Hotel Warrnambool owner Steve Phillpot described the situation as "just nuts" with half his staff not due for their second jab for a few weeks.

Best Western Old Maritime Motor Inn's Raj Patel, whose staff are not all yet fully vaccinated, said it was a "kick in the guts".

"I'm just over it," he said.

"We have waited so long to open up and then at the last minute, two days before, we have to call and cancel the bookings. I've got parties booked in.

"I just want to cry, I just don't know what to do. I have to be strong for my staff.

"My chef is not going to be double-vaxxed until next Saturday, and my waitress is not going to vaxxed until the following Saturday."

Mr Patel said he lost money every day he was open, but kept operating just to serve his accommodation guests and keep his workers in a job.

"There's no communication. It was bad. Two days before, it's just not right," he said.

On Sunday, Premier Daniel Andrews announced regional hospitality businesses could increased their limits for up to 30 fully vaccinated patrons inside and 100 outside from Friday, bringing relief for struggling businesses.

But hospitality businesses say they have been caught out after they were initially told staff wouldn't have to be fully vaccinated.

Mr Phillpot said the government originally set a deadline for hospitality businesses to ensure all staff had their first dose by last Friday and were to be fully vaccinated by November 26, and his staff would have been.

"They were the rules that were set out by the government, 48 hours out and they change the rule," he said.

Mr Andrews on Tuesday said all hospitality staff had to be fully vaccinated, a ruling that has caused havoc across the sector, especially in Melbourne where businesses were preparing to open up for seated dining for the first time in months.

It's also a bitter blow for Mr Phillpot, who has been operating under unviable conditions for about a month just to keep his employees in work.

"It's just nuts," he said. "Another Dan Andrews change. We won't be able to service the demand. We haven't got enough staff to service 30 inside and 50 people outside."

So instead of increasing the number of patrons when the caps are lifted on Friday, he said he would have to revert back to the square-metre rule which restricted his business to 10 people inside and 20 outside. Mr Patel will only be able to cater for 10 people.

"We'll have to operate under the old rules," Mr Phillpot said.

"If they are not double-vaxxed we will have to operate with 10 inside and 20 outdoors, so we will just have to keep doing that."

Mr Patel said he did not want anyone to get sick or be on ventilators because of opening up too early but said "let's have some common sense".

City Memorial Bowls club general manager Julie Dosser said she was lucky that all but one of her casual staff members were already fully vaccinated.

But she questioned why the rules were not being relaxed further in Warrnambool where vaccination rates were more than 95 per cent first dose and 79.8 per cent second dose.

"It's just absolutely ludicrous," she said.

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