Melbourne is often considered the most European of Australian cities. It has a Continental atmosphere with broad leafy boulevards, shaded café terraces and grand Victorian-era houses. It is a mellow city with an emphasis on the arts: music, fashion, literature, gardening and food are all celebrated regularly and more often than not with a festival.

Built at the mouth of the Yarra River where it merges into Port Philip Bay, Melbourne expanded rapidly during the Gold Rush and is today known for its multiculturalism. Chinatown was established in the 1850s and still retains its historic atmosphere with narrow lanes and a wealth of restaurants.

Nearby Bourke Street is a buzzing area with cafes, bars, bookstores and small boutique hotels. Its Royal Arcade is a wonderful example of 19th Century architecture with a high glass roof and marble floors. St Kilda is a beach suburb that manages to be both sophisticated and slightly shabby. It epitomises 'mellow Melbourne' with an arts & crafts market, botanical gardens and the iconic Luna Park.

Beyond Melbourne is the Yarra Valley: an idyllic wine region with around 30 vineyards, some excellent restaurants and lovely luxury hotels. Seal Rock is also worth a day trip; it is home to around 16,000 Australian fur seals, the largest colony known.