The Australian Hotel Performance Forecast, Strategic Recommendations, and Leadership Outlook – August 23 to December 31, 2026
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Executive Summary
As of August 23, 2026, the Australian hotel sector stands at a pivotal moment, having completed its post-pandemic recovery phase and entered a new era of constrained supply, resilient demand, and record operating performance. International arrivals have reached 98% of pre-pandemic levels, with 9.16 million visitors in the year ending May 2026, up 9% year-on-year. More significantly, the quality of tourism has transformed: average visitor expenditure has increased by 31% from $5,195 to $6,795 since 2019, and average hotel stays have lengthened from 6.7 nights to 8.6 nights.
The supply-side dynamics are equally transformative. Australia's hotel construction pipeline has entered a structurally constrained phase, with new supply growth slowing materially. CBRE reports that beyond 2027, only three projects totalling 828 rooms are currently under construction nationally. Future supply is forecast to be 41% below historic delivery levels and 35% below forecast demand growth. This supply-demand imbalance, combined with record transaction activity of $1.67 billion in the first half of 2026, is creating a highly supportive operating environment for hotel owners and operators.
CBRE's modelling projects that a return to 2019 visitor intensity by 2030 could lift national hotel occupancy to 80% and RevPAR to $225, a 24% increase from current levels. With domestic travellers accounting for 70% of hotel room nights, the sector has a resilient demand base that provides insulation from changing global travel conditions. This report provides a verified, data-driven assessment of the Australian hotel sector from today through December 31, 2026, incorporating the latest performance metrics, construction pipeline intelligence, and strategic recommendations for hotel leaders and investors.
The Australian Hotel Performance Landscape – Record Performance Meets Structural Supply Constraints
Australia's hotel sector has delivered record performance in 2025 and into 2026, driven by a combination of resilient domestic demand, recovering international visitation, and favourable supply dynamics. The key data points paint a picture of a market firing on all cylinders.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
2025: A Turning Point for Operating Performance
CBRE's Hotels Australia - Overview & Outlook 2026 report confirms that 2025 marked a turning point for the hotel sector, with operating performance and capital markets moving back into alignment. International visitation continued to recover, reaching approximately 92% of pre-pandemic levels by year-end, while domestic travel remained resilient and corporate and MICE demand accelerated.
Revenue per available room grew by more than 8% across most major cities, led by Sydney and Brisbane, while Melbourne recorded 7% RevPAR growth despite ongoing supply additions . 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, as expanded air capacity and longer stays lifted inbound tourism expenditure to unprecedented levels.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
2026: Demand Strengthens, Supply Constrains
CBRE's August 2026 Beyond Recovery report confirms that in the year ending May 2026, international arrivals to Australia reached 9.16 million, up 9% year-on-year and equivale....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
However, the ABS data reveals significant regional divergence. While Queensland arrivals increased by 2.1% year-on-year and Western Australia rose by 1.4%, with the Northern Territory achieving the strongest percentage growth at 12.8%,....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
The Domestic Demand Anchor
Domestic travellers account for 70% of hotel room nights in Australia, providing a resilient demand base that insulates the sector from changing global travel conditions. This domestic-driven strength has delivered record performance despite the slower recovery in international visitation. The ABS data confirms that monthly resident returns exceeded 100% of pre-COVID volumes every month in 2025-26, with monthly volumes ranging from 104.4% to 120.8% of pre-COVID levels. The top destination countries for Australian residents were Indonesia (1.78 million trips), New Zealand (1.49 million), Japan (0.99 million), China (0.74 million), and the USA (0.68 million).....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
The Hotel Construction Pipeline – Structural Constraint or Competitive Advantage?
The Australian hotel construction pipeline is entering a more restrained and location-selective phase, with new supply growth slowing materially and future projects shifting beyond traditional CBD cores. This supply dynamic is perhaps the single most important factor shaping the sector's outlook.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
2025 Completions: A Modest Increase
According to Colliers' Australian Accommodation Supply Update, 2,339 new hotel rooms were completed across the country's ten major accommodation markets in 2025, increasing total supply by just 1.3% to 135,579 rooms. While new openings occurred across most capitals, completion rates have fallen sharply compared to earlier cycles amid mounting construction costs, labour shortages and tightening feasibility margins.
Melbourne led the nation's new supply, adding more than 1,014 rooms, followed by Sydney's metropolitan areas and the Sydney CBD. Recent completions included 1 Hotel Melbourne, The Eve Hotel Sydney, 25hours Hotel Sydney The Olympia, and Lyf Bondi Junction, all of which "are emblematic of the growing preference for experiential, design-led accommodation assets".....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Current Pipeline: 7,272 Rooms Under Construction
Colliers identified about 7,272 rooms currently under construction and set to open through to 2028, with a modest concentration slated for 2026. Roughly 30% of this pipeline sits outside traditional CBD hotel markets, especially across metropolitan precincts in Adelaide, Brisbane, Melbourne and Sydney.
"This geographic dispersion of supply is expected to materially reduce competitive pressure within established CBD hotel precincts, even as absolute room numbers continue to rise nationally," Colliers stated. Karen Wales, Head of Hotels, Transaction Services at Colliers, noted: "New hotel supply hasn't disappeared, but it has become far more selective as the supply cycle recedes. Pipeline projects are skewed towards metro locations and integrated precincts rather than delivering large volumes of new stock into CBD cores, which fundamentally changes the impact on existing assets".
Major integrated developments, such as Queen's Wharf Brisbane (which will introduce several hotels under multiple brands), demonstrate how new projects are increasingly linked to mixed-use precincts, transport connections and tourism-oriented infrastructure. Beyond 2027, CBRE reports that only three projects totalling 828 rooms are currently under construction nationally.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
The Cost Constraint: $830,000 Per Room
Despite a slowdown in tender price escalation during....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Colliers noted these conditions have forced developers and capital partners to reconsider project timing, scale and even viability. "Feasibility is now the real handbrake on new hotel supply. Even where demand fundamentals are strong and operating performance is improving, construction pricing, funding terms and holding costs are preventing many proposed projects from moving forward," Wales said.
Colliers has identified 6,542 proposed rooms nationwide, although it expects few of these projects to commence against the current construction backdrop and given ....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
The Conversion Trend
The short supply of incoming hotels has steered some developers towards conversion projects. CBRE's data reveals hotels are changing hands for between 20% and 40% below replacement cost, meaning developers who acquire a hotel at a low price and fund refurbishment stand to make better returns than from a newly built hotel. Developer Ross Pelligra cited the uncertainty of construction costs and the de....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Transaction Activity – Record Demand for Hotel Assets
The Australian hotel transaction market has proven its resilience, with Colliers' Q2 Hotels Market Snapshot revealing transactions reached $1.67 billion across 27 deals during the first six months of 2026. Transaction volumes increased 24% from the first half of 2025, while the number of deals rose 4%, making it the most active opening half since the market's 2015 liquidity peak.
Major transactions included Blackstone's acquisition of Hamilton Island and Wentworth Capital and Sun Hung Kai & Company's purchase of the 781-room Novotel and Ibis complex at Darling Harbour. Investment funds were the most active buyers for larger transactions, although private investors and owner-operators continued to dominate the middle market. Offshore capital from Singapore, Japan and Hong Kong also contributed to activity.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
The pub sector has also seen significant activity, with Redcape Hotel Group acquiring a portfolio of NSW pubs and hotels from Iris Capital in a transaction worth close to $500 million, ra....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Karen Wales, head of hotels, transaction services at Colliers, said resilient trading fundamentals were driving investor interest along with limited new supply: "Unlike commercial properties tied to long leases, hotels can adjust room r....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Australia's political and economic stability is also becoming more valuable to global investors seeking defensive income in an uncertain geopolitical environment. Wales added: "The market has moved into a more selective phase, with invest....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Lifestyle Assets and Refurbishment
The strongest demand is not necessarily for the newest hotel, with investors instead targeting established properties where value can be created through reinvention. "Hotels with strong operating fundamentals, experienced management and opportunities for repositioning, refurbishment or operational improvements are attracting the strongest interest," Wales said.
Premium, luxury and lifestyle hotels are particularly sought after, especially where they have a distinctive identity and can generate revenue beyond accommodation. Restaurants, bars, wellness facilities, events and branded experiences can turn a conventional hotel into a broader lifestyle destination. Properties such as Capella Sydney, Emporium South Bank in Brisbane and the Mondrian Gold Coast demonstrate this with top-tier dining options in addition to accommodation.
For many buyers, refurbishing an existing hotel has become more attractive than undertaking a new development. Elevated construction costs and planning delays continue to make new projects difficult to deliver. Existing properties that can be acquired below replacement cost have considerable appeal for this reason. Wales noted: "In ....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
The 2030 Growth Opportunity – A 24% RevPAR Upside
CBRE's August 2026 Beyond Recovery report provides a compelling long-term forecast for the Australian hotel sector. The report benchmarks Australia's hotel sector against other comparable global markets and examines the growth potential and benefits of stronger international tourism.
Using the 'international visitor intensity' metric, which looks at international arrivals relative to the resident population, CBRE found that Australia's visitor intensity sits at 0.32 arrivals per resident compared with 0.37 in 2019. Australia needed 10.23 million international arrivals in the year ending May 2026 to achieve visitor intensity of 0.37, around 1.07 million more visitors than recorded.
CBRE's Head of Hotel Research Ally Gibson said this presents a significant opportunity for the hotel sector to capture a greater share of future global travel: "While Australia will always compete as a premium long-haul destination, there remains real capacity to increase international visitation over time. For hotel o....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
CBRE's modelling indicates a return to 2019 visitor intensity by 2030 could lift the national hotel occupancy rate to 80% and RevPAR to $225, an increase of 24%, with Australia's gateway markets expected to capture the greatest benefit.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
This growth is expected to occur against a structurally constrained hotel supply pipeline, increasing the likelihood that additional demand will ....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
The Major Events Pipeline
Major events continue to elevate Australia's global profile while generating measurable hotel demand. CBRE's Needle Movers report found that 15 major sporting, cultural and business events across Sydney, Melbourne and Brisbane generated an average of 40,000 additional hotel room nights and $25 million in incremental hotel revenue per event.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Looking ahead, the 2027 Rugby World Cup will bring teams and fans from across the globe to Australian cities, providing a significant near-term boost to international visitation and hotel demand. The Brisbane 2032 Olympics represents the most significant long-term catalyst, with the government actively working to ensure sufficient hotel supply to satisfy demands as the city builds towards the Games.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Monthly Breakdown – August 23 to December 31, 2026
Late August 2026: Peak Winter School Holiday Period
From August 23 through the end of the month, Australia continues to benefit from the peak winter school holiday period. Hotel occupancy across major markets is expected to remain strong, with Sydney leading the country recording Australia's strongest occupancy, ADR and RevPAR. Brisbane, benefiting from population growth and infrastructure investment, continues to demonstrate strong performance, with the luxury segment showing particularly robust growth. Melbourne, despite ongoing supply additions, continues to demonstrate 7% RevPAR growth,....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
September 2026: The Spring Transition
September represents the transition to the spring season, with business travel and MICE demand accelerating. Corporate and MICE demand accelerated through 2025, and this trend is expected to continue through September. Perth continues to benefit from the resou....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
October 2026: The Build-Up to Peak Season
October sees the build-up to the peak summer season. Major events and the return of international tourists are helping offset weaker discretionary spending. Higher-income travellers have remained relatively resilient, supporting the premium and luxury segments -8. Sydney's luxury segment recorded 9% RevPAR growth d....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
November 2026: The Events Season Intensifies
November marks the intensification of the events season, with sporting, cultural and business events across major cities driving demand. Major events continue to generate average ADR premiums of 40% above average trading levels. The Queensland and New South Wales summer holiday booking windows open, and a wave of delayed developments is expected to open during the second half of 2026, including QT Parramatta, Andaz Gold Coast and Cry....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
December 2026: The Peak Summer Holiday Season
December marks the beginning of the peak summer holiday season, traditionally the strongest period for Australian hotels. Domestic travel demand is expected to remain resilient, with monthly resident returns consistently exceeding pre-COVID volumes. International arrivals, currently at 98% of pre-pandemic levels, are expected to continue their gradual recovery. The structurally constrained supply pipeline, with only 828 rooms scheduled for completion beyond 2027, means that even modest demand growth will translate into strong RevPAR performance. Australia's gateway markets — Sydney, Melbourne and Brisbane — are expected to capture the greatest benefit.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Strategic Recommendations for Hotel Leaders
Based on the data from CBRE, Colliers, the Australian Bureau of Statistics, and Tourism Australia, hotel leaders in Australia must pursue strategies that recognise the structurally constrained supply environment and the record operating performance of the sector.
Recommendation One: Capitalise on Supply Constraints Through Rate Optimisation
Future supply is forecast to be 41% below historic delivery levels and 35% below forecast demand growth. This structural supply-demand imbalance gives hoteliers significant pricing power. Ho....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Recommendation Two: Capture the Premium and Lifestyle Segments
Premium, luxury and lifestyle hotels are particularly sought after, especially where they have a distinctive identity and can generate revenue beyond accommodation. The luxury segment's pipeline shows construction of luxury developments between 2026 and 2028 expected to su....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Recommendation Three: Pursue Refurbishment and Repositioning
Elevated construction costs mean that refurbishing an existing hotel has become more attractive than undertaking a new development. Existing properties that can be acquired below replacement cost have considerable appeal, with CBRE's data revealing ho....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Recommendation Four: Differentiate Strategies by Market
Performance varies significantly across Australian cities, reflecting route access, source-market mix, seasonality and destination positioning. Sydney continues to lead the country, recording Australia's strongest occupancy, ADR and RevPAR. Perth is....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Recommendation Five: Leverage the Major Events Pipeline
Major sporting, cultural and business events continue to generate average ADR premiums of 40% above average trading levels. Hotel leaders should work directly with event organisers to secure room blocks at premium rates and develop packages that capture the high-value ....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Recommendation Six: Prepare for the H2 2026 Supply Wave
A wave of delayed developments is expected to open during the second half of 2026, with more than double the number of rooms delivered in the first half forecast to enter the marke. Projects include QT Parramatta, Andaz Gold Coast and Crystalbrook Sam in Adelaide. Mu....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Recommendation Seven: Position for the 2030 Growth Opportunity
CBRE's modelling indicates a return to 2019 visitor intensity by 2030 could lift national hotel occupancy to 80% and RevPAR to $225, a 24% increase. This growth will be driven by a combination of domestic resilience (70% of room nights) and international visitation growth. Hotel leaders should invest in their assets now to capture this growth, with a particular focus on guest experience, sustainability credentials, and technology integration that appeals to the premium traveller. The average visitor expenditure has already increased by 31% since 2019, and average stays have lengthened from 6.7 nights to 8.6 nights. Capturing this higher-value visitor profile will be critical to achieving the 2030 RevPAR forecast.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Leadership Outlook – Navigating a Structurally Supportive Market
For General Managers, Regional Vice Presidents, and C-Suite executives across Australia, the period from August through December 2026 presents a uniquely supportive operating environment. The structural supply constraints — with future supply forecast to be 41% below historic delivery levels — are creating a favourable demand-supply imbalance that is likely to persist for the foreseeable future.
The record transaction activity of $1.67 billion in the first half of 2026 reflects sustained investor confidence in the sector. Karen Wales of Colliers noted: "Hotels continue to demonstrate their appeal as a long-term investment class supported by flexible revenue models, limited future supply and Australia's position as a highly attractive global tourism destination".
Australia's distinctive tourism offering, strong global reputation, continued investment in tourism infrastructure and major events pipeline are providing a solid platform for future demand growth. CBRE's modelling suggests this growth ....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
The international visitor profile is changing in ways that benefit the sector. Average visitor expenditure increased by 31% from $5,195 to $6,795 since 2019, and average stays have lengthened from 6.7 nights to 8.6 ni....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
For hotel leaders, the strategic priorities are clear. Capitalise on supply constraints through rate optimisation. Capture the premium and lifestyle segments through experience-led offerings. Pursue refurbishment and repositioning to unlock value. Differentiate strategies by market, recognising the regional divergence. Leverage the major events pipeline, particularly the 2027 Rugby World Cup and Brisbane 2032 O....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
The Australian hotel sector has emerged from the recovery phase stronger than ever, with record operating performance, a structurally constrained supply pipeline, and a resilient demand base. The properties that navigate this environment with strategic discipline will be exceptionally well positioned for sustained performance in 2027 and beyond.....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
Sources
CBRE – Hotels Australia - Overview & Outlook 2026 (March 2026); RevPAR growth >8%, record $2.7bn transaction volume
Colliers – Australian Accommodation Supply Update (February 2026); 2,339 rooms delivered in 2025, 7,272 rooms under construction
Australian Bureau of Statistics – Overseas Arrivals and Departures, 2025-26 financial year (August 2026)
Yahoo Finance – Redcape acquires Hunter Valley pub portfolio in ~$500m deal (July 2026); includes 104-room QT Hotel Newcastle
eHotelier Insights – Australia's hotel sector to capture greater share of future global travel (August 2026)
Hotel Management – New hotel growth slows and shifts outside CBD (February 2026); 30% of pipeline outside CBD cores
TTR Weekly – Australia's core tourism markets return to pre-COVID levels (July 2026); nine priority markets back to 2019 levels
Commercial Real Estate – Australian hotel deals surge to $1.67bn in H1 2026 (August 2026); transaction volumes up 24%, Sydney luxury RevPAR +9%
Destination NSW – Australian hotel sector set to enter new growth phase (August 2026); 80% occupancy, $225 RevPAR by 2030, 24% increase
Commercial Real Estate – Short supply of hotels drives conversion trend (March 2026)
Travel And Tour World – Visitor recovery loses momentum with softer international arrivals (July 2026); state-by-state performance data May 2026....- Continue reading (Premium Members Only) - Unlock Exclusive Advantages with a Premium Membership - Read more here
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Disclaimer
This research report is provided for informational purposes only and does not constitute professional, financial, legal, or investment advice. The information contained herein is based on sources deemed reliable; however, no guarantee is made as to its accuracy, completeness, or timeliness. The authors and publishers of this report do not assume any liability for any losses or damages arising from the use of this information. Readers are encouraged to conduct their own independent research and consult with appropriate professionals before making any decisions based on this report. Any opinions expressed herein are those of the authors and do not necessarily reflect the views of any affiliated institutions, organizations, or stakeholders. The report may include forward-looking statements that are subject to uncertainties and risks, and actual results may differ materially. By accessing this document, you agree that the authors and publishers shall not be held responsible for any direct or indirect consequences resulting from its use.
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