Quest's apartments in Bultje Street were expected to be almost fully occupied as the school holidays started this week, manager Amy Verma reported on Monday.

Instead it was hit with a wave of cancellations.

"We were expecting our school holidays would go really good, and I think the whole of Dubbo was expecting the same thing," Ms Verma said.

"We were having bookings, almost full occupancy, and now we have a very low percentage occupancy, so it's a very hard time."

On Saturday afternoon Premier Gladys Berejiklian announced the lockdown for the Greater Sydney, Central Coast, Blue Mountains, Wollongong and Shellharbour regions, to come into force from 6pm that day.

Wearing masks also became compulsory across the state in all indoor non-residential settings, including workplaces, and at organised outdoor events, in a suite of measures geared at reining in the COVID cluster.

The Dubbo accommodation provider felt the impact immediately.

"We were flooded with cancellations the day these things were announced," Ms Verma said.

"This time the announcement was made with a very brief notice period, and that made our reception work really hard.

"We were on the phone, like we felt like we were in a call centre, and the phones they were not stopping."

On Monday the business's manager likened the situation to the first fallout from COVID in March 2020, and she was bracing for a tough time.

"Yes, we need to change our strategies for surviving for the next couple of weeks," Ms Verma said.

"The future seems to be unknown at the time, we never know how long this lockdown will be there.

"So it's in Greater Sydney, but it is affecting us as well."

Ms Verma suggested there was a reluctance from interstate residents to travel, despite no border restrictions, because "nobody knows what's going on with this new strain of virus".

She also said in particular, masks being mandatory in the region as well was something new.

"Psychologically also I think for people, they are not willing to travel to regional NSW," Ms Verma said.

The accommodation operator is hoping the local council will help let people know "regional areas are still safe".

"I know people from Greater Sydney can't come and travel, but still, people are having an impression that even regional NSW is not safe because of these new mask restrictions, which is ok, I understand it is good for all of us," Ms Verma said.

"But still some kind of message should go from government officials saying it's still safe to travel if you abide by the rules of 1.5 metres of social distancing, and wearing masks, so we at least get something to make sure that our business still survives with this hard thing."

The state's COVID response is also affecting the NRMA Dubbo Holiday Park's occupancy.

"The NRMA has seen a 20 per cent drop in bookings as a result of the Sydney lockdown for the July school holidays," an NRMA spokesperson said.

"Many of our visitors have rescheduled their trips for the next school holidays or taken a credit for a future stay, very few are cancelling their holidays altogether.

"We look forward to welcoming visitors back to our parks when it is safe to do so."

Dubbo Regional Council acting economic development and marketing manager Katrina Nicholson was also highlighting remaining activity and some light at the end of the tunnel.

While the Dubbo region was experiencing cancellations across all accommodation platforms, both commercial and airbnb, operators were still being supported with essential workers and regional visitors outside of Sydney booking in, she said.

"We are also being told by operators that some of those cancelled rooms have been rebooked by regional people taking advantage of the school holidays, with accommodation capacity for the next seven days forecasted to be 71 per cent, which is an increase of 19 per cent on 2020, and 15 per cent on 2019 for the same period," she said.

"Bookings are projected at 67 per cent occupancy which is an increase of 7 per cent on the same period last year and 15 per cent on 2019 - so they're positive signs that things are still happening in our local economy."