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According to CBRE’s latest Hotels Australia Overview and Outlook report, Australia’s accommodation industry is positioned for continued recovery and expansion in 2025, with key indicators pointing to growth, investment, and opportunity.
With international travel rebounding, domestic demand stabilising, and major infrastructure projects in motion, owners are well-placed to capitalise on emerging trends. The report highlights key market drivers and opportunities, offering valuable insights for accommodation owners and investors looking to stay ahead in an evolving landscape.
Recovery in Full Swing: The Numbers
International travel: A game changer for industry
For owners, the resurgence of international travel presents a lucrative opportunity. Australia’s international arrivals are now just 13 percent below pre-pandemic levels, with strong demand from China, India, and Southeast Asia. Airlines have responded by launching 60 new international routes, significantly improving connectivity.
This expansion in flight routes aligns with pent-up demand, particularly from Asia, and is expected to drive inbound tourism and boost occupancy rates in 2025. Further supporting the sector’s growth, major infrastructure projects—including the Western Sydney Airport expansion, Melbourne’s third runway, and the $2 billion redevelopment of Perth Airport—will enhance Australia’s global reach.
The rise of MICE and domestic travel
Leisure travel remains dominant, but a key shift in 2024 was the resurgence of meetings, incentives, conferences, and exhibitions (MICE) travel. With domestic travel spend now 34 percent above pre-pandemic levels, business and group travel represent valuable revenue streams for hotels. However, cost-of-living pressures have slowed year-on-year growth to 2 percent, meaning hoteliers must stay competitive by offering compelling value and experiences.
Investment trends: Is now the time to expand?
Despite cautious transaction activity in 2024 due to financing barriers and price gaps, investor confidence is on the rise. More than 72 percent of investors surveyed in CBRE’s Asia Pacific Hotel Investor Intentions Survey plan to increase their hotel asset holdings. Sydney ranks as the second most attractive hotel investment destination in the region, trailing only Tokyo.
2025: A defining year for accommodation owners
With a revitalised tourism market, increasing investment interest, and a competitive supply landscape, 2025 is set to be a transformative year for Australia’s hotel sector. Hoteliers who adapt to shifting trends, embrace new opportunities, and position themselves strategically will thrive in the evolving market.
Whether it’s capitalising on growing international demand, tapping into the MICE segment, or considering investment and expansion, owners have an exciting road ahead.
Acure Hotel Management
In 2023, Acure Asset Management identified the hotel and hospitality sector as one that offered fundamental value with strong upside characteristics. Consequently, it established the Acure Hospitality Trust No.1 to purchase selective accommodation hotels and hospitality properties. This strategy has been validated with the strong rebound in the sector as demonstrated in the latest CBRE Report. The Trust acquired 4 strong performing properties and continues to look for further acquisition to build its portfolio whilst also capitalise on opportunities to undertake upgrades and improvements to the existing portfolio of hotel assets.
The uptick in growth of WA tourism and work tourism has seen its assets benefit from strong performance and returns for investors. In 2025, with international travel rebounding, domestic demand stabilising, and major infrastructure projects in motion, Acure is well-placed to capitalise on emerging trends.