Australia Key Markets Hotel Market Outlook – Q4 2025

YTD September 2025, domestic visitor nights for Australia are sitting at 285 million nights, with Horwath HTL forecasting a total of approximately 378 million nights for the full year ending December 2025. This would represent a decline of approximately 4.2 million nights (from TRA’s revised 2024 results using the new collection methodology) – or a 1.2% decline. This follows declining domestic visitor nights in both 2023 and 2024 of -1.3% and -0,8% respectively.

Using data up until November 2025, international short-term visitor arrivals to Australia have increased by 7.9% over the same period in 2024. Much of this growth has occurred in the second half of the year with the September quarter recording 12.6% growth over the September quarter 2024, and October and November recording year-on-year growth of 9.3% and 19.5% respectively. Based on this strong second half performance, Horwath HTL estimate full year growth of 8.5% for 2025 with short-term visitor arrivals to Australia reaching 8.98 million (about 95% of 2019 arrivals). While this growth is very positive, it remains well short of TRA’s forecast of 9.24 million that was made in December 2024.

Most hotel markets across Australia finished the year strongly, with strong second half performance, and notably a strong December quarter. This has seen year end results above that which was previously forecast. ADR growth in particular was very strong in the December 2025 quarter, which may end up being difficult to match in 2026.

The outlook is positive across all 11 markets, though supply challenges remain in markets such as Adelaide and Melbourne, which is resulting in a longer-than-expected return to pre-Covid occupancy levels. Sydney continues to cement it’s leading market position and status as Australia’s most desirable hotel market for investors and the Perth market continues to defy forecasts with strong RevPAR growth driven by both occupancy and ADR.

Despite softer than forecast tourism data, only Sunshine Coast (occupancy declines mainly due to Tropical Cyclone Alfred and some impact from renovation works) recorded negative RevPAR growth in 2025 2025. Perth, Hobart, and Brisbane have all recorded strong RevPAR growth for the year, with Hobart’s growth driven primarily through improved occupancy, and Brisbane’s through continued strong ADR growth (with demand showing signs of weakness).

The RevPAR growth outlook out to year-end December 2030 across the 11 markets ranges from a low of 1.7% (in Adelaide due to the impact of the supply pipeline) to a high of 4.7% (Gold Coast with strong recovery in 2026 bouncing back from Cyclone Alfred). The continued moderation in both international visitor arrivals and in domestic overnight visitation has seen a moderation in Horwath HTL’s Econometric Model outlooks. There is certainly a chance of imrpoved growth across many markets above the forecast level.

Despite some strong ADR growth in 2025 (and in some instances because of it), ADR growth is expected to moderate across most markets over the next 5 years, though this growth is now being calculated off a higher base, so in absolute terms, the ADR outlook has improved. RevPAR growth moving forward for key economic centres is forecast to be driven by both occupancy and ADR, while ADR growth continues to be a prime driver of RevPAR growth for leisure-driven markets with seasonal constraints forecast to limit future occupancy growth.

Overall, the outlook for the Australian hotel market remains positive in the long term despite short-term risks linked to economic uncertainties and imbalances between supply and demand.

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