Savills Hotel 2025 Transaction Review and 2026 Outlook
An analysis of hotel investment trends
This report provides a comprehensive overview of conditions in the Australian hotel market, with a particular focus on hotel transaction activity in 2025, including volumes, deal sizes, geographic distribution, and buyer profiles, and assesses how macroeconomic conditions are influencing investor decision-making. Particular attention is given to the growing preference for existing, well-located, and income-producing assets, alongside increasing interest in value-add and conversion opportunities, including Build-to-Rent, co-living, and other alternative living sectors. The report also analyses hotel trading performance across major cities and regions, highlighting robust growth and the continued post-pandemic recovery of the sector.
Australian hotel accommodation investment volumes remained steady at approximately $1.9 billion, broadly in line with long-term average liquidity levels and underscoring the sector’s resilience. Transaction activity was concentrated in the mid-market segment, with deals of up to $30 million increasing by 12.5% year-on-year, while the upper end of the market recorded six single-asset transactions above $80 million, in line with previous year (five transactions).
International capital re-emerged as a major driver of activity, accounting for 46% of total transaction volume, up significantly from 12% in the previous year. Investors from Thailand and Singapore were particularly active, together representing 26% of total investment volume.
The year also saw a landmark transaction with Blackstone’s acquisition of Hamilton Island for an estimated $1.2 billion. Although excluded from the Savills hotel transaction totals analysis due to its diversified and multi-asset nature, which included an airport infrastructure, the deal highlights sustained institutional appetite for iconic, experience led leisure assets.
The buyer landscape in 2025 became increasingly diverse, with greater participation from private groups, investment funds, and owner-operators, many of whom targeted assets offering conversion potential into residential and living-sector uses. Operational performance across the Australian hotel market remained strong, with national RevPAR increasing by an average of 6.7%, led by standout growth in Perth (+11.2%), Brisbane (+8.9%), Hobart (+8.5%), and Sydney (+8.2%).
Looking ahead, despite recent monetary policy tightening, the outlook remains positive. An expanding pool of active Asian and domestic capital continues to seek deployment into high-quality, investment-grade hotel assets, supporting confidence in sustained transaction activity and ongoing strength in hotel trading performance over the next 12 months.