An evidence-based approach is needed for introducing restrictions in the north west, according to hospitality industry figures.
Pubs, restaurants and hotels in the Derry and Strabane council area face new restrictions after a spike in cases there.
However, hospitality businesses are calling for evidence on what has caused the rise in cases.
Derry Chamber called the decision "bitterly disappointing."
From next week, for at least a fortnight, pubs, cafes, restaurants and hotels will only be able to open for takeaway, delivery and outdoor dining
Redmond McFadden said the measures would place "greater pressure on our already struggling businesses".
"This is a bitterly disappointing step that the executive has been forced to take to curb the virus spread across the north west," he said.
"The dramatic spike in cases over recent weeks has been deeply concerning for everyone in our region and we support the executive in taking steps necessary to save lives, protect the public and support our health service.
"However we have to acknowledge that the consequences of these measures will mean greater pressures on our already struggling businesses and may sadly lead to business closures and job losses, particularly in the hospitality sector."
Johnny Kelly from the Fir Trees Hotel in Strabane, County Tyrone, said the area was considered "one of the safest places on this island to do business in and to live in" a few weeks ago.
"I'm not so sure that this is really being driven totally or uniquely by the hospitality industry," he said.
"We have been open for three months, we have had 40,000-plus visits to the hotel over that period of three months.
"We have had absolutely no incidents of Covid-19 amongst the very loyal customer base that we have and absolutely none amongst our staff.
"If we impose these restrictions now and then go back to the way we were in two weeks' time, three or four weeks' time without anything else changing, by implication we will be here again and again and again."
Colin Neill from Hospitality Ulster said many businesses would not be able to continue trading under the new rules.
"They won't be able to meet the requirement, such as outside space and with the weather getting colder, this will no longer be viable," he said.
"Donegal placed at level three status means that this entire north west area will effectively limp along."
Jim Roddy, a city centre initiative manager in Londonderry, said there had been no indication that hospitality was to blame for the rise in cases.
"It's worrying if it's just stopping people going out to hospitality when earlier on in the week, we were talking about household transmission as opposed to transmission through hospitality," he said.
"We had a fantastic month in August with the eat out to help out scheme, the restaurants were packed and we didn't see a spike.
"We've seen a spike in the last number of weeks in the city and we really need to find what the cause of that spike is and deal with the cause."
SDLP leader and Foyle MP Colum Eastwood urged people in the north west to follow the new regulations, but said backing was needed for businesses affected.
"Government cannot restrict trading opportunities in the north west without additional support for businesses that will close and workers forced to be at home," he said.
"I will be pressing very strongly for a support package to meet the needs of people in Derry and Strabane who are being asked to make more sacrifices."