The Royal Hotel Queenscliff.

Queenscliff's Royal Grand. Photo: Michael Clayton-Jones

IN THE late 1880s, Queenscliff was the tourism mecca for Melbourne's elite. Arriving on the Ozone paddle steamer, visitors flocked to stay at the glamorous Vue Grand, Royal or Baillieu (later renamed the Ozone) hotels.

Two of these grand, colonial-era buildings are looking for a different clientele now.

In a prime position in the town's main shopping strip, the heritage-listed Vue Grand is for sale with a price tag about $4 million.

The Age Saturday News 46 Hesse Queenscliff.

Queenscliff's Vue Grand.

Around the corner in King Street, its towered Italianate cousin, the Royal, has been taken off the market, although the owner was still ''open to offers''.

Several years ago, another grandee in the popular holiday town on the Bellarine Peninsula, the Ozone, was converted into apartments, despite resistance from locals, when its owners declared it no longer viable after more than 125 years of trading.

There are fears a similar fate may confront the Vue Grand or Royal although both owners insist the hotels are viable.

Graham J Christie outside the Vue Grand Hotel in Queenscliff which is for sale.

Queenscliff's tourism chief Graham Christie. Photo: Michael Clayton-Jones

''Since the marina at Queenscliff opened up … business has picked up significantly,'' said Vue Grand owner Anthony Closter, who would like to continue running the business if the building was sold.

''The business market has dropped off but the leisure and tourism market's picked up,'' he said.

Strict heritage controls that cover much of the town could limit what can be done to the hotels, said Graham Christie from Queenscliff's tourism association.

More people were visiting Queenscliff overnight, but fewer were staying for longer periods, which was impacting on the larger hotels, he said.

''Most of them have got magnificent dining. We don't need to lose any of that,'' he said.

True to its opulent origins, the Vue Grand has 32 guest rooms (one a turret suite), an elaborate foyer and soaring 10-metre ceilings in its grand dining room that can seat 160.

The slightly more modest Royal has 11 rooms at the top of a grand staircase, with a public bar, pool room and large bistro below.

''It's not a case of shutting it down and turning it into apartments,'' said 21-year veteran publican and Royal owner Steve Wilson.

''There's a longevity among Queenscliff publicans. When you buy something like that you do have an emotional attachment to the building … You tend to stay there, restore them and hang on to them.''

In the past year, Queenscliff had 25 house sales, ranging in price between $485,000 and $1,537,500, Real Estate Institute of Victoria figures show.

Melbourne's property market has struggled with falling prices and weak demand.

About 580 auctions and 600 private sales were expected this weekend, the REIV said.