Hotel occupancy rates are forecast to be slashed in half this year as the crippled tourism industry reels from coronavirus.
Tourism Accommodation Australia expects occupancies to sit at 40 per cent, down from pre-pandemic levels of about 78 per cent.
"We're still a few years away from getting back to there," chief executive Michael Johnson told a parliamentary committee on Thursday.
He said room occupancy rates could return to about 55 to 60 per cent in 2021.
The closure of international borders, cancelling of major events and the lack of business travel are all causing the drop in rates.
"So we're very reliant on domestic leisure. That's quite limiting," Mr Johnson said.
The fact many Australians have been forced to exhaust their annual leave during lockdown will also hurt tourism rates.
The Northern Territory and far north Queensland will experience skills shortages due to a lack of temporary migrant workers.
"Maybe Australians aren't as keen to get to work in those places," Mr Johnson said.
He suggested the federal government find ways to entice workers to areas worst-hit by skills shortages.
But he said while there should be a focus on getting Australians back to work, the tourism sector would still need international workers once borders reopened, with Mr Johnson pointing to chefs as an example.
"I've been in the industry for 40 years and we've never had enough chefs," he said.
"We'd still be looking to bring in that skilled labour from overseas because it also assists us in growing our own chefs."
Mr Johnson expects big chains to slash staff post-pandemic as they grapple with diminished demand for hotel and motel rooms.
He believes the big players will redeploy metropolitan staff to regional sites.
Domestic tourism campaigns would also deliver for regions, Mr Johnson said.
"I think our regional tourism will perform better than our metropolitan tourism over the next six to 12 months," he said.
The Queensland Tourism Industry Council said government subsidies for tourism operators couldn't replace revenue from domestic tourism in the long term.
"The operators are suffering right now, and they really need to come up for air," chief executive Daniel Gschwind told ABC on Thursday.
"Ultimately we have to generate that revenue again."
He expected Queensland Premier Annastacia Palaszczuk to make more announcements on eased restrictions on Sunday.
"We're confident that the premier understands the importance of getting our industry going as a main driver ... for the economy across the state," Mr Gschwind said.
Australian Associated Press