Victoria Tourism Industry Council chief executive Felicia Mariani said the funding announced by the state government to support businesses during the state's second lockdown is vital.
The Victorian Government announced a $534 million Businesses Support Package on Friday after the Greater Melbourne area and Mitchell Shire were put back into lockdown for six weeks.
Tourism and accommodation businesses will be eligible for the funding following cancellations of visitors following Victorian premier Daniel Andrew's lockdown announcement.
Ms Mariani said inclusion of further support for tourism and accommodation businesses in the package was vital to supporting an industry decimated by the COVID-19 restrictions.
"We've spoken to operators across the state and heard first-hand the trauma and despair that is pushing this industry to its limits in Victoria," she said. "Accommodation properties have experienced 100 per cent cancellations since the premier's announcement this week and these businesses are on their knees right now."
The Business Support Package includes cash grants for struggling businesses, mental health support for business owners, relief for tourism operators who can no longer welcome Melbourne-based visitors for holidays.
It also offers tailored and targeted advice for businesses to adapt, stay afloat and then bounce back on the other side.
Member for Bendigo East Jacinta Allan said the lockdown would hurt tourism operators given it is during school holiday period.
"We recognise this is in the middle of school holidays, many businesses would have had bookings and this will provide support for those cancellations," she said.
"The entire period of time we have been dealing with pandemic has hit the tourism and hospitality sector quite hard. That's why in addition to other supports, there needs to be more support for local tourism operators to cover the cost of cancellations."
Accommodation operators across the state who have experienced cancellations from any of the affected postcodes in Metro Melbourne or Mitchell Shire can apply for a reimbursement of up to $225 per bookable accommodation product for up to a cap of $1,125.
Some funding would also be used for region-to-region marketing.
"We recognise there is an opportunity to still move for people (in certain) regions," Ms Allan said. "We know Bendigo is a wonderful place to visit and we want people to visit safely and enjoy it, Ms Allan said.
"Businesses (that have adapted) show the intelligence and resilience of local business to respond in remarkably challenging circumstances. We all have a role in supporting local businesses."
Ms Mariani said region-to-region tourism in areas able to travel would help see some visitation return.
"Region-to-region travel is worth $2.3 billion with 6.4 million visits annually," she said. "These regional centres across Victoria are not in lockdown and we need to encourage visitors to travel there.
"The additional business support within this $534 million package will also help many tourism businesses who are struggling to stay afloat.
"The additional $30 million for hospitality and the night-time economy will be a tremendous boost and responds to the issue that many of these larger establishments were unable to benefit from previous rounds of support from the Victorian Government."
Shadow treasurer and Member for Ripon Lousie Staley said the support being offered was inadequate for regional tourism businesses.
"Regional tourism businesses are on their knees," she said. "There's no other way to explain that. They're caught in a situation not of the of their making. The support being offered is inadequate and not targeted in right way.
"We were all so looking forward to welcoming people from Melbourne to country Victoria and that is just not going to happen now for at least six weeks."