Australian trade groups Accommodation Association and Tourism Accommodation Australia have added their voices to warnings of spiralling airfares if Virgin Australia collapses.
They say it is imperative to save Virgin Australia to ensure a competitive airline market, or tourism will suffer.
"Having a competitive domestic airline market is essential to the future growth and recovery of the tourism accommodation sector," said Accommodation Association CEO Dean Long.
If Qantas is allowed to operate a monopoly, airfares will rise and all sectors of tourism will suffer, including the hotel industry, it said.
Tourism Accommodation Australia National CEO Michael Johnson said: "Hotels in regional destinations in particular, such as Cairns, are heavily reliant on both Virgin and Qantas and the existing competition between both. The last thing they need is for a national carrier to collapse."
Virgin Australia went into voluntary administration on Monday after the federal government refused to provide a A$1.54 billion loan.
The airline has debt of about A$5 billion.
