The industry says government investment in projects and targeted tourist campaigns are crucial to its recovery.

While demand for rooms in the territory has picked up in the past few weeks from domestic travel, hoteliers have acknowledged it will take some time to get back to pre-coronavirus demand.

For the projects in the pipeline, the future could be uncertain. It has been reported Geocon postponed the development of its three hotels this year - a Belconnen hotel, the heritage West Block in the Parliamentary Triangle and, most notably, its Garema Place hotel.

The Australian Hotels Association last year forecast the number of hotel rooms in Canberra would grow by 30 per cent over a two-year period, from 6600 to 8800.

The ACT Planning Authority has approved 12 hotels in the territory over the past five years, with a combined total of almost 2000 rooms.

On Commonwealth land, the National Capital Authority has approved four hotels, all of which are a part of mixed-use developments.

Not all the approved hotels eventuated, including a $20 million hotel proposed for Bruce and a 227-room hotel in Forrest as both development approvals have lapsed.

Some such as Geocon's Garema Place hotel had not started construction but others already under construction before the pandemic hit are pressing ahead.

The $300 million Constitution Place development in the city will include a 130-room Adina hotel. Developer Capital Property Group's head of property Richard Snow said it was on track to open when the build is finished in November.

"It's at a stage where we started construction two years ago so the train had already left the station in terms of having any decision about shall we or shall we not build it," he said.

"But that being said we certainly think November is a positive landscape for the reemergence of tourism in Canberra.

"We think the location of that hotel in Canberra and in that precinct where you are in the middle of the CBD, its proximity to the theatre, new food and beverage precincts plus the office precinct that is around it.

"There are going to be enough drivers there we think to be successful."

On the back of the being named by Lonely Planet as the one of the world's top 10 cities to visit in 2018, Canberra started to emerge as a serious tourist destination.

Canberra's tourism numbers hit a record high as data from Tourism Research Australia showed 5.48 million visitors came to capital in the year to June 2019.

As a result, some of the world's biggest hotel names had their eyes on the nation's capital.

Marriott made its first foray into the Canberra market last year when it teamed up with Geocon on the developer's Midnight Hotel in Braddon.

The Sebel brand also came to Canberra, when local developer Zapari Group finished its 144-room hotel in the city. Earlier this year, it was purchased for $48 million by a German fund manager.

As well, iconic hotel brand Hilton last year pitched to the ACT government a $200 million development at City Hill, however this was rejected.

One of Australia's largest developers, Meriton, flagged its interest last year. It sought community consultation for a 16-level, 250-room hotel in Allara Street.

Meriton did not respond to questions from The Canberra Times around what planning stage its project was at, a spokeswoman only replied the company did not have an update at present.

Geocon also had three proposed hotel developments in the works that were set to start construction but have been postponed. Most notably, its high profile luxury Garema Place Hotel.

The hotel, which is set to see demolition of the existing Bunda Street site, will have about 200 rooms.

It is understood the developer intends to continue with the project but it is not known if construction will start by the end of the year, which is what the developer anticipated in January.

Geocon would not comment on the fact its three hotels had been held up due to the pandemic.

Instead a spokesman said: "The hotel industry, the capacity to travel and tourism in general have all been negatively impacted by COVID".

Australian Hotels Association ACT general manager Anthony Brierley said if new hotels entered the market it would result in a lull in occupancy and asking rates.

"Canberra saw a big increase in hotel stock throughout the start of 2019," he said.

"There are still some sites currently under construction, and when these projects open they will put more downward pressure on occupancy levels and on average daily rates.

"We're going to need a strong, well funded and targeted tourism marketing campaign to be able to fill these rooms."

Mr Brierley said there had been lots of speculation about possible hotels over the past 12 months but these may no longer be viable.

"I think it's to be expected that with the ongoing restrictions on movement affecting leisure and business travel, the return on investment for these projects may no longer stack up as commercial accommodation," he said.

Tourism is not the biggest driver of Canberra's hotels with the business and political market keeping rooms occupied throughout the week.

"With Parliament and so many government departments, business travel has always been a key component for mid-week hotel bookings," Mr Brierley said.

Hotel demand has increased in recent weeks as NSW loosened regional travel restrictions but occupancy is still only at about 50 per cent of its normal levels.

"Last week we saw occupancy of 40 per cent, which is double the occupancy we saw throughout April and May," Mr Brierley said.

"However we're still about halfway off our normal occupancy levels and the average daily rate is under a lot of pressure.

"No doubt the return of guests from NSW has helped but we also need border restrictions to be lifted around the country as well as the introduction of the much talked about Canberra-Wellington bubble."

Across Doma Group's five hotels in Canberra, occupancy dropped to as low as 20 per cent during March and April, down from its usual 85 per cent, Doma head of hotels Patrick Lonergan said.

He said most of those staying at the hotels during that time were people who had moved back from overseas due to the pandemic and had not yet found a place to stay.

Doma Group has been one of Canberra's largest hotel developers over the past decade. It has four hotels in Barton and serviced apartments in Kingston.

While the developer has no current plans to build a hotel in the nation's capital at present Mr Lonergan said it would depend on projects such as a new stadium or convention centre being built in Canberra.

"I think there's every opportunity that we could do another hotel I'd say it's going to be probably contingent on government investment so if there is a stadium built, a convention centre built that will be the government creating the demand for us to build another hotel," he said.

"It's going to be subject to demand... if there is overwhelming demand coming into Canberra and its strong we can build a hotel just on the back of that."