Soaring travel volumes are expected to drive stronger returns across Australia’s hotel sector, new CBRE forecasts reveal.
An uplift in international arrivals is set to add close to two million hotel room nights across key Australian cities by the end of 2026.
The data, detailed in CBRE’s From Runway to Room Nights report, shows that 56 new routes will deliver an additional 10,500 annual flights from core markets including China, India, Southeast Asia, North America and the Middle East.
We spoke to CBRE’s Head of Hotels Research, Ally Gibson, about the markets to watch.
An uplift in international arrivals is set to add close to two million hotel room nights across key Australian cities by the end of 2026.
The data, detailed in CBRE’s From Runway to Room Nights report, shows that 56 new routes will deliver an additional 10,500 annual flights from core markets including China, India, Southeast Asia, North America and the Middle East.
We spoke to CBRE’s Head of Hotels Research, Ally Gibson, about the markets to watch.
New Routes, New Demand
CBRE’s analysis models the impact of international air capacity by origin, frequency, and aircraft type on short-term visitor arrivals and hotel room demand.
The findings show the new routes will generate around 1.9 million additional hotel room nights by the end of next year, lifting average national hotel occupancy by 3.4%.
This comes as hotel construction slows due to cost pressures and project delays.
“Australia’s hotel development pipeline is tapering nationally, driven by high construction costs and feasibility challenges, which means that supply growth may lag the surge in international arrivals in many markets,” she said.
For investors, this imbalance can create an environment of stronger pricing power and potential for improved returns, particularly in cities with limited new supply.
“Occupancy is trending upward, average daily rates remain resilient, and investor interest is returning as market conditions stabilise,” Ms Gibson said.
“While construction costs remain challenging for new development, existing assets in high-demand markets are well-positioned to outperform.”
Sydney and Melbourne: Gateways with Global Pull
Sydney is expected to attract the largest share of additional international arrivals, with 13 new routes projected to bring 390,000 visitors and generate 542,000 room nights.
Melbourne follows with 12 new routes delivering an estimated 306,000 arrivals and 409,000 room nights.
Ms Gibson said major infrastructure projects alongside new transpacific and Asia-Pacific routes further strengthened both cities’ inbound markets.
“Sydney and Melbourne remain Australia’s primary international gateways, underpinned by strong global brand recognition and broad airline connectivity,” she said.
“These cities also offer diverse tourism, business, and events infrastructure, which enhances their ability for sustained hotel demand.”
Growth Extends North and West
While Sydney and Melbourne lead in total volume, Perth is expected to see the highest percentage jump, with nine new routes bringing 298,000 arrivals and 339,000 room nights.
Brisbane, boosted by a second runway and eight new services, is forecast to add 214,000 short-term visitors and 267,000 room nights.
“Brisbane and Perth have constrained supply pipelines and have experienced a strong increase in international air capacity, which could see occupancy gains of around 4%,” Ms Gibson said.
“Brisbane is particularly well-positioned to benefit from increased demand with major projects and exposure in the lead up to the 2032 Olympic Games.”
Further north, Cairns continues its shift toward premium, year-round tourism, with seven new routes generating 120,000 arrivals and 104,000 room nights.
Meanwhile, Adelaide is expected to see modest gains, with four new routes, including direct flights from San Francisco and Auckland, adding 143,000 arrivals and 102,000 hotel room nights.
By the Numbers:
Sydney: 13 new routes, 390,000 new arrivals, 542,000 projected room nights
Melbourne: 12 new routes, 306,000 new arrivals, 409,000 projected room nights
Perth: 9 new routes, 298,000 new arrivals, 339,000 projected room nights
Brisbane: 8 new routes, 214,000 new arrivals, 267,000 projected room nights
Adelaide: 4 new routes, 143,000 new arrivals, 102,000 projected room nights
Cairns: 7 new routes, 120,000 new arrivals, 104,000 projected room nights
