Australia’s tourism sector is thriving like never before, capturing global attention with its breathtaking landscapes, bustling cities, and rich cultural heritage.
This sustained vibrancy is mirrored in the robust performance of the hotel sector, which continues to flourish amidst rising consumer demand. The resurgence in tourism has led to a striking increase in hotel supply and strong occupancy rates, further boosting the industry’s expansion.
With more visitors flocking to Australia, this sector continues to thrive, offering an array of accommodation and venues that cater to the varied needs and preferences of tourists.
This extraordinary growth, achieved against a backdrop of global challenges, underscores the magnetic allure of Australia’s diverse attractions, captivating both domestic and international travellers alike.
Australia continues to rate among the top five global destinations for tourism and travel. Tourism Research Australia found there was a staggering 7.2 million international trips to the ‘Sunburnt Country’, recorded in the year ending March 2024.
The primary driver of this influx was holiday travel, accounting for 2.9 million trips. The Australian Bureau of Statistics further supports this positive trend, reporting that short-term visitor arrivals increased by 17.3%, reaching 600,780, while short-term resident returns rose by 14.2%, totalling 807,920.
These figures indicate a strong return of both international visitors and Australian residents, contributing to the buoyancy of the hospitality industry. This steady recovery in international arrivals signals a strong and sustained interest in Australia’s unique attractions and hospitality.
According to the World Travel & Tourism Council, last year, domestic visitors alone set a new record for total spending in Australia, hitting $146 billion—a new high since 2018.
This upward trend is set to continue, with forecasts predicting spending will reach nearly $148 billion in 2024 and soar to almost $180 billion in 2034.
Despite reopening its border later than many other major destinations around the world, in 2023, spending by overseas visitors surged by nearly 195%, ranking Australia 10th globally for growth in international visitor spending. The growing demand for quality accommodation highlights the need for more hotels and resorts, creating lucrative opportunities for investors.
According to IBISWorld, the market size of the Hotels and Resorts industry in Australia, measured by revenue, was a staggering $1.6 billion in 2023. This represents an impressive 31.4% increase from the previous year, highlighting the sector’s solid recovery and growth potential.
Further supporting this outstanding growth, research by Statista found that as of the first quarter of 2024, there were over 4,870 hotel rooms under construction and due to open in 2024/25. Melbourne accounted for the largest number of new hotel room constructions across the country, with over 1,572 new rooms being added to the city.
Investing in Australia’s hotel industry appears to be a strategic move, given the solid recovery and significant growth indicators. The sector’s ability to bounce back and thrive amidst global uncertainties demonstrates its resilience and potential for sustainable growth.
In terms of investment, Australia’s hotel market is increasingly attracting interest from international investors. The stable economic environment, coupled with the booming tourism sector, makes it a lucrative destination. Investors are not only focusing on established cities like Sydney and Melbourne but also exploring emerging destinations that offer growth potential.
Australia’s tourism resurgence will continue to drive the hotel boom, marked by significant increases in visitor numbers, tourism spending, and hotel industry revenue. The country’s diverse attractions, resilient tourism demand, and strategic opportunities for investment make it an ideal destination for travellers and investors alike.
The future of Australia’s hotel industry looks promising, with strong growth indicators and numerous opportunities for savvy investors to capitalise on.