The hotel under the Fragrance brand was proposed to be 11 storeys, and while a specific height was not yet specified and the development application was yet to be released, the architects' design work appears to have paid off.

Launceston Heritage Not Highrise co-ordinator Jim Collier said it appeared to be a positive use of the space that fit into the heritage surrounds.

"The proposed hotel does not look aesthetically unpleasing," he said.

"It appears appropriate and acceptable in the area in which it is to be set and, from a heritage perspective, LHNH welcomes the fact that the facade and 90 per cent of the internal walls and structure of the Clarion Hotel will be retained as will the facade of the old Alfred Harrap & Son warehouse."

Architecture firm Laurie Scanlan and Associates had been working with the City of Launceston to achieve an outcome that conformed with the council's new building height guidelines, and would be sympathetic to the heritage precinct.

MORE ON THE FRAGRANCE PLANS FOR LAUNCESTON:

They were the second set of plans to be provided to the council since discussions recommenced nine months ago. Initial plans from 2017 were believed to include a 25-storey hotel, however they did not reach the development application stage.

Despite the pleasing project design, Mr Collier said there were still concerns with surrounding infrastructure.

"LHNH do have serious concerns in respect of the additional strain which will be placed on Launceston's archaic and inadequate [sewerage] infrastructure," he said.

"[There are also concerns] in respect of the additional vehicle traffic loading likely to be placed on nearby streets especially when taking into consideration the additional loading from the nearby Verge Hotel when it opens its doors in the very near future."

The group has held a protest against the 39-metre Gorge Hotel plans, which remains subject to an appeal in the Resource Management and Planning Appeal Tribunal.

Fragrance plan has an eye on Tasmania's future tourism market

Tourism Industry Council Tasmania chief executive officer Luke Martin says the market is responding to the state's growing status as a high-end tourism destination, and the Fragrance proposal is a reflection on that.

Tasmania only has one five-star hotel, and the Fragrance Launceston is the largest to be proposed for the state.

Mr Martin said few regional cities in Australia had a five-star hotel of this scale, and it was being designed with the future in mind, rather than the present.

"This will be opening in three or four years time when Launceston needs more of this accommodation," he said.

"We need this pipeline of new hotel rooms to come online in five to 10 years. The market will respond, and is responding.

"Most importantly, we want to see developments that add to Tasmania's character as a world-leading visitor destination that touches on the quality, scale and uniqueness required, and does justice to Launceston and Hobart as two great regional cities."