Transport Minister Scott Emerson yesterday raised concerns about the subsidies paid for passengers on the Westlander Train between Brisbane and Charleville, and on the service between Mount Isa and Townsville.
The State Government currently subsidises 16 long-distance coach routes, 10 air routes and the Travel Train network.
He says there is a push in some regions for more subsidised bus and air travel.
"The Westlander and inlander rail services are subsidised by more than $2,000 per journey," he said.
"I've already heard local mayors saying they would prefer that money was reduced and go into air and coach services into their local areas."
Central Queensland's tourism industry says train travel is still an important part of the state's travel market.
Mary Carroll from Capricorn Enterprise says the level of subsidy is nowhere near that high on the Spirit of the Outback between Brisbane, Rockhampton, Emerald and Longreach.
"The Spirit of the Outback has always had a very high experiential appeal to it," she said.
"Train travel is about the experience as opposed to just travelling from 'A' to 'B' often.
"Train travel is certainly a very important part of the tourism portfolio of Queensland and of course for transporting people from 'A' to 'B'."
The Outback Queensland Tourism Association (OQTA) says cutting passenger train services in remote areas would have a dramatic impact on the tourism sector.
OQTA general manager Lloyd Mills says while numbers travelling by train have declined, it is still a significant transport option to outback centres.
He says pensioner subsidies to travel on the train may not be sustainable at their current rate but train services remain vital.
"At the end of the day, we don't want to put any hurdles in the way of getting people to the outback," he said.
"Speaking to the operators this morning that are going to be impacted - those down in Quilpie, Charleville and Longreach as well - they've made massive investment in tourism over the years.
"To have this threat hanging over them, potentially it will close those businesses, that is how important it is."
He says pensioners can travel long distances for less than $20 and that may be contributing to the big subsidies being paid by taxpayers.
"Now if people have a choice to travel on rail, then the price might need to go up, that may be an issue," he said.
"I am not a pensioner but if I could pay $12 per sector, and that might be $12 from Brisbane to Charleville, or that might be $12 from Brisbane to Longreach, that is a substantial discount and you have to question whether that is sustainable."
Murweh Mayor Denis Cook says the Government should consider moving freight on passenger trains to help ensure they are sustainable.
He says Queensland Rail freight is now moved to western communities via road but that does not make sense given the poor state of the road network.
"Before on the Westlander they used to have about three freight wagons but not any more," he said.
"Maybe that would defray the cost if they had some more wagons on the back of the Westlander.
"There's only about six or seven carriages on it and they used to have four freight wagons on behind it but they just bring it in in trucks now."
The review is expected to be finalised later this year.