Economic and Tourism Outlook by State 

• New South Wales (NSW) and Victoria (VIC) are projected to have the slowest recovery due to the severe impact of the Delta outbreaks. Pent-up demand in Victoria is not expected to compensate for the prolonged lockdown periods. 

• Queensland (QLD), South Australia (SA), and Western Australia (WA) show more resilience. WA’s economy benefits from minimal COVID-19 disruptions and high iron ore prices.

• Australian Capital Territory (ACT) is expected to recover robustly due to high vaccination rates and increased government spending. 

International and Domestic Tourism 

• The return of international tourism is delayed, with expectations now set for 2024 or later. However, there is strong pent-up demand that will drive recovery once borders fully reopen. 

• Domestic tourism is forecast to return to pre-pandemic levels by 2022-23, with a full recovery and surpassing of previous peaks expected by 2023-24. Victoria and NSW will experience a slower return due to extended lockdowns. 

Hotel Market Performance 

• Revenue per Available Room (RevPAR) saw significant variance across key markets:

• Brisbane: 39.6% increase, reaching 73.8% of 2019 levels.

• Canberra: 21.3% increase, reaching 60.0% of 2019 levels.

• Darwin: 157.9% increase, surpassing 2019 levels at 116.5%.

• Gold Coast: 46.7% increase, reaching 84.3% of 2019 levels.

• Hobart: 52.8% increase, reaching 79.5% of 2019 levels.

• Melbourne: -19.5% decrease, reaching 38.4% of 2019 levels.

• Newcastle: 29.3% increase, reaching 78.7% of 2019 levels.

• Perth: 30.6% increase, reaching 81.8% of 2019 levels.

• Sunshine Coast: 56.1% increase, reaching 107.1% of 2019 levels.

• Sydney: -7.6% decrease, reaching 40.6% of 2019 levels​​.

Supply Pipeline 

• Sydney: 3.4% compound annual growth rate (CAAGR) from 2021 to 2025, with significant additions in upscale and luxury segments.

• Melbourne: 5.7% CAAGR, with notable growth in upscale and upper upscale segments.

• Brisbane: 1.2% CAAGR, focusing on luxury segments.

• Perth: 2.5% CAAGR, with ongoing developments in upscale and luxury segments.

• Adelaide: 4.9% CAAGR, focusing on upscale and luxury segments.

• Canberra: 1.9% CAAGR, focusing on upscale segments.

• Hobart: 1.7% CAAGR, with developments in upscale segments.

• Gold Coast: 1.3% CAAGR, focusing on luxury and upscale segments.

• Sunshine Coast: 1.9% CAAGR, with a mix of midscale and upscale developments.

• Newcastle: 1.9% CAAGR, focusing on luxury and upscale segments​​. 

Key Insights 

• The recovery of the hotel market is heavily reliant on the resurgence of domestic travel, which has already shown strong performance, particularly in leisure-focused regions such as the Gold Coast and Sunshine Coast. 

• Investment trends indicate a preference for high-margin accommodation types, including luxury hotels and serviced apartments. 

The outlook for Australia’s hotel market remains positive, with a strong recovery anticipated in 2022 and beyond. Key challenges include managing new supply and adapting to changes in travel behaviour due to ongoing pandemic-related uncertainties. 

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