Hospitality Report
Australia Key Markets Hotel Market Outlook, Q4 2024
February 2025
The Horwath HTL December 2024 Quarterly Hotel Market Outlook provides a comprehensive analysis of the Australian hotel market, focusing on key capital cities and regional destinations.
The report evaluates economic conditions, tourism trends, and hotel performance indicators such as occupancy rates, Average Daily Rate (ADR), and Revenue per Available Room (RevPAR). It highlights how the industry is recovering post-pandemic, with international travel rebounding and domestic tourism stabilizing. Additionally, it examines macroeconomic factors, including GDP growth, inflation, and employment trends, which influence demand for hotel accommodation.
The outlook for 2025 and beyond remains cautiously optimistic, with steady improvements expected across most markets despite ongoing challenges such as inflationary pressures, global economic uncertainty, and shifting travel behaviors.
Key Findings:
Market Performance:
- Sydney, Melbourne, and Brisbane are expected to experience occupancy growth, with Sydney forecasted to return to pre-COVID occupancy levels.
- RevPAR (Revenue per Available Room) growth is projected across major cities, with the Sunshine Coast leading at a 5.0% annual growth rate.
- Canberra and Hobart are struggling with occupancy and ADR (Average Daily Rate) due to increased supply and post-pandemic demand shifts.
Tourism and Economic Context:
- International visitor arrivals are recovering, reaching 87% of 2019 volumes by late 2024. However, full recovery is not expected until 2026.
- China, Japan, and the U.S. are expected to be the fastest-growing source markets in 2025.
- Domestic visitor nights are forecasted to return to pre-pandemic levels by 2026, with capital cities recovering faster than regional areas.
Risks and Limitations:
- Hotel market performance is highly vulnerable to external shocks, including economic downturns, geopolitical instability, and public health crises.
- Supply chain issues and inflationary pressures remain significant risks to market growth.
Overall, the report anticipates steady growth in the Australian hotel market, with positive long-term trends but short-term risks related to economic uncertainties and supply-demand imbalances.
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