Australia’s hotel sector is set to see a boom in business thanks to new international flight routes, with CBRE anticipating demand for up to 1.9 million room nights annually by the end of 2026.
CBRE’s From Runway to Room Nights report found that 56 new routes have added 10,500 annual flights into key Australian cities, which could lift Australia’s hotel occupancy by an average of 3.4% by the end of next year.
“Increased capacity from core markets including China, India, Southeast Asia, North America and the Middle East is expected to drive a continued recovery in international arrivals, reinforcing aviation’s role as a critical lever for tourism and hotel sector growth,” said CBRE’s Head of Hotels Research, Ally Gibson.
“As these new services mature and inbound visitation continues to recover, the uplift in demand is expected to increase occupancy and RevPAR levels across key markets as Australia’s hotel development pipeline enters a sustained period of limited supply, driven by escalating construction costs and productivity constraints.”
CBRE Hotel’s Troy Craig says supply constrained markets such as Brisbane, Perth and Cairns are particularly well positioned to benefit.
“Meanwhile, the gateway markets of Sydney and Melbourne, underpinned by strong corporate and leisure-based demand and major event schedules, are expected to sustain elevated levels of international arrivals and translate this into continued performance growth,” said Craig.
CBRE predicts Sydney will see the largest uplift in demand, with 13 new flight routes projected to generate around 390,000 additional short-term arrivals and drive an expected 542,000 room nights by the end of 2026.
Melbourne will benefit from 12 new international routes, adding around 306,000 short-term arrivals and an expected 409,000 room nights by the end of 2026.
“As hotel supply begins to moderate, the increase in demand is expected to assist in absorbing recent additions and drive improved performance momentum,” according to CBRE.
“With nine new direct services, primarily from Southeast Asia and the Middle East, Perth is forecast to experience the highest percentage growth in international arrivals, with 298,000 new short-term arrivals, generating an expected 339,000 additional room nights.
“Brisbane’s new flights align with strategic inbound travel growth and capacity gains following the completion of its second runway. Eight new routes from various origins including North America and Asia are expected to generate around 214,000 new short-term arrivals and create demand for an expected 267,000 room nights.
“With four new international routes including direct flights from San Francisco and Auckland, Adelaide is set to welcome around 143,000 additional short-term visitors, translating into demand for an expected 102,000 room nights.
“Cairns is meanwhile expected to continue its evolution into a year-round premium leisure market, with seven new flight routes set to deliver around 120,000 new short-term arrivals, generating an expected 104,000 room nights.”