Far North Queensland tourism businesses say federal changes to working holiday visas are already driving backpackers away, with employers warning they may not be able to keep up with demand in future peak seasons.
Geoff York, chief executive of Crystalbrook Collection, which runs hotels, restaurants, bars and a day spa in Cairns, said some second-year working holiday-makers had already left. He said 45 per cent of the company's 500 employees were on working holiday visas.
Mr York said many workers would not risk another six months of regional work for a chance to qualify for a third-year visa under the new ballot system.
"It's a one in six chance that you'll qualify, so that's not good," he said.
Mr York warned the industry could face shortages similar to those experienced during the COVID-19 pandemic, saying he had two 300-room hotels and might only be able to fill them to 250 rooms, despite "tremendous demand".
The federal government is progressively rolling out changes over the next 12 months that cap 462 working holiday visas and require applicants to enter a ballot for first, second and third-year visas. Backpackers wanting a second-year visa must currently work 88 days in regional or remote Australia.
Tourism Tropical North Queensland chief executive Mark Olsen said the industry wanted the changes scrapped.
"It is our school holidays. This is one of our peak seasons and we've got staff who are leaving the region," he said.
Mr Olsen said working holiday-makers from various countries brought language skills essential for visitor safety in activities such as skydiving, bungee jumping, diving, snorkelling and whitewater rafting, and that the industry relied on workers staying long enough to build skills in roles such as dive masters.
He rejected the argument that backpackers contributed to housing shortages, saying 90 per cent of their accommodation was in hostels or on farms.
Cairns Chamber of Commerce chief executive Patricia O'Neil said the cuts would also be "devastating" for aged care, childcare, labour and construction.