Insights  /  Hotels

Rate is doing the heavy lifting. Occupancy is the gap.

Australian hotels have grown RevPAR mostly through rate. With occupancy flattening across most markets, the unfilled night is where the next gain sits.

Australian hotels have had a strong run. CBRE reports RevPAR growth above 8% across most major cities in 2025, led by Sydney and Brisbane. Look a little closer, though, and most of that growth came from rate.

What the numbers say

  • Horwath HTL's Q2 2026 outlook expects ADR growth to outpace occupancy in every market it tracks except Canberra.
  • It forecasts occupancy growth below 1% this year for Melbourne, Brisbane and Adelaide, and a decline for Newcastle.
  • In Adelaide, CoStar reported demand up year on year in May 2026, yet occupancy fell 0.9% as new rooms opened faster than demand grew.
  • CBRE notes that peak event periods typically lift ADR around 40% above average trading levels.
When rate has done the heavy lifting, the unsold room night is where the next gain sits.

Why it matters for your hotel

Rate growth cannot run forever. Guests notice, comp sets respond and new supply arrives. Horwath HTL expects ADR growth to moderate across most markets over the next five years. The hotels that keep growing will be the ones that fill the nights others leave empty.

Those nights are rarely random. They cluster: the soft Tuesday in March, the shoulder week nobody priced for, the segment that drifted to an OTA and never came back.

Three places to look this week

  • Your next 90 days, by night. Mark every night running below the same night last year. Once it is on one page, the pattern is usually obvious.
  • Your channel production. Compare what each channel costs per room night with what it brings. One of them is almost always more expensive than it looks.
  • Your event calendar. If peak event nights carry a premium in your city, check that your pricing captures it, and that the nights either side are not giving it back.

This is exactly what our Performance Gap Check does: your three biggest gaps, one action for each and what each is worth, within three business days of receiving your data. Request yours here.

Performance Gap Check

What is your biggest gap?

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What we need from you

  • Your next 90 days of bookings or sales, by day
  • 12 months of utilisation and average price
  • 12 months of sales by channel
  • The three competitors you watch most closely