"We need to stand strong. We are going to lead our nation out of the pandemic ... we are ready," Dominic Perrottet said on Monday.

"We need to also move away from fear and move to hope and confidence."

NSW Health is urging people to keep wearing masks indoors and a chorus of health experts is calling for a return to mask mandates indoors, as nervous people cancel or reconsider summer holiday travel plans.

But a week after mask requirements were removed for all but the highest risk settings, the premier says it's time for "personal responsibility".

"We are treating the people of our state like adults."

Meanwhile, there are long queues at testing facilities as people seek reassurance they won't be in isolation for Christmas and pharmacies and shops are running out of Rapid Antigen Tests.

NSW recorded 2501 COVID-19 cases in the 24 hours until 8pm on Sunday - a drop of 65 cases on the previous day's record high of 2566.

However, the number of people in hospital is gradually creeping up and health experts say cases will explode in January without a return to some restrictions.

There were no deaths on Sunday, but there are 261 patients in hospital - up from 227 - and 33 people are in ICU, an increase of five.

Newcastle remains the epicentre of the Omicron cluster with more than a quarter - 660 - of the new cases recorded in the Hunter.

Immunologist Dan Suan says the Omicron variant is much more contagious than any previous strain.

"Sydney is sleepwalking into a catastrophic disaster in January if we don't do something about it right now," he said in a Facebook post.

"The only people that are really really protected from the Omicron infection are people who have a normal immune system and have been triple vaccinated."

With Christmas fast approaching, Mr Perrottet says case numbers are bound to rise and everyone is "likely to have a close encounter with COVID".

"We are taking a balanced and proportionate response" and the government will adjust its settings if required, he said.

The premier again urged people to get a booster shot, saying state vaccination hubs will remain open over the Christmas break.

Of the 33 people in ICU, 26 are unvaccinated.

"Look at those numbers. They don't lie. It is the best way to protect you and your family," he said.

Chief Health Officer Kerry Chant is urging caution this Christmas and recommended using a RAT before going to an indoor gathering.

"Choose outdoor, well ventilated places for gatherings and limit the size of those gatherings," she said.

Meanwhile, a survey commissioned by the Tourism & Transport Forum has found four out of five Australians have now either cancelled or are undecided over their summer holiday travel plans, while one in two have no confidence in travelling interstate.

CEO Margy Osmond said the national survey of 1500 people revealed the concerns of three-in-10 Australians had increased following the emergence of Omicron, with the same number either cancelling or postponing their travel plans.

Seven out of 10 are waiting for more information before making a decision.

REX Airlines deputy chairman John Sharp said people had been cancelling Christmas travel plans.

"They're either nervous about catching coronavirus or alternatively worried that they might be in a close contact to somebody who has got coronavirus and therefore they will be put into quarantine," he told the Nine Network.

A total of 144,368 tests were carried out and 94.9 per cent of people aged 16 and older have had one dose of a COVID-19 vaccine, while 93.4 per cent of people are fully jabbed.

More than 81 per cent of people aged 12-15 have had one dose of a vaccine and 78.1 per cent have had both doses.

Australian Associated Press