The hospitality sector has been hit hard by restrictions that have brought trading to an effective halt for many venues, and seen dozens of employees laid off.

Shamrock Hotel licensee Ray Sharawara and publican Andrew Lethlean said they would like to see rates waived for small businesses.

City of Greater Bendigo acting chief executive officer Andrew Cooney said simply waiving rates was not necessarily the best solution.

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"'Blanket' rates waivers are not the most effective way to provide relief to businesses," he said. "Not all businesses (have) financial hardship."

Mr Lethlean said his four businesses had been closed for almost six months this year. with ongoing losses compounding to thousands of dollars each month.

"Although we are closed, the bills still keep coming in," he said. "The electricity, gas, water, insurance, accounting, lease equipment, loans (and more).

"We now have a rates bill of another $60,000 issued from our council. Rates for businesses that are closed or have limited operations.

"This is when we need our council to reach out, step up and support their local small businesses, the life-blood of this magnificent town."

Mr Sharawara said hotel owners had met to discuss what sort of relief would best help them recover.

"The part we're really peeved off with is not getting relief from rates," he said. ""Every hotel in Bendigo is in the same position.

Mr Cooney said rates revenue is council's core source of income.

"Without it we could not continue to provide services to the community," he said. "Council decided that the more effective way to support businesses through the pandemic was to make allowances for businesses on an individual basis."

Mr Lethlean, who runs The Metropolitan, Tonic, Star Bar and The Malt Shovel, said state and federal government grant support - along with understanding landlords - had aided businesses but that council needed to step up further.

"The council itself is a business running our town and they do an exceptional job," he said. "However to ensure long term survival, growth and development they need to re-evaluate and prioritise some of their expenditure to support those small businesses who need it most.

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"My total operations (are) running at three per cent of normal operations. Sadly, I have stood down over 60 staff and currently have 14 staff on JobKeeper."

Mr Cooney said the COVID-19 pandemic had caused significant disruption to the Greater Bendigo economy.

"The city understands many businesses are struggling, and council has committed to a flexible budget to ensure that support measures remain effective."

"We have Financial Hardship Guidelines in place and will fully defer rates payments until June, 2021, if required.

"We will continue speaking to businesses about their needs to help them recover. We strongly encourage those businesses that are struggling to contact us."

Council's 2020/21 budget has waived local law fees such as A-frame and outdoor dining fees, and reduced food, health and accommodation fees by half for impacted businesses.

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Mr Cooney said there have been previous discussions between the city and local hoteliers during COVID-19, and follow-up talks are being scheduled.

Mr Lethlean said deferring rates payments until next year would heap pressure on struggling businesses.

"They have offered deferred rates but this only puts added pressures going forward which may again lead to businesses not being able to survive in the long term."

Mr Sharawara said hospitality businesses hope restrictions ease more in regional areas than in Melbourne. He said allowing 20 people in per venue, with four square metres of room per patron, wasn't feasible.

"It doesn't let us operate to make any money," he said. "We would like (to see) 50 people to a room and two square metres per person to have some normality to make some money.

"We understand this is serious stuff but we want to open. If we have to have restrictions, we're happy to learn to live with them and implement but we want to open."