Australia vs New Zealand Market Comparison 2025
- GAS
- 3 days ago
- 10 min read
Updated: 3 hours ago
This report offers a detailed comparison of the Australian and New Zealand hotel
markets as of 2025 and beyond.
As part of our series of reviews of the Asia Pacific Hospitality market, this report
examines Australia and New Zealand, focusing on their post-COVID recoveries. We shall
explore the structure, challenges, trends, and future outlook of the hotel industry in
Australia and New Zealand, highlighting their unique characteristics and shared
dynamics.
The hotel industry in Australia and New Zealand is a vital component of their economies,
deeply intertwined with tourism, which is a cornerstone of both nations. Renowned for
their breathtaking landscapes, vibrant cities, and rich cultural heritage, these countries
attract millions of domestic and international visitors annually. The hotel sector not only
accommodates these travellers but also drives employment, infrastructure development,
and economic growth.
Regional Key Metrics
In US$ | 2019 | 2024 | |
Australia | Total Rooms Occupancy ADR RevPAR | 280,000 72% 102 to 115 73 to 83 | 310,000 68% to 72% 122 to 134 83 to 96 |
New Zealand | Total Rooms Occupancy ADR RevPAR | 46,000 75% to 80% 88 to 118 66 to 94 | 50,000 70% to 75% 106 to 147 74 to 110 |
Singapore | Total Rooms Occupancy ADR RevPAR | 70,929 86.9% 200 174 | 72,000 85% 192 163 |
Hong Kong | Total Rooms Occupancy ADR RevPAR | 72,680 87% 189 164 | 90,000 85% 166 141 |
Phuket | Total Rooms Occupancy ADR RevPAR | 80,000 80% 128 102 | 85,000 80% 135 108 |
Bali | Total Rooms Occupancy ADR RevPAR | 151,000 72% 115 83 | 165,000 77.5% 120 93 |
There has been an 11% growth in inventory in Australia and a 9% growth in New Zealand. Occupancy is below the pre-COVID levels, but the average rate is up. Visitor arrivals have yet to return to pre-COVID levels, creating added pressure on both destinations. It is expected that by the end of 2025, visitor arrivals will exceed 2019 levels.
Australia Visitor Arrivals
New Zealand Visitor Arrivals
Looking at each country Individually:
Australia
In the 2023-24 financial year, international tourism in Australia made significant progress towards pre-pandemic levels. Key metrics, including spending, trips, and nights, improved compared to 2023. Both international visitor nights and trip spending surpassed 2019 levels by 2% and 3%, respectively, in the 2022-23 financial year.
However, international visitor numbers are still 25% below pre-pandemic levels. Key figures for 2023-24 include:
• International trips: 7.4 million, up 35% from 2023, and 85% of 2019 levels
• International nights spent: A$278.2 million, up 44% from 2023, representing 102% of 2019 levels.
• International spending: A$31.7 billion, up 45% from 2023, 103% of 2019 levels.
While overall visitation numbers are still below pre-pandemic levels, cities such as Brisbane, Perth, and Adelaide have surpassed 2019 figures for international visitor nights.
Sydney is nearly at par, with a 1% decrease from 2019. International spending has surged across major markets, although Melbourne, the Gold Coast, and Canberra remain below 2019 levels in terms of expenditure and visitation.
Here is a breakdown by city:
Domestic travel has stabilized post-pandemic, with the financial year 2023-24 yielding results similar to the previous year. Travel patterns show that while older Australians have maintained strong travel activity, younger Australians have reduced their travel. Additionally, there has been an increase in holiday interstate travel, but this was counterbalanced by a decline in interstate business travel for the 2023-24 financial year.
Key figures for 2023-24 include:
• Domestic trips: 113.8 million, up 2% from 2023, in line with 2019 levels.
• Domestic nights spent: 399.9 million, down 2% from 2023, in line with 2019 levels.
• Domestic spending: A$109.9 billion, up 1% from 2023, 141% of 2019 levels.
International Inbound Tourism Forecasts
Looking ahead, recent forecasts indicate encouraging projections resulting from sustained growth in inbound travel, as well as the return and commencement of new travel routes to Australia. Tourism Research Australia (TRA) forecasts that international visitation will surpass pre-pandemic levels by the end of 2025, reaching 9.5 million trips. By 2028, it is expected to reach 12.1 million visits, 27% above 2019 levels, with a projected growth rate of 12.9% over the next five years.
Key markets driving this growth include New Zealand, Japan, Hong Kong, Singapore, and Malaysia. New Zealand and Japan have already surpassed pre-pandemic travel levels, while China is lagging at 74% of its historic levels. By 2028, China is expected to contribute significantly to the rise in international arrivals, with an additional 1.3 million trips compared to 2023.
Australia’s hotel industry is a dynamic and diverse sector, catering to a wide range of travellers. Major cities like Sydney, Melbourne, Brisbane, and Perth dominate the market, offering luxury, mid-scale, and budget accommodations. Regional areas, such as the Great Barrier Reef, Uluru, and wine regions like Barossa Valley, also feature specialized lodgings. In 2023, Australia welcomed approximately 8.7 million international tourists, nearing 85% of pre-pandemic (2019) levels, signalling a strong recovery. Domestic tourism remains robust, contributing 60% of total tourism spending in 2022–23.
Key Players and Market Structure
A mix of international chains and local brands characterises the industry. Global giants like Accor, Marriott, Hilton, and IHG operate alongside Australian-owned groups such as Mantra Group (part of Accor) and EVT Hotels.
Luxury properties, such as Crown Towers and Qualia on Hamilton Island, cater to highend travellers, while budget chains like Ibis and Travelodge serve cost-conscious guests. As of 2023, Sydney and Melbourne account for over 50% of Australia’s hotel inventory, with average occupancy rates rebounding to 72% (up from 44% in 2021).
Economic Impact
According to the Australian Bureau of Statistics, tourism directly contributes 2.9% to Australia’s GDP, mainly through spending on accommodation, food, and recreation, with the hotel sector being central to this contribution.
Tourism's role becomes even more significant when considering the total economic impact. The WTTC projected that the broader tourism sector would contribute A$265.5 billion in 2024, making up about 10% of Australia’s economy, including indirect and induced effects. Before the pandemic, tourism employed over 660,000 people, and by 2023, recovery efforts had restored around 93% of these jobs – 621,000 in total.
Current Trends
1. Sustainability: Eco-certifications (e.g., EarthCheck) and initiatives like carbon-neutral stays are increasingly prioritised.
2. Indigenous Tourism: Partnerships with Aboriginal communities offer cultural experiences, such as guided tours and art-integrated hotel designs. Technology: Contactless check-ins, AI-driven concierge services, and dynamic pricing algorithms are becoming standard.
3. Luxury and Experiential Travel: Demand for boutique hotels and “unique stays” (e.g., glamping, vineyard resorts) is on the rise.
New Zealand
New Zealand’s hotel industry, though smaller in scale, is equally tourism-dependent. Key destinations include Auckland, Queenstown, Wellington, and Rotorua, with adventure tourism (e.g., skiing, bungee jumping) and film tourism (Hobbiton) driving demand. In 2023, international arrivals reached 2.9 million, 80% of 2019 levels, while domestic travellers filled 35% of hotel rooms. Over half (56%) of New Zealand’s hotel inventory consists of properties with fewer than 50 rooms.
This poses a challenge for international hotel brands, which typically prefer to affiliate with, franchise, or manage hotels with at least 50–100 rooms, depending on the brand's positioning and market strategy. Despite this, there is an opportunity: with so many small hotels in the country, the most viable path for international brands to grow in New Zealand may be through franchising smaller properties, particularly those that fall under brands designed explicitly for limited-service or boutique-scale operations.
The delayed completion of the New Zealand International Convention Centre (NZICC) in Auckland is cited as one of the issues impacting busy levels in the city. In late 2019, a fire broke out on the roof of the complex as it was under construction, the project was stalled as liability issues were resolved, but it is now scheduled to open in February 2026.
International visitor numbers to New Zealand are steadily rising, edging closer to preCOVID-19 levels. This rebound in tourism is driving up hotel room rates in popular destinations such as Queenstown, Christchurch, and Rotorua, according to the latest New Zealand Hotel.
Market Snapshot by Colliers Hotels. Data from Hotel Data New Zealand, analysed by the Colliers team, shows that Queenstown's revenue per available room (RevPAR) increased by 6.5 per cent to NZ$239 for the year ending 31 March 2025. The rise follows a record average daily rate of NZ$673, which was reached on 31 December 2024.
Christchurch and Rotorua also experienced growth, with RevPAR increasing by 5% and 3%, respectively, over the same period. In contrast, New Zealand’s main centres, Auckland and Wellington, experienced a 10% drop in RevPAR year-over-year. The 2026 opening of the New Zealand International Convention Centre (NZICC) in Auckland is a promising development. Projections suggest it will attract 33,000 new international visitors and contribute 101,000 additional visitor nights annually.
Visitor volumes from Australia and the United States are substantial, and Chinese tourism has also seen significant growth over the past year. Hotel transactions have remained limited due to the lingering effects of the pandemic and economic uncertainty.
Key Players and Market Structure
International brands, such as Sofitel, Novotel, and Hilton, coexist with local operators like Millennium & Copthorne and Scenic Hotel Group. Queenstown, a hub for luxury and adventure seekers, boasts high-end properties like Eichardt’s Private Hotel. Following the COVID-19 pandemic, average occupancy rates rose to 68% in 2023, with RevPAR (Revenue per Available Room) increasing by 15% year-over-year.
Economic Impact
According to Stats NZ in 2019, tourism contributed NZ$16.2 billion to the economy, accounting for 5.8% of the country's GDP. It directly employed 229,566 people, which represented 8.4% of the workforce, making it a key component of New Zealand's economy. However, by 2024, the sector's direct GDP contribution had declined to or 4.4% (NZ$17.0 billion), and employment dropped to 182,727 people.
Trends and Innovations
1. Sustainability Leadership: Qualmark’s sustainability certification and carbon-zero pledges (e.g., Hotel Britomart) set global benchmarks.
2. Māori Cultural Integration: Hotels incorporate Māori design elements and cultural storytelling, enhancing guest experiences.
3. Adventure Tourism Synergy: Partnerships with tour operators offer packaged deals (e.g., ski-and-stay in Queenstown).
4. Tech Adoption: Virtual reality previews of rooms and AI-powered demand forecasting are gaining traction.
New Supply
There has been significant new development in Melbourne, and this inventory has been slow to be absorbed. Melbourne's supply appears to be peaking, and an improvement in occupancy is expected in the city. New supply is being added to key cities in Australia, but development in New Zealand is modest.
In Australia, during 2024, about 1800 rooms were added to the supply. Additionally, 5,700 rooms are under construction and expected to open between 2025 and 2026. On the other hand, in New Zealand, it’s estimated that around 850 new rooms were added to the national inventory last year, and approximately 1600 hotel rooms are under construction across the country as of mid-2024.
Notable New Hotel Supply 2024/25
Key Hotel Transactions 2024/25
M&A Activity
Following a buoyant run over the preceding years, Australia’s hotel transactions market saw a subdued 2024, with JLL reporting investment volumes were down 34% on the year to A$1.69bn, 23% below the 10-year long-term average of A$2.18bn.
The mid-market (below A$40m) drove the majority of the 51 deals closed, with limited institutional-level transactions and local investment accounting for 81% of the overall volumes. Metropolitan markets accounted for 55% of total volumes (A$921m) and 45% of the number of deals.
The top five deals, which accounted for over a third of total volumes (A$645m), were spread across five different markets, including the InterContinental Sydney Double Bay (bought for residential redevelopment), Bannisters Portfolio, Esplanade Hotel Fremantle, Four Points by Sheraton Docklands, and Hotel X Fortitude Valley.
Despite a slow start to 2024, investor confidence is on the rise. This improvement is driven by several factors: lower debt costs, a weaker Australian dollar that is attracting international investors, and the return of Asian investors from markets like the UK, Europe, and Japan. These investors had previously been inactive or looking for investment opportunities elsewhere.
An easing of the bid/offer mismatch that has characterised the lack of sell-side enthusiasm or buy-side confidence is easing, suggesting a stronger 2025 is likely. Colliers, for example, reported A$676 million of sales in the first quarter, double the amount recorded in the same period in 2024. Continued RevPAR growth and a rebound in inbound travel are expected to drive a good year.
Similar factors are at play in New Zealand, with March 2025 recording the largest single asset sale to date: the NZ$180m sale by Precinct Properties to Hotel Properties Limited of the 139-room InterContinental Auckland Hotel.
The deal meant that the total volume of NZ$250m in Q1, as reported by Colliers, exceeded the total of both 2023 and 2024 full years and was almost as much as the total for all of 2022. It was approximately 60% of the record, around NZ$430m, as seen in hotel deals for the whole of 2021.
Another aspect of interest is the increased interest in acquiring portfolios and hotel operating platforms by international groups seeking to gain the scale necessary to support growth in the region. Whilst no foremost transactions were recorded, anecdotal evidence suggests particular interest from European groups. In addition, white-label operators have begun to enjoy a surge as owners seek to gain greater influence by converting HMA to a franchise. For example, notable newcomer Trilogy saw 15 assets added to its roster during the year.
Shared Challenges
The two countries face multiple challenges to drive the bottom line performance seen in other destinations in the Asia Pacific region.
1. Labour Cost and Shortages: Both nations face skilled workforce gaps post-COVID, exacerbated by tightened immigration policies. Labour costs are the highest in the region, and as a result, Full-Time Equivalents are very low compared to those in Hong Kong and Singapore.
2. Rising Operational Costs: Inflation, energy prices, and supply chain disruptions squeeze profit margins. Included in this is the cost of travel to the destinations, as airline ticket pricing costs increase.
3. Climate Change: Environmental pressures, such as coral bleaching in Australia and glacier retreat in New Zealand, pose threats to natural attractions.
4. Competition from Alternative Accommodations: Airbnb controls 12% of Australia’s lodging market and 15% in NZ, prompting regulatory debates.
Market Performance Comparison
Conclusion
The hotel industries in Australia and New Zealand are navigating post-pandemic recovery with resilience and innovation. While challenges such as labour costs, shortages, and climate change persist, trends toward sustainability, cultural integration, and technological adoption offer pathways for growth. As these nations continue to leverage their unique landscapes and cultural assets, their hotel sectors will remain integral to global tourism, poised to adapt and thrive in an evolving market.
GLOBAL ASSET SOLUTIONS is the leading Hotel Asset Management Company serving Europe, Middle East and Asia Pacific. The Asset Management and Advisory division provides a comprehensive range of hotel services. Contact us for more info on how we can help you make the soundest investment decision and grow your asset value.
Authors:
Douglas Louden
Senior Hotel Asset Manager
Robert Walters
Chief Investment Officer
Juan Manuel Gea
Corporate Business Manager
Alex Sogno
Chief Executive Officer
