International visitation accelerated in CY25, reinforcing Sydney’s gateway city status

• Latest figures from Sydney Airport show total passenger traffic for 2025 at 42.5 million passengers. This reflects a 2.8% increase on the prior year, driven largely by a strong recovery in international passengers, which increased by 5.3% in YTD Q4 2024.
• Sydney’s international visitation continued its strong upward trajectory through the year ending December 2025, with Tourism Research Australia recording 3.8 million overseas visitors (+8.2% Y-o-Y), 88.2 million nights stayed and expenditure of AUD13.7 billion (+26% Y-o-Y).

Supply cycle moderates with no new hotels opened in Q1 2026

• No new hotel rooms were added to the Sydney market in the first quarter, following the most recent completions of 25hours Sydney and Caption by Hyatt Central Sydney in the final quarter of 2025.
• There are currently five hotels under construction in Sydney’s CBD, set to add 1,129 new rooms, or 4.9% of existing stock, over the next two years. However, future supply is expected to remain constrained due to limited site availability and elevated construction costs.

Sydney retains its highest RevPAR position in Australia heading into 2026

• Sydney maintained its leading position as Australia’s highest-performing hotel market through 2025, recording the strongest occupancy, ADR and RevPAR nationally. This momentum has continued into Q1 2026, reflected in further ADR and occupancy growth.
• A scarcity of market opportunities held Sydney’s transaction volumes to AUD382.6 million in 2025, a figure well below long-term averages. However, the market remains highly sought after, with a number of notable exchanged deals expected to close throughout 2026.

Outlook: Despite current global headwinds, Sydney’s hotel sector is well positioned for continued growth through 2026

• Sydney is anticipated to maintain robust room night demand and strong trading metrics, supported by diversified demand from international arrivals, domestic leisure and corporate travel, as well as a strong major events calendar, generating healthy forward bookings.
• Investor interest remains strong, underpinned by a positive trading outlook, a moderating supply pipeline and strong market fundamentals. Transaction volumes are set to rebound throughout 2026 as domestic and offshore capital seek exposure to the market.