Its price has risen 32?? to $2.93, on unusually heavy turnover of about 8.4 million shares, and any offer would likely be above $1 billion for the whole business.

Mantra Group operates the Peppers, Mantra and Breakfree hotel brands with more than 125 properties across Australia, New Zealand, Bali and Hawaii, where it owns the Ala Moana hotel.

The group issued a statement saying: "Whilst it is Mantra's policy not to comment on rumour or media speculation, Mantra confirms that it is not in discussions with any potential buyers."

"Mantra is aware of and will update the market in accordance with its continuous disclosure obligations," the statement says.

Hotel experts say the Hyatt and InterContinental groups have, in the past, had established mergers and acquisition teams, to "run the ruler" over the Mantra group, as a means to expand their range of brands across Australia.

Other possible buyers have been named as the Marriott International - still bedding down its $US14 billion merger with the Starwood chain - and Chinese-based hotel operators HNA and the Nanshan Group, which has a 19.9 per cent stake in Virgin Australia that it bought last year from Air New Zealand for about $262 million.

Growth phase

The activity comes as the hotel sector enters a new growth phase.

Four Points by Sheraton Melbourne Docklands, part of Four Points by Sheraton and Marriott International, has opened and was designed by Melbourne-based DKO Architecture.

The hotel forms part of the new Marina Tower development and is the first international hotel in the busy Docklands area, offering the largest inventory of guest rooms and meeting space in the precinct.

According to Michael Simpson, Savills managing director of Hotels, Chinese visitor growth of 22 per cent is the dominant contributor to this stellar performance, which is being driven by a growing Chinese middle class having access to increased air capacity between China and Australia, as well as the relatively low Australian dollar making the country a more affordable destination.

"In a very positive sign for the depth of the market, the outstanding international inbound growth has been experienced across a wide range of markets, with inbound visitor growth from many established Asian markets, as well as the US, above 15 per cent," Mr Simpson said.

The latest Savills' Hotel Australia's Hotels market report says the hotel property sector is currently outperforming all other property classes in the Australian market, with Sydney and Melbourne the standouts, thanks to the continued achievement of strong market key performance indicators against a backdrop of compressing yields.

Tourism Research Australia's 10-year forecast provides a positive outlook for continued growth with International visitor nights and domestic visitor nights expected to grow at 5.6 per cent and 3.1 per cent annually respectively.

The Australia-wide market achieved a "revenue per available room" (RevPAR) for calendar year 2016 of $139, which represented year-on-year growth of 2.2 per cent.

Mr Simpson said most Australian cities posted RevPAR growth, with Sydney's luxury segment capitalised on the strength of the market achieving an occupancy of 85.9 per cent, delivering a RevPAR of $291, up 5.7 per cent, which exceeded Melbourne's luxury segment RevPAR of $271.