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Coles Bay intro. Located on the east coast of Tasmania, in the south of Australia, Coles Bay is a striking area of coastline that is surrounded by beautiful green spaces, bays, lagoons and forest. It ranks as the top tourism destination in this region of the state. Most of the town is encircled by Coles Bay Reservation Area, with its undulating hills with numerous scenic views over the ocean. Water sports are a big draw here, with numerous centres offering boating and kayaking along with the ubiquitous swimming and fishing. Within the park area, cycling and walking are the main activities. Coles Bay is also the gateway to the Hazards, pink granite peaks which form the bay's main backdrop, and Freycinct National Park, which extends along the main peninsula beside two further bays. Coles Bay hotels are numerous by the coast and on the edges of the protected areas, with most options at the high end of the market.