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Prime CBD land of more than 7300sq/m is available and tourism minister Kim Hames called for registrations of interest for the Fire and Emergency Services Authority House and the Perth Chest Clinic located behind it.

To help make the offer more attractive, the developer will get crown land at a reduced rate, flexible floor space bonuses and be eligible for infrastructure grants.

Dr Hames said Perth was desperate for more hotel rooms with the average occupancy rate of 85.43% the highest in the nation.

Perth hotels will be the most expensive in the country by September with rates expected to jump by 14%, according to figures released this week by Deloitte Access Economics.

Tourism Council WA chief executive Evan Hall said there should be at least 300 rooms built on the site to help provide for the growing demand of resource sector-based business.

"However, one hotel is not near enough, we need at least another six hotels between now and 2020 to be built," he said.

The Australian Hotels Assocation of WA chief executive Bradley Woods said the development was well needed in the city and the new incentives would help attract developers.

Dr Hames said the lack of hotel beds had become a major problem in Perth. He met with a Chinese tourism operator last week who said Perth's potential was being hamstrung by the room shortage. He said the government was trying to make hotels more viable for developers, as residential developments were far more economical.

He said the government was examining options at the new Perth foreshore development, Burswood, new developments in East Perth and around the new City Link rail project.