Hotel reimbursed $37,000 for Abbott rooms

Taxpayers forked out tens of thousands of dollars to a Torres Strait hotel left out of pocket when the government cancelled bookings for Tony Abbott's trip to the region.

The Department of Prime Minister and Cabinet has confirmed it paid out $37,000 to the Jardine Hotel, which claimed it lost $53,000 in bookings immediately before the former prime minister's visit in August.

Department first assistant secretary Caroline Edwards admitted the hotel had been given notice very late, but argued the cancellation payment was "a lot less" than the cost and reasonable in the circumstances.

Ms Edwards said as soon as the department had become aware of the losses claimed by Jardine, a senior officer was appointed to come to a "reasonable accommodation".

The department weighed up the disadvantage suffered against the "prudent" use of public money in determining the payout figure.

However, the department maintains no formal bookings were made throughout the reservation process.

"But an expectation had arisen," Ms Edwards said.

The Thursday Island hotel claimed 33 rooms were cancelled, at a cost of about $220 per night.

Owner Steve Mills at the time said he'd had to turn away other visitors.