The Peel Hotel in Melbourne won an exemption from the Equal Opportunity Act to prevent insults and abuse directed toward gays in its bars and nightclubs, owner Tom McFeely told AFP.
"The hotel predominantly markets itself towards homosexual males, towards gay men and we want to protect the integrity of the venue as well as continue to make the men feel comfortable," McFeely said.
"When large numbers of heterosexuals or even lesbians are in the hotel that changes the atmosphere and many gay men can feel uncomfortable."
The landmark decision by a civil tribunal gives the establishment ? which does not offer accommodation ? the right to refuse entry to people considered a threat to the safety and comfort of its patrons.
Helen Szoke, the chief executive of the Victoria state government's Equal Opportunity and Human Rights Commission, said the Peel Hotel's gay clientele had experienced harassment, hostility and violence.
"(They) also have felt as though they've been like a zoo exhibit with big groups of women on hens' parties coming to the club," she said.
"I don't really care what heterosexuals or lesbians think"
McFeely said his aim was not to ban all straight patrons and lesbians but to limit their numbers so gay men could freely express their sexuality.
He said he expected a backlash from other patrons, but added: "I'm not worried about it because to be frank I don't really care what heterosexuals or lesbians think.
"My main motivation is to protect my gay male customers and I realise heterosexuals and lesbians may be upset. but I don't care about that.
"We are open at 8pm and we go all the way through till the morning. We have two dancefloors ? it is a nightclub environment."
McFeely said it would be easy to sort out desirable gays from undesirable straights and lesbians.
"It is particularly easy to implement with the females 'cause that is pretty obvious.
"With the heterosexual males, if they identify themselves as that at the door, or indeed we question their behaviour in the venue and if they come across as being heterosexual, then we will simply ask them to leave if the behaviour is unappropriate."
Human rights group Liberty Victoria supported the decision, vice-president Michael Pearce said.
"There are numerous places where heterosexual people can go," he said.
"I think what (the tribunal) has said is that there aren't that many places where gay people can go and meet without the risk of being harassed or vilified, and that they are entitled to have their own spaces to do that in."