BACKPACKERS are being encouraged to bypass Hervey Bay and explore Fraser Island from Rainbow Beach instead, after one tour company shut down its local operations this week.
All Nomads Fraser Island Tours will now depart from Rainbow Beach, with pre and post tour accommodation supplied by a backpacker hostel in the town.
Nomads told local stakeholders "popular demand" led to the decision to suspend all tours from Hervey Bay, but repeated requests by the Chronicle to obtain further details have gone unanswered.
The move is a blow for accommodation providers, restaurants and retail businesses in Hervey Bay with the tourists no longer staying in town and spending their money.
Mark Juppenlatz, manager of Next Backpackers in Torquay, will be one of the first to suffer as Next was providing accommodation for Nomads' tour-goers.
"Next Backpackers is disappointed Nomads has moved from Hervey Bay and it will mean a few less bed nights for us," Mr Juppenlatz said.
"But the industry has been in a slump before and we'll be doing some restructuring to combat this in terms of our staff, hours of operation and marketing.
"Just about every major player in the backpacking market is now operating in Rainbow Beach, but the guys that are in town will continue to fight and do what we can to survive."
Hervey Bay Chamber of Commerce president Brendan Whebell said local business would suffer under Nomads' departure.
"It's a shame that an organisation like Nomads can't see the full potential of our region."
Meanwhile, three British tourists who were due to attend a Nomads Fraser Island tour had to shell out $180 yesterday to travel from Hervey Bay to Rainbow Beach.
The stranded backpackers say they were forced to hire a limousine to transport them back down the coast.