Australia Hotel Market to Surge to USD 21.4 Billion by 2033

Australia Hotel Market Overview

Market Size in 2024: USD 7.6 Billion

Market Size in 2033: USD 21.4 Billion

Market Growth Rate 2025-2033: 11.3%

According to IMARC Group's latest research publication, "Australia Hotel Market Report by Hotel Type (Business/Commercial Hotels, Boutique Hotels, Resort Hotels, Casino Hotels, Transit Hotels, Bed and Breakfast Hotels, and Others), Business Model (Independent, Chain), Room Capacity (Small, Medium, Large, Very Large), Price Level (Luxury, Upscale, Midscale, Economy), and Region 2025-2033", The Australia hotel market size reached USD 7.6 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 21.4 Billion by 2033, exhibiting a CAGR of 11.3% during 2025-2033.

How AI is Reshaping the Future of Australia Hotel Market

• Revolutionizing Guest Experience Personalization: AI-powered recommendation engines analyze guest preferences, booking history, and behavioral patterns to deliver tailored experiences across luxury hotels, boutique properties, and resort hotels in Sydney, Melbourne, Brisbane, and regional destinations, enabling personalized room settings, dining suggestions, and activity recommendations that enhance satisfaction while supporting the industry's shift toward premium offerings commanding higher rates.

• Optimizing Revenue Management: Machine learning algorithms process real-time market data, competitor pricing, seasonal demand patterns, and major event schedules to dynamically adjust room rates across business hotels, serviced apartments, and conference facilities, maximizing occupancy and revenue per available room while helping properties capitalize on the $120 billion infrastructure investment pipeline driving increased business and leisure travel throughout Australia.

• Streamlining Operations and Efficiency: Artificial intelligence automates routine tasks including check-in/check-out processes, housekeeping schedules, maintenance requests, and inventory management across independent hotels and international chains, reducing operational costs and labor requirements while enabling staff to focus on high-value guest interactions that differentiate premium properties in competitive markets like Sydney where $432 million in hotel transactions occurred in 2025.

• Enhancing Contactless Technology: AI-driven mobile applications and digital concierge services enable touchless room access, virtual check-in, voice-activated room controls, and automated service requests that meet post-pandemic traveler preferences for minimal physical contact while supporting the 1,800 newly added rooms across Australia with 56% in the premium segment requiring modern technology infrastructure.

• Improving Sustainability Management: Machine learning analyzes energy consumption, water usage, waste generation, and carbon emissions across hotel operations to identify optimization opportunities supporting eco-friendly practices increasingly demanded by environmentally conscious travelers, helping properties reduce costs while meeting sustainability certifications that differentiate boutique hotels and eco-resorts expanding into regional coastal towns, national parks, and rural areas beyond metropolitan centers.

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Australia Hotel Market Trends & Drivers:

The Australia hotel market is experiencing robust growth driven by expanding tourism and resurgent international travel. According to the Australian Bureau of Statistics, February 2023 recorded 600,710 short-term visitor arrivals with annual increases of 510,250 trips demonstrating strong recovery. International arrivals are now only 13% below pre-pandemic levels, driven by demand from China, India, and Southeast Asia. Tourism recovery has been significantly boosted by 60 new international flight routes added in 2024/2025, with two-thirds connecting to East and Southeast Asian destinations alongside North American, European, and Middle Eastern routes. This strategic airline expansion responds to pent-up demand and is expected to substantially boost inbound tourism in 2025, fueling high occupancy rates across luxury hotels, budget accommodations, and resort properties throughout major cities and regional destinations.

Substantial government infrastructure investment represents the second major catalyst through enhanced connectivity and destination development. The Australian government committed $120 billion over 10 years for infrastructure projects, with $96.5 billion allocated through the Infrastructure Investment Program beginning in 2024-25. Sydney, Melbourne, and Brisbane are experiencing significant upgrades in airports, transport systems, and tourist facilities directly impacting hospitality capacity. Regional airport expansions have opened previously untapped markets, increasing hotel occupancy beyond metropolitan areas. International chains are establishing new properties with 5,700 rooms under construction. Sydney recorded $432 million in hotel transactions in 2025 year-to-date, followed by Melbourne with $258 million, while offshore investors from Singapore and global funds have become increasingly active in Brisbane and Hobart.

Rising business travel and premium accommodation demand provides the third critical driver strengthening the sector in corporate destinations. Major Australian cities have gained reputation as favored venues for business events and conferences, driving demand for five-star hotels, serviced apartments, and conference centers. Rising disposable income among Australians and international tourists enables increased spending on luxury accommodations, particularly in major urban areas and tourist locations. Notable new openings include The Oscar luxury hotel in Barossa Valley ($50 million, 70 rooms), Andaz Gold Coast (202 rooms under Hyatt), Crowne Plaza Macquarie Park, and Hyatt House South Melbourne targeting extended-stay experiences. International hotel chains introduce established reputations and loyalty programs setting new service benchmarks while broadening accommodation choices from luxury to economical options across the market.

Australia Hotel Industry Segmentation:

The report has segmented the market into the following categories:

Hotel Type Insights:

• Business/Commercial Hotels

• Boutique Hotels

• Resort Hotels

• Casino Hotels

• Transit Hotels

• Bed and Breakfast Hotels

• Others

Business Model Insights:

• Independent

• Chain

Room Capacity Insights:

• Small

• Medium

• Large

• Very Large

Price Level Insights:

• Luxury

• Upscale

• Midscale

• Economy

Regional Insights:

• Australia Capital Territory & New South Wales

• Victoria & Tasmania

• Queensland

• Northern Territory & Southern Australia

• Western Australia

Recent News and Developments in Australia Hotel Market

• September 2025: CBRE Asia Pacific Hotels & Hospitality report revealed hotel investment volumes reached USD 12.1 billion year-to-date as of August 2025, on track to approach the record high of USD 16.3 billion set in 2024, with Australia continuing to drive significant investment volume alongside Japan and Korea across the region.

• Mid-2025: Multiple luxury hotel openings transformed Australia's hospitality landscape including Andaz Gold Coast (202-room property under Hyatt's first Australian Andaz brand), The Oscar in Barossa Valley ($50 million six-star luxury hotel with 70 rooms), and Crowne Plaza Macquarie Park following comprehensive refurbishment, with over 5,700 rooms under construction demonstrating sustained expansion momentum.

• March 2025: CBRE Australia report confirmed tourism recovery accelerated by addition of 60 new international flight routes and expansion of existing services in 2024/2025, with two-thirds connecting to East and Southeast Asian destinations alongside new North American, European, and Middle Eastern routes, strategically responding to pent-up demand particularly from Asian markets.

Competitive Landscape:

The competitive landscape of the industry has also been examined along with the profiles of the key players.

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