A far north Queensland motel says it has been left out of pocket by the Department of Prime Minister and Cabinet over a last-minute cancellation, and the owner blames Tony Abbott.

Thursday Island's Jardine Motel manager Steve Mills had reserved a significant number of rooms at the department's request ahead of Mr Abbott's visit this week.

Mr Abbott is visiting the region as part of his annual week in Indigenous communities, around eight ministers were due to join him at various points on the trip.

Mr Mills said he was only notified less than two days before check-in that more than $53,000 worth of accommodation would not be required.

Mr Mills said the department booked 44 rooms for seven nights, from August 11 to 17, but only ended up staying in up to 11 of those rooms.

The rooms cost about $220 per night.

Mr Mills said he has been left out of pocket because he had to turn away many prospective customers from the remote motel.

Aside from the loss of income, Mr Mills said he had to turn away sick people who had wanted to book at the hotel for appointments at the nearby hospital.

The department said it was in discussion with the motel to finalise a fair and reasonable cancellation fee to cover any inconvenience.

Going at it 'like an Anzac at Lone Pine'

Mr Mills said he was seeking the full $53,000.

"I feel very cynical and very jaded," Mr Mills said.

The motel, which the Prime Minister's Department booked more than 40 rooms, only to stay in less than a dozen. ( Supplied: Jardine Motel )

"This is allegedly 'the small business Prime Minister' and the 'Indigenous Prime Minister', and he's absolutely rolled over one small business and rolled over us very heavily.

"I feel very let down, betrayed.

"It's all because they didn't want to do the brain thing of figuring out how many rooms they actually needed.

"Would have Mr Abbott known about it? No. Do I blame him for it? Yes."

"I'm going to go at it like an Anzac at Lone Pine.

"We've been stiffed and stiffed hard."

Discussions to finalise fair and reasonable cancellation fee

A spokesperson for the Department of Prime Minister and Cabinet said it had been responsible for making arrangements for Mr Abbott's trip.

This included accommodation arrangements for departmental staff, media representatives and other guests at the motel.

The spokesperson said a number of rooms at the motel would be used over the full period of the department's booking.

The department had been in discussions with the motel proprietor to finalise a fair and reasonable cancellation fee to cover any inconvenience caused by some of the held rooms not being required.

The spokesperson said the department had always acted in good faith in its dealings with the motel.