Savills Australian Hotel Transaction Review 2025

2026 OUTLOOK Overall, transaction volumes are expected to increase in 2026 but remain broadly in line with the long-term averages. Investor sentiment toward hotel, tourism, and leisure assets has improved steadily throughout 2025 and is expected to strengthen further over the next 12 months. A survey undertaken by the Property Council of Australia (Hotel Capital Growth index) in December 2025 found that Queensland is viewed as the leading destination for hotel capital growth over the next year, followed by South Australia and New South Wales. Despite the increase in the cash rate by 25 basis points in February 2026, investor confidence is expected to continue the momentum from the second half of 2025 and is anticipated to carry through in the year ahead. Currently, investors remain selective in their acquisitions, with longer due diligence periods as buyers focus on maximising risk-adjusted returns. We expect trading income growth to be the primary driver of total returns in 2026, supported by CBD trading strength and measured supply growth across several capitals. Given the current environment in the year ahead, we expect to see more structured transactions such as vendor finance, delayed settlements, and earn-outs, particularly in relations to underperforming asset sales. I SAVILLS AUSTRALIAN HOTEL TRANSACTION REVIEW 38