Thomas Muncaster Bell (1821-1902) built the Yarra Flats Hotel on the site where Melba Lodge now stands and applied for a publicans license in 1864. Thomas Bell owned the hotel until his death but the license was transferred in 1871 to Anne and Thomas Batt who came from Eltham. The Hotel was the meeting place of the Yarra Glen Hunting Club and Tom Batt and Tom Armstrong both had a pack of hounds. It was a fine sight on hunting days to see those participating in this favourite pastime assemble on the old road in front of their hotel. The ladies, sitting side-saddle ... (W. N, in The Age 5 Jan 1935).

The hotel was at the centre of the little community. Its near neighbours included the general store, a blacksmith, the Commercial Bank, two churches, a school, the Racing Club, the saleyards, and beyond that the Post Office. In 1881 William Farrell took up the license of the Yarra Flats Hotel until he opened the Burgoyne Hotel in 1888. William Briggs was the next licensee until June 1894. John Irvine leased the hotel from 1894 until he died in 1907, when his son Thomas took out the license for a brief period.

Robert (Bert) Lithgow took over the license in 1909. He was the nephew of Thomas Muncaster Bell's wife Mary and had been adopted by the couple as a child. He eventually inherited the Yarra Flats Hotel and was owner licensee until 1932 when he purchased the Grand Hotel. The publicans license of the Yarra Flats Hotel was transferred to the Grand Hotel and the original license was cancelled. The Yarra Flats Hotel building then became a private residence until it was demolished in the late 1990s to make way for Melba Lodge.