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Australia Key Markets Hotel Market Outlook– Q1 2025 – Image Credit Horwath HTL
This report by Horwath HTL in Australia offers an outlook for 10 key city markets across Australia, examining performance to June 2025 and the outlook for future growth.
The information as published in the report is based on the financial forecast by Deloitte Gain access to Economics for the June 2025 quarter, historical hotel efficiency from STR since June 2025, in addition to historic tourist information readily available as of March 2025, including anticipated domestic and global visitation from Tourist Research study Australia (TRA) as at December 2024, which has been changed by Horwath HTL.
Domestic visitor nights, albeit just until YTD March 2025, taped a decline year-on-year of 2.6%. Nevertheless, we do keep in mind that TRA has embraced a new method in approximating domestic tourism volumes and as such the year-on-year contrast must be assessed with caution. TRA’s forecast of growth for domestic visitor nights in 2025 was for 1.6% development.
Utilizing information up till May 2025, international short-term visitor arrivals to Australia are well below the TRA projection. YTD Might, short-term visitor arrivals to Australia have grown at a rate of 2.8% over the exact same period in 2024. This compares to a forecast of 11.1% for the complete year. The rate of worldwide tourism recovery continues to slow and a go back to pre-Covid 2019 levels is set to take longer.
The outlook is favorable throughout all 10 markets, though supply challenges remain in markets such as Melbourne, Adelaide and Hobart, which is leading to a longer-than-expected return to pre-Covid occupancy levels. Sydney continues to cement it’s leading market position and status as Australia’s finest hotel market for financiers.
Regardless of softer than forecast tourism data, only Canberra (ADR decrease), Gold Coast and Sunshine Coast (tenancy declines due to Hurricane Alfred) have seen negative RevPAR development YTD June 2025. Brisbane, Hobart, and Perth have all seen strong RevPAR growth, with Hobart’s growth driven primarily through enhanced tenancy, and Brisbane and Perth through continued strong ADR development.
The RevPAR growth outlook out to year-end December 2029 has moderated somewhat considering that Horwath HTL’s last report based upon December 2024 information. This is most likely driven by a weaker outlook for both worldwide and domestic tourism. Horwath HTL’s Econometric model has actually reduced the outlook for need volumes with the outlook for occupancy growth slowing a little throughout lots of markets.
Despite some strong ADR development YTD, ADR growth is expected to continue to moderate across many markets over the next 5 years, though this growth is now being determined off a higher base, so in outright terms, the ADR outlook has enhanced. RevPAR development moving on for crucial economic centres is forecast to be driven by both tenancy and ADR, while ADR development continues to be a prime driver of RevPAR development for leisure-driven markets with seasonal restrictions anticipate to limit future tenancy growth.
Overall, the outlook for the Australian hotel market remains positive in the long term regardless of short-term risks connected to economic unpredictabilities and imbalances between supply and demand.
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