Australia’s hotel sector is headed for a banner year following significant increases in tourism, new hotels and investor activity. All major cities recorded a rise in occupancy over the past year after international visitation hit 7.6 million trips and almost 60 new flight routes from overseas destinations came online. Nationally, hotel occupancy reached 71%, while Accor, Asia-Pacific’s largest accommodation provider, recorded 84% occupancy across its top tier Australian hotels. Tourists are spending more too: revenue per available room up 3.8% to $171 and domestic travel spend up 34% on pre-pandemic levels.
Indicators are so promising that CBRE forecasts a full recovery for the industry by the end of 2025. “This growth in international flights reflects a strategic response to pent-up demand from key markets particularly Asia,” said CBRE Regional Director Hotel Valuations Troy Craig. “Future infrastructure projects including Sydney’s Western Sydney Airport expansion, Melbourne’s third runway and the $2 billion redevelopment of Perth Airport will further enhance Australia’s air connectivity and global reach.”
High hopes
Confidence is high among industry leaders too as the extent of demand for travel overrides current pressures on consumer spending said Colliers’ Head of Hotel Transactions Australia Karen Wales. Hotels, for instance, are now the strongest performing sector EVT Hotels & Resorts Group, Australia’s fourth largest hotel owner which oversees a diversified portfolio of hospitality assets that includes cinemas and Thredbo Resort.
EVT has made hotels the primary growth focus as a result, actively divesting assets while improving others and expanding across its several brand and hotel management platforms which include QT Hotels and Rydges. There are also plans for a mixed-use hospitality and entertainment development at 525 George Street Sydney, the group “considering options to generate the best returns for shareholders”.
Opening doors
The positive news dovetails with a swag of hotel openings in capital cities as an estimated 5700 new rooms come online over 24 months. Sydney leads the way for most top new accommodations including Australian debuts for two of the world’s leading brands - 25hours Hotels and a prestigious Waldorf Astoria.
The 25hours Hotel to be known as The Olympia is scheduled to open this year in the heritage building at 1-11 Oxford Street Paddington. A sizable corner property, it was once home to West’s Olympia Theatre before gaining renown in the 1990s as hip Sydney nightclub The Grand Pacific Blue Room. On its demise the historic site remained shuttered for well over a decade, making the design-led 25hours Hotel brand known for its elaborate, quirky interiors an ideal candidate for its revival.
The opening of a Waldorf Astoria - the premium luxury brand of Hilton Hotels - in Circular Quay early next year will mark a significant milestone for Australia’s luxury hotel industry, such is the prestige of the brand. When the original Waldorf Astoria opened in New York in 1893, the high-society hotel was the most glamorous and elegant hotel of its time, becoming famous as the first to introduce 24-hour room service and en suite bathrooms. The 26-level Sydney property “topped out” in March, and the focus now is on the hotel’s interior design and sandstone facade.
Checking in
Several of this year’s new hotel crop have already opened to good results. Boutique hotel The Eve in Redfern sold out when it welcomed its first guests while TFE Hotels’ unveiling of the Adina Town Hall is helping revitalise its first-generation Adina Hotels. In January EVT opened the refurbished Tank Stream Hotel bringing the Rydges portfolio to 45 properties as it expands across Australia and New Zealand.
Openings scheduled for later this year include The Hotel Indigo Sydney Centre atop the refurbished City Tattersalls Club and Marriott’s Moxy Sydney Pitt Street which will offer over 300 rooms in the heart of the CBD.
There’s action in the suburbs too, the biggest news being Marriott International announcing a 279-room new build premium hotel on Church Street Parramatta. Scheduled to open mid-2027, the Sydney Marriott Hotel Parramatta will be the group’s first in Parramatta and fifth in Australia. Marriott International Vice President Developments ANZP Richard Crawford said the company had chosen Parramatta because it was a city “experiencing significant public and private investment as it evolves into Sydney’s second CBD”.
Also in the west, a Novotel is slated for Cabramatta and Atura, EVT’s affordable lifestyle brand, opens Atura Oran Park in Sydney’s south-west in 2026.
Dollar signs
The hotel sector’s upswing has attracted an “unprecedented influx” of first-time investors according to property giant Colliers. Newcomers accounted for a hefty 48% of investment volume last year - the highest proportion on record - drawn by the accommodation sector’s current resilience, growth potential and strong returns.
Home-grown capital was dominant, with Australian high-net worth individuals, family offices and investment funds accounting for up to two-thirds of all transactions, according to Colliers’ Australia Real Estate Investment Review and Outlook 2025.
International capital however was returning, Sydney the prime focus. “Transaction activity is set to accelerate through 2025 driven by expectations of falling debt costs, a stablilising accommodation supply and improving tourism demand,” Ms Wales said. “We expect continued growth and resilience in the sector supported by strong demand and strategic investment.