The victim has been named locally as Mia Ayliffe-chung.
Mia, 21, had been travelling around Australia, and had previously studied childcare at Buxton College and psychology at Chesterfield College in the UK.
Friends have begun to pay tribute to the woman described as “truly beautiful”.
Kyle Godwin wrote: “Today the world has lost one of the most beautiful young women to ever walk this planet.
“Today I lost a best friend. A girl like no other, one of the happiest, full of energy, delightful, energetic and hilarious girl I’ve come across.
“Even though I’ve only known you for a short amount of time it feels like we have been best friends for years, we just seemingly clicked and were like two peas in a pod.
“I will miss you forever Mia. The only good news to come from this is that heaven has truly gained a beautiful soul.”
Mia was killed at the Home Hill Hostel, north Queensland, Australia, on Tuesday night in front of 30 horrified onlookers.
A 30-year-old British man has been left fighting for his life in hospital while a dog was also stabbed to death, according to Australian media.
A local man, 46, was also taken to hospital with a stab wound to the leg but he has now been released.