Australian Hotels Association General Manager Steven Fanner said the city would turn into a "ghost town".

"Pubs, hotels and restaurants that would usually look forward to the Melbourne Cup as a strong trading day are doing the sums and deciding its not even worth opening the doors," he said.

They would lose the corporate lunch trade and would also have to pay their employees holiday rates.

The holiday would also hit hotel occupancy levels, as "business travellers are reluctant to travel during short weeks".

The holiday was a "political stunt by the ACT Government to undermine federal workplace laws", with his members "caught in the crossfire". Chamber of Commerce boss Chris Peters said he also did not favour the holiday.

Mr Peters agreed hospitality businesses would suffer losses and said workplace culture would be affected.

"The Melbourne Cup has a strong tradition of bringing together the workplace in a social environment ... there has been widely expressed community concern that this will be missed this year," he said.

"People will lose the opportunity of interacting with their work colleagues for a fun day."

Many people were also likely to take the Monday before the holiday off work to have a four-day long weekend.

A Murrays Coaches spokesman said bookings were up for Tuesday, with may people returning to Canberra from Sydney.

"Normally Tuesday is a quiet day for us, but we have put on extra coaches to meet the need," he said.

Despite fears there would be fewer corporate marquees at Thoroughbred Park because of the holiday, chief executive Peter Stubbs said bookings had increased. However, with an extra 240 staff excluding security recruited for Melbourne Cup Day each year, Mr Stubbs said the costs of paying public holiday rates would be $40,000 more than in previous years.

ACT Industrial Relations Minister Andrew Barr said there had been consultation in the lead-up to the implementation of the holiday, with the Government first going to public consultation on an additional public holiday in July 2006.