Australia and New Zealand Hotel Markets Surge in 2025 Amid Tourism Rebound

Wednesday, June 18, 2025

Australia and New Zealand are experiencing a robust recovery in their hotel markets, with increased international investor interest and a rebound in tourism. The hospitality sector in both countries is seeing notable growth in hotel transactions, a surge in construction activity, and rising occupancy rates. According to the “Australia vs. New Zealand Market Comparison 2025” report by Global Asset Solutions, the hospitality industry in both countries is poised for continued growth, driven by a combination of factors, including a resurgence in tourism and the attractive investment climate.

The rise in hotel investments is particularly striking, as international investors, particularly from Asia and Europe, are increasingly looking to these markets for expansion opportunities. The decline in the value of the Australian and New Zealand dollars, along with lower debt costs, has made these markets more appealing to foreign buyers. This economic situation has spurred investor interest and activity, contributing to the uptick in hotel deals and developments across the region.

Tourism Recovery Fuels Hotel Sector Growth

Tourism has been a major catalyst for the recovery of the hotel sector in both Australia and New Zealand. For Australia, the tourism industry has exceeded pre-pandemic figures, with international visitor nights and trip spending surpassing 2019 levels by 2% and 3%, respectively, in the 2022-2023 financial year. According to projections, the number of international visitors to Australia is set to continue increasing, reaching an estimated 9.5 million trips by the end of 2025. This marks a significant 27% increase from 2019 figures, with the growth expected to continue through to 2028. The annual growth rate in international visitation is forecasted at 12.9% over the next five years.

In New Zealand, the tourism sector is seeing a similar upward trend. The country has witnessed a significant increase in both domestic and international visitors, particularly from Australia. The New Zealand Hotel Performance Focus Report shows that destinations like Queenstown, Auckland, and Rotorua are benefiting from the growing number of Australian visitors, as well as extended stays from international tourists. Queenstown, known for its outdoor adventure offerings, and Auckland, the country’s largest city, have both experienced a notable surge in hotel demand. The increase in visitor numbers has positively impacted occupancy rates and Average Daily Rates (ADR), leading to higher overall revenue per available room (RevPAR).

Surge in Hotel Transactions and International Investment

The hotel investment market in both Australia and New Zealand is booming, with international buyers showing keen interest in acquiring hotel properties across the two countries. According to Global Asset Solutions’ report, Australia recorded a $676 million transaction volume in the first quarter of 2025, a figure that is double the volume observed in the same period of 2024. This spike in hotel transactions highlights the growing confidence in the region’s hospitality market and the desire for investment in high-demand cities like Melbourne, Sydney, and Brisbane.

In New Zealand, the hotel market has also experienced significant activity. A standout deal in the first quarter of 2025 was the $180 million sale of the InterContinental Auckland Hotel, marking one of the largest transactions in the country’s hotel sector in recent years. The sale was made by Precinct Properties to Hotel Properties Limited, signaling the strength of New Zealand’s hotel market and the growing appetite for high-quality assets. The total volume of hotel transactions in New Zealand for the first quarter of 2025 reached $250 million, surpassing the combined volume of hotel deals in 2023 and 2024, and nearly matching the total transaction volume for all of 2022. This uptick in sales highlights the region’s attractiveness to foreign investors, especially those from Asia and Europe.

Hotel Construction and Development on the Rise

Hotel construction in both Australia and New Zealand is on the rise, driven by the increasing demand for accommodations as tourism rebounds. In Australia, approximately 1,800 new hotel rooms were added in 2024, primarily focused in Melbourne, which remains a hotbed for hotel development. There are plans for an additional 5,700 hotel rooms in the pipeline, indicating a strong forecast for the market moving forward.

Similarly, in New Zealand, 850 new hotel rooms were added in 2024, with a further 1,600 rooms currently under construction. New hotel developments are concentrated in high-demand destinations such as Queenstown, Auckland, and Rotorua, where tourism growth is outpacing supply, creating a strong incentive for more development. In Queenstown, which is known for its ski resorts and adventure tourism, new hotel developments are designed to meet the increasing demand for luxury accommodations. Auckland, New Zealand’s largest city, continues to see growth in both the corporate and leisure sectors, necessitating new hotel supply to meet the demands of business travelers and tourists alike.

Outlook for Australia and New Zealand’s Hotel Markets

The outlook for the hotel markets in Australia and New Zealand remains positive, with significant growth expected in both tourism and investments. As international tourism continues to recover and the region becomes a more attractive investment destination for international buyers, the hospitality sectors in both countries are likely to see continued growth.

In Australia, the hotel market will continue to be bolstered by rising tourism numbers, particularly from international markets such as China, Japan, and the U.S. Sydney, Melbourne, and Brisbane are projected to remain key hubs for hotel investment, with major hotel chains expanding their presence in these cities. Additionally, the increasing demand for luxury hotels and resorts in Great Barrier Reef and Gold Coast will continue to drive growth in the hospitality sector.

In New Zealand, destinations like Queenstown, Auckland, and Rotorua will continue to experience a surge in demand for accommodations. The growing popularity of eco-tourism and adventure travel will further stimulate the need for environmentally sustainable hotel developments in the coming years. Moreover, with a continued rise in international visitation from nearby Australia and long-haul markets, New Zealand is positioned for a strong recovery in its hospitality sector.

Conclusion

Australia and New Zealand are set to continue their strong recovery in the hotel sector, driven by rising international tourism and heightened interest from global investors. With an expanding pipeline of hotel developments, increased transactions, and a growing demand for accommodations, both countries are well-positioned to experience sustained growth in their hospitality industries over the next few years. As the tourism rebound continues, these regions are not only recovering from the impacts of the pandemic but also paving the way for a new era of hospitality growth.