The prominent industry lobby group, which represents and protects the financial and political interests of hotels, joins a growing list of groups to back the plan including politicians, business groups and members of the public.

AHA country vice-president Ian Larkin said any initiative that aimed to create interest within Ballarat would only help the plight of many hotels.

Mr Larkin said consumer patterns and the spiralling cost of doing business had seen many hotels in Ballarat close and a proposal which would make Ballarat a more vibrant centre to visit should be embraced.

"Even though the trams' proposed path does not go past many hotels, it is the concept of bringing activity to the town that enthuses us," he said.

"We have read with interest as this debate has unfolded ... it is time to move forward and do something to create interest and activity in this city's heart and make us the preferred centre to visit."

Under the tram proposal, a tramway using original Ballarat trams would link Ballarat Railway Station and Sovereign Hill and do a circuit of some of Ballarat's most historic streets.

The circuit would include Lydiard, Sturt, Doveton and Market Sts, and most of the track outside the CBD would be built off the road, following Canadian Creek to the bottom of the Sovereign Hill carpark.

A study funded by the Federal Government, Tourism Victoria, Ballarat City Council and the Central Highlands Area Consultative Committee, says the tramway could be built for about $20 million and would create dozens of jobs and boost tourist spending by up to $4 million a year.

Mr Larkin said all Ballarat members of the AHA were supportive of any industry prepared to boost tourism in the city.

"We are heavily reliant on tourism and if we can get the tram back into Ballarat it will have a huge impact," he said.

"While it might not directly benefit all hotels, you are talking 50 odd publicans just in our town who are behind this."

A public information session regarding the possible reintroduction of Heritage Trams to Ballarat will be held at the Ballarat Town Hall on Tuesday, July 30 at 7pm.