The future of the region's peak tourism body is under a cloud with a summit in the next six weeks likely to determine its fate.
Blue Mountains, Lithgow and Oberon Tourism (BMLOT) failed to secure $80,000 in anticipated NSW government funding last month, putting its already strained financial situation under more pressure.
Blue Mountains mayor Mark Greenhill said an industry summit was the most "prudent" way to manage the fate of the tourism body.
"A knee-jerk reaction to the situation could damage the local economy. Equally, we can't let the situation continue as is," he said.
With Blue Mountains City Council contributing roughly $200,000 each year to BMLOT, the mayor said the situation had to be resolved.
"It is true that we are concerned about the situation BMLOT is in," he said. "It is also true that we are the biggest financial contributor so we have a right to express that concern."
New BMLOT chairman Jason Cronshaw of Fantastic Aussie Tours - who took the reins last month after former mayor Daniel Myles stepped down from the role - said BMLOT might not survive in its current form.
"I'm happy to listen to anything the industry and the council wants, going forward. Whether that's BMLOT or a new entity... there's a whole range of possible options," he said.
Despite Destination NSW knocking back BMLOT's $80,000 funding request, Mr Cronshaw said the long-term funding outlook for local tourism was positive.
"Destination NSW has confirmed there's no problems with their funding for next year," he said.
BMLOT's financial problems stem from large expenditure that marked the bicentenary of Blaxland, Lawson and Wentworth's crossing of the Blue Mountains in 2013 - a cost the group was unable to recoup from the state government.
"The organisation has come through a lot of spending with the bicentenary and the bushfire recovery. It's no secret that there's been a few financial hurdles to overcome, but with what Destination NSW has told me, I don't see any hiccups [in the future]," said Mr Cronshaw.
The group's financial troubles caused ripples at neighbouring Lithgow Council last week, with Lithgow mayor Maree Statham distancing herself from the tourism body.
Clr Statham said Lithgow Council had indicated its concerns about the situation and would not be providing any additional funding for any 'bail out'.
Lithgow Council and Oberon Council's combined annual contribution to BMLOT is approximately $50,000.
"We have also been concerned for some time at the lack of adequate support for Lithgow tourism which questions the value of our involvement," she said.
Clr Statham believes Oberon Council has the same concerns.
"We're concerned at the situation that has developed and are waiting to see what eventuates before committing ourselves further," she said.
But Blue Mountains mayor Mark Greenhill said it was "important to be considered and careful in matters like this", stressing the industry summit was the best way forward.
The summit is likely to be held in late April or early May, with the matter expected to come before Blue Mountains City Council's May meeting.
- with Lithgow Mercury
