Noise complaints from guests staying in a hotel earmarked for the centre of Civic could kill off nightlife in the area, advocates say.
The head of MusicACT and founder of the Art Not Apart festival, David Caffery, said an overhaul of noise complaint legislation was needed in order for Canberra's bars, clubs and live music venues to survive.
The calls come after development company Geocon last month re-submitted its application to build a hotel in Garema Place, with the $120 million proposal to include 215 rooms for guests.
Mr Caffery said if hotel guests made noise complaints about nearby bars and clubs, businesses would be powerless to appeal the complaint and could be heavily fined.
"It depends on the businesses, but they would either be shut down or seriously affected," Mr Caffery said.
"We know that Garema Place is an active space, and [the ACT government] have spent money on policies trying to bring life into the area, but the noise laws are contradicting it."
The night-time limit for noise in Canberra under existing legislation is 50 decibels, the same level as a conversation at home.
Mr Caffery said the arrival of a hotel into Garema Place would turn the area into a more residential zone, putting businesses at risk of complaints.
He said the way that noise complaints are measured should change.
"Music ACT isn't suggesting we should have louder noise limits, but we should have areas where noise is measured inside an apartment with the windows closed, which is currently not a legal option," Mr Caffery said.
"The current laws are archaic compared to everywhere else, because other places have updated them."
The hotel proposal would see an 11-storey building built in Garema Place, taking in Canberra institution Gus' Place cafe.
The proposal was the third Geocon has put forward to the ACT Planning and Land Authority.
The second iteration was given the green light by the ACT government last year, but Geocon reworked the plan after the buying the site next door, which included Gus' Place.
The reworked development application has yet to be approved by the ACT government, however the developer said it expected construction would be able to start in early 2020 if it was given the thumbs up.
Mr Caffery said as Garema Place became more residential, the ACT government should consider setting aside other areas in Canberra to be used as entertainment precincts.
"We need to let people choose the night out they want," he said.
"There's nowhere in the city for music venues to open in the future, and we need more diverse music venues. We just don't have the place to construct them."
Mr Caffery's comments come as ACT Greens leader Shane Rattenbury said earlier this week that Exhibition Park, or EPIC, should be slated as an entertainment precinct.
Mr Rattenbury has called for the area to be safeguarded against future residential development, and said having EPIC as an entertainment precinct was a viable option.
"In areas like Fortitude Valley in Brisbane, entertainment precinct laws have helped ensure that these vibrant mixed-use areas work for residents, nightclubs, live music venues, cafes, restaurants, hotels and retail businesses," Mr Rattenbury said.
"Entertainment precincts help to protect the long-term future of the music and entertainment industry without exposing residents or businesses to unreasonable or unexpected levels of noise."