International arrivals continue to grow, as tourism and visitation momentum accelerates

• Latest figures from Sydney Airport report total passenger traffic for YTD Q3 2025 sat at 31.1 million passengers. This was a 2.4% increase on the prior year, driven largely by a strong recovery in international passenger numbers, which increased 5.0% on YTD Q3 2024.
• This international recovery was also highlighted in the latest Tourism Research Australia statistics (YE Sep 25), with Sydney recording 3.7 million overseas visitors (+8.1% YoY), staying 86.4 million nights (+5.6%) and with expenditure of $12.8 billion (+19.4%).

Two new hotels opened in Q4 2025, as the supply cycle moderates

• Two hotels opened during the final quarter, adding 283 new rooms to the market or 1.1% on existing stock. This saw the introduction of two new brands into the Australian market, with the 25hours Sydney and the Caption by Hyatt Central Sydney.
• There are five hotels currently under construction in Sydney’s CBD, set to add 1,151 new rooms or 4.8% to existing stock over the next two years.

All market segments across Sydney demonstrated strong trading performance to close out the year

• Sydney’s hotel market sustained its strong momentum throughout the final quarter, boosted by major events such as the NRL Grand Final, Lady Gaga and Jimmy Barnes concerts, Sculpture by the Sea, SXSW, the Sydney Open and the New Year’s Eve fireworks. Occupancy continued to improve, nearing 2019 levels.
• Despite strong trading performance and significant investor appetite, a scarcity of market opportunities kept year-to-date transaction volumes at $382.6 million, a figure well below Sydney’s typical long-term averages.

Outlook: Sydney’s hotel sector is well positioned for sustained growth in 2026

• A strong calendar of major events, combined with the rebound in corporate and international travel, is anticipated to maintain robust room night demand into the new year.
• Sydney’s positive trading outlook, moderating supply pipeline and strong market fundamentals are also expected to continue to drive strong investor interest. Transaction volumes are set to rebound in 2026. However, this will be driven by the availability of quality assets.