A new CBRE report shows Sydney recorded the highest hotel occupancy in the country in 2025, with the market benefiting from the city's gateway status, diverse events calendar and major project investment.

CBRE’s Hotels Australia Overview and Outlook report found Average Daily Rate (ADR) and Revenue Per Available Room (RevPAR) has exceed pre-pandemic levels nationally, with occupancy nearing full recovery.

RevPAR in Sydney increased nine per cent year-on-year to a record $279, extending the city's lead over other major markets.

Occupancy in Sydney averaged 83 per cent, the highest nationally, while the ADR reached a national high of $334, up five per cent year-on-year.

CBRE said demand in Sydney continued to favour luxury and
upscale product, aligning with the composition of new supply entering the market.

It also predicted that by 2028, hotel occupancy in Sydney could reach 87 per cent, the highest in the country.

CBRE Regional Director, Hotel Valuations Troy Craig said: “Hotel operating performance has recovered to cycle highs, underpinned by diversified demand growth from international arrivals, domestic leisure, corporate travel and major events.

"Sustained RevPAR growth across major markets has translated into renewed capital deployment with transaction volumes reaching approximately $2.7 billion in 2025 – the strongest result on record.”

The report said record high performance and transactions across Australia’s hotel sector in 2025 reflected a realignment of the market. It found offshore investors accounted for 78 per cent of
total transaction activity in 2025, up from 27 per cent in 2024.

Capital inflows were led by investors from Asia including Singapore, Thailand, China and Taiwan. While major portfolio activity saw US-based capital account for 40 per cent of transaction activity over the year.

Looking forward, CBRE forecasts transaction volumes will remain elevated and offshore capital is expected to remain active.

View the report here.