Western Australia's tourism industry has been hit by mass cancellations of Chinese tourists because of the coronavirus outbreak, which in some places has already prompted layoffs.

Key points: More than 1,000 Chinese tourists cancelled at one restaurant in two days

More than 1,000 Chinese tourists cancelled at one restaurant in two days WA's Mid West has seen mass cancellations from tour groups from China

WA's Mid West has seen mass cancellations from tour groups from China Local businesses hope there will not be ongoing economic damage to the industry

The state's tour businesses have enjoyed a recent boom in Chinese visitor numbers and a trial of direct Perth-to-Shanghai flights began just a fortnight ago.

But several are now being hit hard during the peak tourism season by China's reported ban on group package vacations.

Peter House, who manages the Lobster Shack at Cervantes, 200 kilometres north of Perth, said the business has had hundreds of cancellations in the wake of the outbreak.

The Lobster Shack restaurant, usually teeming with tourists, lies empty. ( Supplied )

He said the impact on the business, which includes rock lobster processing and a large restaurant, was sudden.

"We had 500 cancel on Monday and 660 on Tuesday. The numbers are just dropping off day by day," he said.

Mr House said about 10 staff had been cut from the roster already.

Peter House, owner of the Lobster Shack, says tourist numbers are way down this year. ( Supplied )

"It is a big impact and it is not just an impact on our business, it is the flow-on effect as well to the rest of the industry and other people that we buy off as well," he said.

"Normally by this time of the week, predictions for next week we would have had bookings in excess of thousands, but at this stage we have got less than 100."

Charter flights curtailed

Geraldton Air Charter managing director and chief pilot Wendy Mann said up to 20 per cent of the company's passengers were from mainland China and bookings from next week had already been cancelled by Chinese tour companies.

Geraldton Air Charter managing director Wendy Mann says group bookings have been particularly hard hit. ( ABC Midwest and Wheatbelt: Zachary Bruce )

"They just say because of the coronavirus impact and the fact that group travel is prohibited, please can we cancel our bookings," she said.

"It is quite devastating to think we have already had about 105 people cancel tours to the Pink Lake."

Pink Lake near Hutt Lagoon, north of Geraldton, is a major attraction for Chinese tourists. ( Supplied: Josh Perkins )

The lake has become a major drawcard for Chinese tourists to WA.

Ms Mann said she was expecting to lose about 10 per cent of flight bookings, as Hong Kong tours made up a portion of her Chinese clients and the city state had not closed its borders.

She said she would have to consider laying off staff if bookings declined significantly, despite "hating the prospect of putting anyone off".

Hygiene concerns for businesses

Geraldton Air Charter has also stepped up its hygiene measures.

"Our pilots and administrative staff are all wearing masks to prevent any virus spreading to our staff," Ms Mann said.

Geraldton Air Charter staff like Leo Ma have been wearing masks to prevent any infection spreading. ( ABC Midwest and Wheatbelt: Zachary Bruce )

They had also stopped loaning snorkelling gear to tourists.

"Even though we disinfect those, we don't want to have any risk whatsoever," Ms Mann said.

She said she expected a difficult couple of months as the world grappled with the virus outbreak, but she hoped the Chinese tourism market would rebound.

"I believe it is of huge importance to the Mid West," she said.

"There are so many people coming here now and it would be devastating to see that destroyed."

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Fires result in tourism boost

But not all WA tourism operators have raised concerns over a downturn.

Caversham Wildlife Park owner David Thorne said he had experienced a recent boost in tourist numbers after the devastating fires in the nation's east.

In contrast, Western Australia has been far less impacted by fires so far this season, and this had offset some negative influences.

"So we might have picked up there, lost a bit here, and end up even," he said.

Eric and Veronica Ou, from Mainland China, are visiting Australia for two weeks and squeezed in a trip to Caversham. ( ABC News: Evelyn Manfield )

Mr Thorne said he did not rely solely on Chinese visitors and had made sure to market his business around the world.

"As an ex-farmer, eggs in one basket and you drop the basket, it's a big mess," he said.

Boost announced for interstate tourism

The WA Government today announced a $2.85 million investment in tourism to "entice interstate visitors to WA" as a way of offsetting the impacts of fires and the coronavirus outbreak on tourist numbers.

A recent survey by the WA Tourism Council conducted prior to the coronavirus outbreak recorded 67 per cent of WA tourism businesses had seen cancellations and a fall in forward bookings.

That was attributed to a misconception overseas that the entire country was in danger due to east coast bushfires.

Council chief executive Evan Hall said the coronavirus outbreak had made things worse.

"Particularly the Central Chinese Government measures to stop group travel and discourage people from travelling out of China is having an immediate effect on businesses for cancellations and forward bookings," he said.

"So we congratulate the State Government on this immediate and substantial investment in marketing, particularly in the domestic market."

Tourism WA was also scaling back its spending on advertising in China until travel limitations were lifted.

Declining confidence in air travel

Australian Hotels Association WA chief executive and director at Tourism Australia Bradley Woods said while he expected the Australian tourism industry to fare comparatively well, operators were being urged to prepare for the worst.

Mr Woods explained a key problem was declining confidence in the safety of air travel caused by viral outbreaks.

"When SARS occurred it certainly provided a real impact on the industry, there was doubt around travel both internationally and some domestically," he said.

"The impact was across the board, we did see during the period of the height of the SARS virus a substantial downturn in accommodation, travel and tourism activity, but importantly that didn't translate into intra-state activity with Western Australians holidaying in their own backyard."