The upstairs floor of the 60-year-old watering hole - formerly home to 11 rooms, a handful of tenants and some grimy, aged carpet - has been gutted and transformed into a gleaming student dorm.

There are now 16 private rooms - each with their own air-conditioner, fridge, bed and desk - a communal kitchen, common room, computer room and universal free Wi-Fi.

Rooms can be leased long-term at a cost of $180-$220 a week, depending on the size of the bed and whether there is a window (three rooms are without).

The dorm retains a few hallmarks of its vintage, including high ceilings, an Art Deco-style stair rail and some sturdy old foyer tiling in the bathrooms, which are accessed by gender-specific swipe cards.

The hotel is part of the Woolworths-owned ALH Group, which owns and operates almost 300 venues nationally.

Rooms became available on Monday and seven have since been reserved.

Venue manager Maria Kramar said incoming residents were not deterred by the thought of sleeping above a potentially busy nightspot.

"Most of the uni students, once they've realised that it's attached to a pub, are stoked," Ms Kramar said.

"There's a shortage of university student accommodation in the area. We just figured it would be a good market to target."

The refurbishment comes as UOW investigates new ways to keep pace with the demand for student accommodation.

In 2011, about 2300 students applied for 1430 UOW-run housing places.

A recent review found at least another 1100 beds would be needed by 2020.

The university is negotiating with prospective partners to provide more beds from next year.