Acure Asset Management provides in-house research, analysis and news bulletins to subscribers on a monthly basis.
Our reports are based on Australian Property and Market trends as they happen – as well as reflective reports on our portfolio and performance.
Subscribe for more tailored News and Insights from Acure Asset Management below or on our Contact page
The Australian hotel sector continued its strong rebound through Q3 2025, supported by a surge in major sporting and cultural events, resilient domestic demand, and renewed international tourism. While transaction activity moderated in scale, capital interest remained elevated, setting the stage for renewed investment momentum into 2026.
Despite global volatility and cautious investor sentiment, the underlying fundamentals of the hotel market have strengthened. With the British & Irish Lions Tour delivering record RevPAR performance across capital cities, and preparations already underway for the 2027 Rugby World Cup, the next investment cycle is being defined by events-led demand and long-term infrastructure support.
Depicts the surge in total transaction value through 2025 despite smaller deal sizes, illustrating sustained capital activity.
Market Activity Overview
Transaction Performance
Total hotel transaction volume reached $1.526 billion YTD (to September 2025), up 42.1% YoY.
Average deal size declined to $11.75 million in Q3, reflecting a higher proportion of regional and sub-$20 million trades.
Yields across traded assets averaged 7.5%–8.5%, reflecting value re-alignment and stronger regional exposure.
Listings & Investment Trends
Listings surged to $2.7 billion YTD, with more than a third of assets having been previously marketed post-pandemic.
The investor market remains dominated by domestic capital, with offshore buyers re-emerging cautiously amid interest rate clarity.
Privatisation momentum, highlighted by Jardine Matheson’s US$4.2bn acquisition of Mandarin Oriental; signals confidence in hospitality’s global recovery trajectory.
Events as Growth Catalysts
The return of high-profile international sporting events continues to drive exceptional hotel performance across Australia.
British & Irish Lions Tour (July–August 2025)
Attracted an estimated 40,000 international visitors.
RevPAR growth: Brisbane +27.8%, Sydney +27.4%, Melbourne +18.2%.
Elevated occupancy across all major capitals, pushing ADRs to new post-pandemic highs.
Looking Ahead – Rugby World Cup 2027
Expected to host 24 teams across six weeks (Oct–Nov 2027).
The last Southern Hemisphere tournament (New Zealand 2011) lifted Auckland’s RevPAR by +150% in October, illustrating the transformative impact major events can have on hotel markets.
Highlights Brisbane and Sydney as outperformers, driven by event-linked visitation.
Acure Insight: Event-driven demand will continue to underpin hotel performance in key urban markets through 2026–2027, particularly in Brisbane, Sydney, and Melbourne; cities already benefitting from infrastructure upgrades and new hospitality product delivery.
Tourism and Demand Fundamentals
THRIVE2030 National Tourism Strategy Progress
Visitor economy spend reached $217.3 billion to June 2025, only 5.5% below the 2030 target of $230 billion.
International passenger movements up 15.6% YoY, reinforcing tourism’s return as a key export sector.
State Tourism Leaders
NSW remains the largest contributor ($55.9bn), while NT (+10.3% CAGR) and TAS (+6.6% CAGR) are projected to lead growth.
Major infrastructure and event pipelines continue to support accommodation demand nationally.
Shows consistent upward momentum toward the $230bn target by 2030, validating long-term tourism demand resilience.
Market Performance Snapshot
Major City Markets (YTD Sep 2025)
Market | RevPAR Growth | Occupancy | ADR ($) | Trend |
|---|---|---|---|---|
Sydney (Luxury) | +12.4% | 82% | $415 | Up |
Brisbane | +10.4% | 79% | $295 | Up |
Perth | +10.0% | 76% | $265 | Up |
Melbourne (Luxury) | +4.9% | 74% | $385 | Up |
Secondary & Leisure Markets
Market | RevPAR-Growth | Notable Trend |
Darwin | +8.2% | Supported by mining & project investment |
Hobart | +7.3% | Solid leisure demand recovery |
Gold Coast | -4.5% | Impacted by new supply and lower air arrivals |
Cairns | +1.7% | Recovering post-weather events |
Investment Outlook: 2026 and Beyond
Key Opportunities for Investors:
Yield Premiums: Regional and secondary assets still trading at 7.5–8.5%, offering strong comparative value.
Event Pipeline: Rugby World Cup 2027 and continued music, arts, and sporting schedules will sustain occupancy highs.
Capital Re-entry: Asian institutional investors and private syndicates are anticipated to re-enter the market as economic stability returns.
Sustainability & Design Differentiation: The MICHELIN Key program (launched 2025) reinforces the value of experiential, design-led assets.
|
The Australian hotel market continues to demonstrate its resilience and adaptability. With trading metrics trending upward, new sources of international capital poised to re-engage, and an unmatched calendar of upcoming global events, the sector is primed for another year of growth and opportunity.
Acure’s investment philosophy: targeting quality assets with sustainable yield, strong locational fundamentals, and exposure to key tourism and event markets; aligns squarely with the trajectory of the national hotel landscape heading into 2026.
Sources: Colliers Q3 2025 Australian Hotel Market Snapshot; Tourism Australia; BITRE; STR.