Ray White Group Head of Research, Vanessa Rader, reports that investment activity in hotels has increased substantially, with total transaction volume reaching $2.8 billion over the past four quarters.
“Investment activity in hotels picked up notably through 2025, representing a 33 per cent increase on the previous year,” Ms Rader said.
“The sector has attracted renewed interest from both domestic institutions and offshore buyers, with cross-border capital accounting for 12 per cent of recent acquisitions.”
Ms Rader noted that international investment remains below historical levels but is showing signs of growth, with specific countries taking leading positions.
“Singaporean investors remained the most active international buyers, contributing $150 million year-to-date, while Thai interests have emerged as significant players with $376 million deployed over the past two years,” she said.
Trading performance has strengthened considerably across the country, according to the latest data. National occupancy rates reached 72.8 per cent for the year to October 2025, up from 70.7 per cent the previous year.
“Average daily rates held steady at $155.3,9 and RevPAR (revenue per available room) climbed 2.5 per cent to $113.05 according to the latest STR Global data,” Ms Rader said.
Perth emerged as the standout performer among capital cities, with Ms Rader highlighting its exceptional growth.
“Perth delivered the standout performance with occupancy hitting 80.7 per cent, up from 78.6 per cent, while average daily rates surged 3.5 per cent to $153.29,” she said.
“The market has benefited enormously from major sporting events, concerts and entertainment, with strong demand from interstate and international visitors.”
Sydney maintained robust fundamentals with 80.5 per cent occupancy, while Melbourne improved to 73.2 per cent despite significant supply additions over recent years. Brisbane held steady at 76.0 per cent occupancy with daily rates at $161.08.
Traditional holiday markets have also performed well, with Ms Rader noting that “Cairns achieved 78.9 per cent occupancy and the Gold Coast maintaining 68.0 per cent occupancy.”
The positive operational metrics reflect recovering tourism demand, with international visitor spending reaching significant levels.
“International visitor spending reached $8.5 billion in the June quarter 2025, up 32 per cent on the previous year, with total annual spending hitting $55.4 billion,” Ms Rader said.
“China remains the highest spending market at 26 per cent of total international expenditure, with Chinese visitor spending jumping 46 per cent as that market continues recovering toward pre-pandemic levels.”
Despite economic pressures, domestic tourism has shown remarkable resilience, according to the research.
“Overnight trips remained stable at 112.6 million for the year to June 2025, with Australians continuing to prioritise holiday travel even while moderating their spending,” Ms Rader said.
Regional markets have benefited from changing travel patterns, with coastal towns experiencing increased demand as airlines add capacity on regional routes.
“The drive market remains particularly strong, with travellers taking advantage of school holidays to explore destinations within a few hours of major cities,” she said.
Looking ahead, Ms Rader believes the sector is well-positioned for continued growth.
“The combination of strengthening international arrivals, resilient domestic demand and improving operational metrics positions the hotel sector well for the summer trading period,” she said.
“With occupancies climbing and rate growth holding across most markets, well-located assets should continue performing strongly through the peak season ahead.”
