The package, which will provide 800,000 travellers with half price tickets, is aimed at helping the tourism industry survive once the wage subsidy program JobKeeper ends in March.

Small employers will also be afforded low-cost loans as part of the $1.2 billion investment.

However, much of the funding provided has been devoted to local government areas on the coasts, and in Queensland, something that Dubbo mayor Ben Shields has criticised.

"It's disappointing that we have been left out of if, and it's disappointing that the federal government have decided it's best to send tourists to Queensland," Mr Shields said.

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Mr Shields said the decision to provide relief only to certain areas could pose problems for areas like Dubbo.

"It's potentially using taxpayer funds to directly compete with Dubbo in terms of tourism," Mr Shields said.

"We are running the risk now that we'll start losing our tourist momentum, that's very disappointing, but from the aviation sector as whole, it's even more disappointing."

Mr Shields said the hit to the Dubbo airport through landing feels alone meant at least $5 million lost in revenue across the length of the pandemic so far.

"Our airport has lost well in excess of 5 million dollars in landing fees through this pandemic," Mr Shields said.

"I think they need to go back to the drawing board and look at a way to simulate the entire industry, as opposed to just picking a few."

While some motels and other accommodation services have weathered the storm better than others due to differences in clientele, other tourism outlets, such as Taronga Western Plains Zoo, said that cheaper flights for the regions would be a big boost to their business, according to Director Steve Hinks.

"Not only has north-western NSW borne the brunt of Covid, but the region has been ravaged by the worst drought on record over the past 3 to 4 years," Mr Hinks said.

"With the drought broken, tourism has been at the forefront of the green shoots of economic recovery in the area over the past few months."

"Making air travel to Dubbo affordable for all Australians would provide much needed tourism dollars to the region - seeing this support package extended to the state's number one family holiday destination would be a welcome boost to getting the region back on its feet."

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