Traveller's guide: Victoria, Australia

With beaches, vineyards and a cosmopolitan capital, mainland Australia's smallest state packs a lot in, says Lonely Planet's Jayne D'Arcy.

Victoria may be the smallest mainland state of Australia (though it's still more than 10 times the size of Wales), but it's also the second-most populated, with most Victorians residing in its cosmopolitan capital, Melbourne. Despite its small size (by Australian standards, anyway), Victoria has myriad landscapes that keep walkers, cyclists, foodies and wine-lovers busy.

Greater Melbourne, is bordered on two sides by vineyards (the Yarra Valley to the north-east and Mornington Peninsula to the south, both around an hour's drive away), with the western stretch hemmed in by the unforgettable Great Ocean Road, whose main stretch twists for 243km, all the way along the coast from surfing hotspot Torquay to Allansford (greatoceanroad.org).

Zoning in, Melburnians live in a city with Port Phillip Bay on one side and ever-expanding suburbs on the other three. The city is divided in two by the "upside-down" Yarra River (the mud that it carries is often close to the top of the water level). The divide is considered more than physical, with the creative-types staking out the northern suburbs (Fitzroy and Brunswick, in particular), and the more conservative living in the pricier "south of the river" suburbs of Prahran, South Yarra and Toorak.

Easy to get around by tram (as The Queen proved earlier this week), the inner city suburbs are where the locals love to shop and relax, drinking "flat white" coffees and making sure they've checked out the latest bar or café with the best industrial-chic fit-out.

Cycling is also gaining popularity, with the city introducing a Boris-style bike share program (melbournebikeshare.com.au; A$2.50/£1.70 per day with the first 30 minutes free), the only difference being that wearing a safety helmet is compulsory (they're available to buy for A$5/£3.30 from 7-Eleven shops).

Melbourne is also a fashion-conscious city. Local designers such as Metalicus and Gorman ensure that "Melbourne Black" is not the only colour that the city's women wear. Men can get a bespoke suit and shoes made at the industrial and cool café/outfitter Captains of Industry (00 61 3 9670 4405; captainsofindustry.com.au) in the CBD.

Fashion comes to the forefront for the Spring Racing Carnival, which climaxes with the country-stopping Melbourne Cup horse race (melbournecup.com) this Tuesday. The race-goer's wardrobe is in stark contrast to the crowds at Australian Rules Football matches, which usually sees its grand final played in the last week of September. The AFL is a leveller of sorts, with most Victorians (of both sexes) pledging allegiance to a team and many making the weekly (and often wet) pilgrimage to the Melbourne Cricket Ground (MCG) or Docklands Stadium to catch a game (afl.com.au).

Beyond the city, three-four hours' drive north brings you to the middle of Australia's "high country", an area where mountain cattlemen and bushrangers once eked out a living. These days, it's foodies and cyclists who take to the tracks, including old railway lines, on "pedal to produce" adventures (northeastvalleys.com.au). Local accommodation can lend out bikes with baskets and hand out maps; all you have to do is follow the routes to where fresh food (cheese, eggs, fruit, wine and olives) is sold, often from the farm gate itself.

Between June and September, the high country's alpine peaks are covered with snow, and hoards of Melburnians trek up to the state's seven alpine villages for resort skiing and snow-boarding. The most popular peaks are Falls Creek, Mt Hotham and Mt Buller.

Victoria's grand, period architecture tells a story of prosperity – prospectors first found gold in the town of Clunes in 1851 and the state grew rich while the population mushroomed. Buildings in gold rush towns (Bendigo and Ballarat are two of the biggest) and Melbourne itself, impress as monuments to the gold fever that struck the state.

Ballarat is also the site of an engaging Aboriginal cultural centre, Kirrit Barrett (00 61 3 5332 2755; A$5/£3.30), which remembers and celebrates the pre-settlement years (all 40,000 of them).

Heading towards South Australia's border, Victoria is dotted with former gold mining towns that end where the jutting peaks of the Grampians National Park begin. Just beyond the gold-rush town of Ararat and south of the Grampians is the small town of Dunkeld, venue of one of Victoria's best restaurants at the Royal Mail Hotel (00 61 3 5577 2241; royalmail.com.au). In addition to stylish rooms, the mid 19th-century building boasts an award-winning restaurant whose kitchen makes use of more than 150 types of organic and heirloom vegetables and herbs grown onsite. Travel further north or west of Dunkeld and the land melts into desert (the Big Desert Wilderness park) and its pink lakes. For more information on Victoria, see the tourist board website, visitmelbourne.com.

Plenty of airlines make the long journey from London to Melbourne. The fastest route is offered by Qatar Airways (0870 389 8090; qatarairways.com/uk) from Heathrow: the shortest total journey time, including an hour in Doha, is 21 hours. Qantas (08457 747 767; qantas.co.uk) flies from Heathrow with a stop in Singapore. Other airlines offering connections from the UK include Emirates (0844 800 2777; emirates.com/uk) via Dubai; Etihad Airways (0203 450 7300; etihadairways.com) via Abu Dhabi; Singapore Airlines (0844 800 2380; singaporeair.co.uk) via Singapore; Thai Airways (0844 561 0911; thaiairways.co.uk) via Bangkok; and finally , Malaysia Airlines (0871 4239 090; malaysiaairlines.com) via Kuala Lumpur.

Sleep soundly

Melbourne has recently seen the arrival of the Art Series hotels (artserieshotels.com.au): new stylish boutique-style accommodation with a sense of humour. The hotels are each named after an Australian artist. The Cullen (00 61 3 9098 1555) has doubles from A$219 (£146) in groovy Prahran, and is named after the daring contemporary artist Adam Cullen. There's no getting away from his art in the rooms; even the bathroom dividers are graced with his work.

Popular with visiting glitterati is The Olsen, pictured, (00 61 3 9040 1222) with doubles from A$249 (£166). It boasts a swimming pool that juts out over South Yarra's vibrant shopping artery Chapel Street, and five-star rooms splashed with the vibrant landscape work of Dr John Olsen.

For a breath of fresh air in spa country, try Daylesford's revitalised Peppers Mineral Springs Retreat (00 61 7 5665 4426; peppers.com.au/springs) with doubles from A$275 (£183). This former 1930s guesthouse boasts the best of art deco luxury. For something on a smaller scale, try Comma (00 61 3 5348 4422; thecommagroup.com/daylesford; doubles from A$780/£520 for two nights midweek). Enjoy its bushland views, four bedrooms and evidence of the deft designing hand of Melbourne artist Matt Martino.

Ocean drive

The best way to get to know the spectacular curves of the 243km-long Great Ocean Road, completed by returned soliders in the 1930s, and the seaside villages that line it, is to drive (or walk, but more on that later). East Coast Car Rentals (00 61 7 5592 0444; eastcoastcarrentals.com.au) offers seven days' car hire from Melbourne for A$180 (£120).

From Melbourne, it's a 90-minute drive to Torquay – a town that epitomises Australian beach culture and where the spectacular road starts. Many of the world's top surfing brands began here, so check out the surf outlet stores as well as the neighbouring Surf World Museum (00 61 3 5261 4606; surfworld.org.au; A$10/£6.70) at Surf City Plaza. Modern accommodation can be found nearby at Bellbrae Harvest (00 61 3 5266 2100; bellbraeharvest.com.au) with doubles from A$210 (£140), room only.

Moving along the Great Ocean Road, you'll drive through rainforest, past shipwrecks and fine restaurants. Stop in the gum tree-sheltered town of Lorne and buy seafood on the pier. There are plenty of public barbecues to cook your feast on. Further west, travellers who've never set foot in a youth hostel will appreciate the contemporary architecture of Eco Beach YHA in Apollo Bay (00 61 3 5237 7899; yha.com.au) with doubles from A$85 (£57) room only.

Apollo Bay is also the launching pad of The Great Ocean Walk. With 104km of track, it's one of the most scenic walks in the country, and can be done with (or without) assistance. Try Hedonistic Hiking (00 61 3 5755 2307; hedonistichiking.com: A$2,895 (£1,930) includes six nights' luxury full-board accommodation, luggage transfers and transport to and from Melbourne. The walking track takes you close to the spectacular offshore limestone stacks of the Twelve Apostles.

Wild and wonderful

There are plenty of spots to get photo opportunities with the local critters; try Anglesea Gold Golf Course on the Great Ocean Road for kangaroos (you can play a round around them) and dolphins can often be spotted from the hourly ferry betweenQueenscliff and Sorrento (on the Mornington Peninsula; searoad.com.au).

Checking out the local Little Penguins usually requires a trip down to Phillip Island, where pre-booked tickets to the Penguin Parade (00 61 3 5951 2800; penguins.org.au) cost A$21.65 (£18). Thousands come to watch the nightly pilgrimage of penguins returning home, but there's a closer-to-Melbourne solution in St Kilda, one of the inner-city beachside suburbs. Head out for dinner somewhere beachfront such as Stokehouse (00 61 3 9525 5555; tokehouse.com.au) and, as the sun sets, walk down the pier to where a small colony of Little Penguins lives. As they make the dash to their rocky homes (in a man-made breakwater), volunteers with torches point them out to those gathered. For guaranteed zoo-style sightings, head to Healesville Sanctuary zoo.org.au/HealesvilleSanctuary; admission A$25.40/£17) in Healesville. It's one of the few places you'll spot a platypus.

Mornington marvels

When not basking on the glorious beaches (Portsea and Sorrento are pretty and popular; others form parts of Mornington Peninsula National Park), visitors to the Mornington Peninsula can get hot and steamy at Peninsula Hot Springs (00 61 3 5950 8777; peninsulahotsprings.com; A$25/£16.70). The complex, set amid rocks and shrubs about one-and-a-half hours' drive from Melbourne, houses 30 different bathing experiences (from a hammam to 40C lagoons and icy cold plunge pools). It's open daily until 10pm – stargazing as the steam rises up into the night sky is a hard-to-beat indulgence.

With valleys of apple orchards being replaced with valleys of vines over the past three decades, wine has become big business on the Mornington Peninsula. Cool climate Chardonnay and Pinot Noir lead the pack, and there are plenty of wineries hidden in the hills offering relaxed but sophisticated wine tastings. For tastings and superb meals with bucolic valley views, head to Port Phillip Estate winery (00 61 3 5989 4444; portphillipestate.com.au); luxury accommodation is also available here from A$500 (£333) per night.

Life on the Murray River

Forming the border with New South Wales to the north is the "mighty Murray River". It still carries historic steam-powered paddle boats under the huge Red Gums that line the river, though these days the haunting whistles are blown more for show than necessity. Soaked by the sun, riverside towns, including Mildura and Echuca, exude old-world charm and also boast the "food bowl" title with their Mediterranean atmosphere encouraging the growth of grapes and citrus fruits.

Vying for space with the paddle steamers are houseboats, and the river experiences a particular kind of peak period during the Easter school holidays when families and groups hire houseboats and cruise for days. Rich River Houseboats (00 61 3 5480 2444; >richriverhouseboats.com.au) is based in Echuca. Rates start at A$1,000 (£667) for three nights' hire of a two-berth houseboat.

Vines and fine dining

Melbourne's most-loved fine dining restaurant, Vue De Monde (00 61 3 9691 3899; vuedemonde.com.au), has elevated from a ground-floor restaurant to a new home on level 55 of the Rialto, once the observation deck of Melbourne's highest building. The fit-out is Australiana at its best. It's popular, so book ahead if you want to sample an ambitious menu that takes in kangaroo with swede and turnip, or spanner crab with broccoli and beetroot.

On the more casual side are two restaurants that sum up Melbourne's stylish but laid-back vibe; try Cumulas Inc (00 61 3 9650 1445; cumulusinc.com.au) and Cutler & Co (00 61 3 9419 4888; cutlerandco.com.au).

It only takes an hour from Melbourne to reach Victoria's best-known wine area – the Yarra Valley, regarded for its cool climate wines. It's home to stunning, vast wineries, including Yering Station (00 61 3 9730 0100; yering.com), also Victoria's oldest. Dine at Tarrawarra Estate (00 61 3 5957 3510; tarrawarra.com.au), which also has the terrific Tarrawarra Museum of Art (00 61 3 5957 3100; twma.com.au; admission A$5/£3.30). Most wineries offer cellar doors, where you can taste a selection of the wines. Melbourne Private Tours (00 61 419 571 800 melbprivatetours.com.au) offers day trips to the region for A$300 (£200) per person.

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