that there are no plans for it to include theme parks such as Sovereign Hill and Kryal Castle which have been forced to offer refunds to some pre-purchased ticket holders as the pandemic worsens across Melbourne.

Sovereign Park Motor Inn's Tim Canny said any payment that helped keep the industry going in this tough time was welcome, but he held concerns about the lack of confidence in travellers, which he believes could take up to two years to return.

"That's good news, I didn't know about that," Mr Canny said when told of the new fund.

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"We've probably had five bookings that have cancelled over the school holidays. Every cancellation is sad news especially when business is low already.

"Anything to help out business remain open and viable is of great benefit."

Lake Wendouree Luxury Apartments owner Gavin James said there wasn't the travelling public at the moment.

"We just haven't had the bookings, people have been so confused," Mr James said.

"We're finding even over the school holidays, we've had people saying they are not sure they are allowed to come. We've seen no signs of any future bookings whatsoever, and it won't change in the short term.

"This thing changes every day and I don't believe people will be prepared to make bookings until they are confident."

Mr Canny said weekend bookings were currently running about 50 per cent, due largely to the reopening of Sovereign Hill at weekends and the facilities including the indoor pool which were available at his motor inn.

"Weekdays we're running at about 25-30 per cent, which is half leisure, half corporate but after the school holidays it's looking pretty sad though."

Victoria Tourism Industry Council chief executive Felicia Mariani said the funds would be a critical lifeline for struggling businesses.

"The Andrews government's offer to provide operators with a maximum of $225 per bookable product per night for cancellations at their properties, will make a huge difference to many across regional Victoria who are already on the edge after so much disruption to their businesses over the past many months," she said.

"While implications of this travel ban for these hot spot areas go beyond just the accommodation sector within our industry, this sector in our regional areas will likely bear the widest brunt of these latest restrictions."

Minister for Industry Support and Recovery Martin Pakula said the funding follows confirmation of one-off $5000 payments that will be made available for eligible businesses in the 10 postcode areas subject to the return of stage 3 restrictions.

"We know that the last thing that regional accommodation houses and caravan parks needed was more obstacles after six months of struggle," he said.

"Lockdowns bring no joy to anyone, but we're standing with businesses in the regions and the suburbs as we navigate a path to the other side of this crisis."

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