The annual total tourism spend across the Corangamite, Moyne, Warrnambool, Surfcoast, Colac Otway and Glenelg areas dropped the most in regional Victoria for the six months to June 2020, compared with 2019, the findings say.

There were 666,000 fewer domestic visitors and 75,000 less international overnight visitors - the biggest single losses in volume statewide.

The Great Ocean Road has faced significant challenges replacing the international tourism market with domestic visitors, the state government's inquiry into the pandemic's impact on tourism and events found.

The biggest declines were in midweek visitors, amplified by international border closures and school camp cancellations.

The inquiry heard border closures also accelerated skill shortages in the hospitality sector, further impeding the tourism sector's ability to recover while a lack of affordable housing created hurdles for employers sourcing workers.

Uncertainty about lockdowns and mental health challenges are among the sector's ongoing challenges but the innovation of many operators has been one shining light, the inquiry found.

One recommendation was for the government to consider further support with its Business Support Fund excluding sole traders and some operators because of their business structures.

Accommodation operators suggested governments ramp up infrastructure projects to lift occupancy but also flagged that a long-term recovery required new drawcards for domestic visitors.

As Victoria's sixth lockdown eased on Tuesday Port Campbell's Southern Ocean Motor Inn owner Asip Memishi told The Standard the seesawing health restrictions were disheartening.

"We start getting a bit of momentum and it stops again," Mr Memishi said.

"It is really depressing for all of us."

Compared to his second business, the Coastal Motel in Apollo Bay, he said the Port Campbell motel had fared far worse in appealing to the domestic market and revenue was down 55 per cent on normal trading.

"We are really suffering in Port Campbell," Mr Memishi said.

"I think people aren't focusing on the Twelve Apostles at the moment, they are more going out to restaurants and cafes, that's the difference between them both."

He said more advertising campaigns and festivals could help but he saw people getting vaccinations and international borders opening as the only silver bullets.

"Visitor numbers pre-COVID were around 91 per cent year round; you never thought this could happen," Mr Memishi said.

He said he would support domestic travellers using a vaccine passport to travel if it meant more visitors would travel regionally and interstate.

Warrnambool Wildlife Encounters owner Zara Altmann, who opened the business with partner Joshua in December, said a lack of international visitors had limited the business to mostly weekend tours.

"We are lucky during the weekends the Warrnambool community has got onboard," she said.

"When things open up fully again we will be a lot more prepared for the influx of people."

Ms Altmann said the business had held off on committing to any major expansions because it was "too uncertain" to invest the money.

Great Ocean Road Regional Tourism general manager Liz Price said south-west Victoria was the biggest market for international tourism outside Melbourne.

"There are parts of the region like Princetown and Port Campbell really hurting from the loss of the international day tripping market," Ms Price said.

"There remains nothing open in Princetown because there isn't the demand to justify opening."

She said she supported an inquiry recommendation to provide a scheme offering insurance for events unable to go ahead due to restrictions.

"So many of our events are run by an army of volunteers that we are losing because the events have no certainty," Ms Price said.

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