The prostitute, identified as "Karlaa" in the Australian press, filed discrimination charges against the Drovers Rest Motel in the Queensland mining town of Moranbah, where she had previously rented a room 17 times in the past two years.
The ruling comes as a major victory for Australia's sex workers, while hotel and motel owners are less enthused, viewing the decision as an infringement of their right to choose how they run their businesses.
"The anti-discrimination legislation in Queensland is very clear that it is illegal to discriminate against someone on the basis of lawful sexual activity, including sex work, so we appreciate the finding and believe it is a big win for sex workers throughout Australia because it sends a very clear message that this kind of systemic discrimination will not be tolerated," Janelle Fawkes, head of the Scarlet Alliance, Australian Sex Workers Association, told the Associated Press.
Prostitution has limited legality in Australia, depending on the state. In Queensland it is a legal and regulated practice, though public solicitation is punishable by a fine.
As in some European countries, prostitution is somewhat regulated by the state.
For example, employees who work in massage parlors in New South Wales or brothels in Victoria are required to undergo regular health checks.
Now, however, Australian authorities have been trying to figure out how to regulate the sex workers industry, which has experienced a parallel expansion alongside the country's mining boom as camps filled predominantly by male mine workers and located far from urban centers have become increasingly profitable markets for prostitution.
Sex workers like Karlaa typically spend anywhere from a few days to several weeks at a given mining camp, requiring them to find temporary accommodations and a place to conduct business.
Richard Munro, chief executive of the Accommodation Association of Australia, has argued that lodging business owners should be able to decide whether to allow another business to operate within their own.
"It's absolutely illogical," Munro told the AP. "If a hairdresser decided to set up shop in the motel and started inviting people in to get their hair cut, I think the motel owner would have the right to say, 'Hang on, that's a different business operating out of my business.'"
Karlaa's legal counsel countered the argument, saying that using a motel bed could not be differentiated from someone using other amenities such as a phone or internet service for conducting business.
"At the end of the day, it's not acceptable to discriminate against people," Karlaa told the Australian. "What I do might not be to everyone's taste but it's legal, and it's how I make my living."