In HM’s 2025 Australasian Development Outlook, Trilogy Hotels Chief Executive Officer, Scott Boyes, shares key opportunities and insights into Australasia’s evolving hotel development landscape.
Source: Ruth Hogan, HM Magazine
There are exciting times ahead as we navigate through 2025. Australia’s hotel sector, whilst choppy, continues to demonstrate remarkable resilience with national occupancy rates at 71% and RevPAR up 3.8% to $171. Despite ongoing challenges, this growth creates a landscape ripe with both hurdles and opportunities.
Sydney leads the recovery charge with occupancy at 78% and RevPAR growing to an impressive $215, making this market our standout performer. Conversely, Melbourne and Hobart continue to face headwinds from supply increases and slightly softening domestic leisure demand.
In New Zealand, we see a similar dichotomy—Queenstown, Christchurch, and Rotorua benefit from returning international visitors. Auckland is grappling with increased room inventory, and Wellington is adjusting to reduced government spending.
Third-party management, stakeholder experiences, and technology integration are key trends reshaping our industry. Eco-certified properties are no longer niche but necessary, with major operators prioritising this. The premium/luxury segments continue to expand, particularly with branded residences attracting both domestic and international guests.
The premium and experiential hotel segments present compelling opportunities. Properties offering immersive experiences command premium rates as travellers increasingly value authenticity over standardisation. We’re also seeing strong performance in market mix diversity, where segments combine to offset the ups and downs of current economic and global conditions.
After subdued transaction activity in 2024 ($1.25 billion in transactions to October), we anticipate increased momentum in 2025 as interest rates plateau. While construction costs have tempered new developments, this has heightened the value of existing assets, particularly in supply-constrained markets. In addition, developers are also sourcing creative ways to deliver economically viable hotel projects.
Introducing 60 new international flight routes enhances Australia’s connectivity to key Asian markets, North America, and Europe, further strengthening investment fundamentals for strategically positioned assets.
For Trilogy Hotels, we are excited and optimistic about the future. We remain focused on markets demonstrating strong performance outcomes for owners while selectively exploring opportunities in emerging destinations where we can leverage these evolving consumer preferences and travel patterns.