Colliers latest Capital Markets Investment Review reports a 75 per cent surge in transaction volumes, driven by premium asset sales and offshore capital re-engagement.
Australia’s hotel investment market rebounded strongly in 2025, with transaction volumes climbing to $2.7 billion, a 80 per cent increase on 2024 and 58 per cent above the long-term average, signalling renewed confidence and a return to baseline momentum.
According to Colliers’ latest Capital Markets Investment Review, 67 assets changed hands during the year, with the average deal size rising to $40 million, underscoring the depth and resilience of the sector.
Premium assets dominated activity, with 13 transactions above $50 million accounting for 67 per cent of total deal flow, more than double the level recorded in 2024. Landmark deals included Ayers Rock Resort in the Northern Territory, Park Hyatt Melbourne, Melbourne Place in Victoria and a 50 per cent stake in Ritz-Carlton Perth. The announcement of Blackstone’s proposed acquisition of Hamilton Island in late 2025 highlights further the current momentum and provides a strong footing for deal flow in 2026.
Offshore capital re-engaged strongly, representing 49 per cent of total deal flow, led by Thai, US and Singaporean investors seeking stability amid global uncertainty.
Karen Wales, Head of Hotels, Transaction Services at Colliers, said, “2025 marked a turning point for the Australian hotel sector. Transaction volumes surged as confidence returned, supported by strong trading performance and a more stable interest rate environment. The resurgence of premium asset sales and the re-entry of offshore capital highlight Australia’s position as a safe haven for global investors.”
“The diversity of buyers in 2025 was striking. Family offices and high-net-worth individuals accounted for a third of total deal flow, reflecting a growing appetite for long-term, legacy assets. These groups are less reliant on leverage, which makes them highly competitive in a high-rate environment.”
“Elevated replacement costs and constrained development pipelines mean existing assets are trading below replacement cost, a rare arbitrage opportunity for investors. This window won’t last, but those who move early will secure superior risk-adjusted returns,” Ms Wales added.
Looking ahead, 2026 remains positive, with transaction volumes forecast to average $3 billion and potentially exceed that level if several landmark deals currently in play are finalised.
“We expect heightened bid activity in 2026 as investors capitalise on limited new supply and robust tourism fundamentals. International visitor nights and spend are already surpassing pre-pandemic levels, and the Rugby World Cup in 2027 will deliver a step-change in market returns. Assets offering unique positioning, such as heritage landmarks, lifestyle hotels, and properties catering to wellness and cultural experiences, will continue to command premium interest.”
“Australia’s hotel sector has demonstrated resilience through cycles and continues to outperform global peers. With strong tourism demand, a stable political environment, and a transparent market, hotels remain a compelling asset class for both domestic and offshore investors,” Ms Wales noted.
Tourism Research Australia forecasts international visitor arrivals to increase by 5.2% in 2026 and 5.2% in 2027. Domestic tourism is projected to continue its steady growth path with growth in visitor nights of 1.4% in 2026 and 2.4% in 2027 when the country plays host to the Rugby World Cup (RWC).
All Australian hotel markets recorded growth in 2025 and with notable outperformance in Perth, Sydney, Brisbane, Hobart and Adelaide. Whilst most segments recorded growth, it is Australia’s passion for experiences which continues to drive significant interstate travel as Australians cross state borders to experience concerts, sporting matches, and other major events. Luxury and upper-upscale segments led growth, with ADR premiums of more than 30 per cent in major markets.
With only 7,300 rooms under construction across Australia’s ten major markets and openings expected to peak in 2026, supply constraints will further support pricing power.
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