Accommodation Australia (AA) has graded the nation’s accommodation sector as a "sold A-minus" in its hotel occupancy end-of-year report card.
AA CEO James Goodwin said occupancy figures showed an improved performance overall, with Sydney one of the top-performing cities.
“A good mix of international sporting and cultural events, world-class performers and festivals across the year definitely contributed to the results as well as renewed confidence in business events and corporate travel," he said.
“A record result for New Years’ Eve in Sydney provides a sense of optimism heading into 2026."
Sydney CBD saw a 5.2 per cent increase in its occupancy rate in 2025, rising to an average of 83.6 per cent for the year.
Data from CoStar shows major events delivered record-high monthly average daily rates and strong occupancy for Sydney hotels in December.
According to preliminary data from the property analytics provider average occupancy during December 2025 was 81.3 per cent (up 3.2 per cent year-on-year).
The average daily rate (ADR) was $349.06 (+11.1 per cent) and revenue per available room (RevPAR) was $283.68 (+14.7 per cent). RevPAR was the highest for any December in the market.
On New Year's Eve hotel occupancy reached 95.4 per cent and ADR and RevPAR climbed to $1009.10 and $962.95 respectively. Those were the highest ADR and RevPAR figures on record in the market and the first time ADR surpassed the $1000 mark.
Domestic corporate travel was a strong driver of occupancy during 2025, with the rise in working from home leading to a new trend where teams travel to meet each other in person.
“This has created almost a new category of people getting together a couple of times a year or once a year for either a strategy day or a team-building day," Mr Goodwin said.
"That’s created a new sense of people coming together, staying one night and utilising the hotel conference facilities as well."
Accommodation Australia Chair David Mansfield said the sector had a positive outlook for the year ahead.
“There is a strong sense that we can improve demand by working together as a sector with governments and other tourism stakeholders for sustainable growth,” he said.
Accommodation Australia will release its mid year-report card at the end of June 2026.
