Market Report

Australia Key Markets Hotel Market Outlook – Q2 2026

September 2026

This report by Horwath HTL in Australia provides an outlook for ten key city markets across Australia, assessing performance to June 2026 and the outlook for future growth.

The data as published in the report is based on the economic forecast by Deloitte Access Economics for the June 2026 quarter, historical hotel performance from STR as of June 2026, as well as historical tourism data available as of March 2026, including forecasted domestic and international visitation from Tourism Research Australia (TRA) as at December 2025, which has been adjusted by Horwath HTL.

For year end December 2025, domestic visitor nights in Australia reached a total of 381.2 million, a marginal growth of 0.2% over the latest back-cast results for 2024 (following a full 12 months of data under the new collection methodology, TRA has revised their back-cast results between 2019 and 2024). YTD March 2026, domestic visitor nights are estimated at 105.4 million, a 0.3% increase over the March 2025 quarter.

For the year ended December 2025, international short-term visitor arrivals to Australia reached 8.94 million, representing an 8.1% growth in international visitor arrivals over the 2024 results. Most of this growth occurred in the second half of the year, with arrivals from July through December up by 12.5% compared to the same period in 2024.

YTD May 2026, international short-term visitor arrivals to Australia have increased by 6.3% over the same period in 2025. Based on growth YTD, Horwath HTL estimate full year growth of 5.4% for 2026 with short-term visitor arrivals to Australia reaching 9.42 million (about 99% of 2019 arrivals).

Most hotel markets across Australia have started 2026 how they finished off 2025, with strong RevPAR growth. Six of the ten markets tracked have recorded RevPAR growth above 5% in the first half of 2026, with Newcastle, Brisbane and Melbourne falling below this level. Only Canberra has recorded negative RevPAR growth YTD June 2026.

The outlook for 2026 is positive across all ten markets bar Canberra, where RevPAR is forecast to decline this year. Across all other markets, ADR growth is expected to outpace occupancy, with occupancy growth for Melbourne, Brisbane and Adelaide all expected to be below 1 percent and for Newcastle, occupancy is forecast to decline. Sydney RevPAR growth is forecast to remain strong in 2026, while the Sunshine Coast is forecast to record a solid bounce back from the negative RevPAR recorded in 2025.

The RevPAR growth outlook out to year-end December 2030 across the ten markets ranges from a low of 1.7% (in Adelaide due to the impact of the supply pipeline) to a high of 5.5% (Gold Coast lead by ADR growth). 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 improved growth across many markets above the forecast level.

ADR growth is forecast 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.