2025 marked a turning point for the hotel sector: Operating performance and capital markets moved back into alignment, with transaction volumes reaching a record A$2,7 billion, supported by several landmark transactions exceeding A$100 million.

Demand momentum strengthened:

International visitation continued to recover, with international arrivals reaching ~92% of pre-pandemic levels, while domestic travel remained resilient and corporate and MICE demand accelerated.

Strong performance across major markets:

RevPAR growth exceeded 8% across most major cities, led by Sydney and Brisbane, while Melbourne recorded 7% RevPAR growth despite ongoing supply additions.

Events materially lifted hotel performance:

Major sporting, cultural and business events delivered measurable rate and occupancy uplift across key markets, with peak event periods typically generating ADR premiums of 40% above average trading levels.

International visitor expenditure reached record highs:

Expanded air capacity and longer stays lifted inbound tourism expenditure to record levels, reinforcing Australia’s recovery as a long-haul destination.

Limited new supply pipeline:

There were 2,034 rooms delivered in 2025 and so far in 2026 with 5,143 rooms currently under construction nationally. Beyond 2027, only three projects totalling 828 rooms are under construction.

Supply constraints are becoming structural:

Elevated construction costs, labour shortages and financing conditions are materially limiting new hotel development across major markets. Future supply forecast to be 41% below historic delivery levels and 35% below forecast demand growth.

Outlook remains highly supportive:

Constrained supply combined with strengthening operating performance is expected to support continued income growth and renewed capital deployment through 2026.

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