Although it's situated 12 kilometres from the central area, Manjimup is definitely worth looking into. It's got 2 accommodation options to choose from, including Manjimup Gateway Hotel and Kingsley Motel & Restaurant.
For more options, try out the Karri Valley Resort and the Clover Cottage Country Retreat. They are located 25 kilometres and 16 kilometres respectively from the center. If those two don't meet your needs, you can try the Treenbrook Cottages or the Best Western Pemberton Hotel.
If you want to check out some nearby localities, check out Pemberton and Bridgetown. Journey 12 kilometres to the southwest from Diamond Tree and you'll discover Pemberton. That said, Bridgetown is 45 kilometres to the north. Pemberton hotels are the Karri Forest Motel and Pemberton Old Picture Theatre Holiday Apartments. Bridgetown options are the Ford House Retreat and Shambhala Guesthouse.
Hotels in Diamond Tree start at AU$95 per night. Prices and availability subject to change. Additional terms may apply.