Hello @A.Traveller, welcome to the community.
While this thread is about a temporary water outage, it is worth reading for background information:
and what it means for you if you decided to cancel.
Usually with natural disasters, they are called force majeure events. This basically means the liability associated with such events is reduced.
What is interesting to note is the government (State and Commonwealth) have been advising tourists not to cancel their travels as north Queensland is open for business, with some disruptions. This messaging, along with updates from utilities, is what many tourism providers may be listening to and relying on when passing on information to travellers.
I agree with @syncretic that you should discuss the loss of water with the accommodation provider. They might have temporary solutions to overcome the outage such as bottled water, alternative showering and more regular bathroom servicing. If they can’t or unwilling to provide alternatives, I would raise with them the option of them looking for accommodation for you in an area less impacted. I would be reluctant to cancel the booking as cancellation conditions attached to the booking would apply. If you cancel you might also be stuck without any accommodation, where the risks are substantially higher at the moment. If there is to be a cancellation, it should be instigated by the accommodation provider.
The other option is if you have domestic travel insurance is to contact them to see if the cover includes disruptions from natural disasters.
