Savills Australian Hotel Transaction Review 2025

HOTEL TRANSACTION KEY TRENDS TRANSACTION VOLUME REMAINS NEAR LONG-TERM AVERAGE Hotel transaction activity stabilised near long-term norms in 2025 despite macro uncertainty. Total hotel transaction volume reached $1.91 billion in 2025, a 2.3% year-on-year increase and broadly in line with the long- term annual average, reflecting a market recovery in the second half of the year despite ongoing geopolitical uncertainty and longer transaction timelines. The positive transaction momentum displayed in the second half of 2025 is expected to continue to build into 2026 despite monetary tightening. INVESTOR SEEKING INPLACE CASHFLOW AND VALUE-ADD OPPORTUNITY Hotel investor focus continues to be on existing, value-add assets that provide a demonstrable trading track record amid constrained development. Elevated construction costs have limited new supply, driving investor preference toward existing hotels offering refurbishment, repositioning, or conversion potential, including BTR, co-living, and PBSA, supported by persistent housing undersupply. STRONG INCREASE IN NUMBER OF MID-MARKET DEALS In 2025, deal size composition skewed toward small- to mid-market assets up to $30 million in value. Average deal size declined slightly compared to the previous year, while price per key remained relatively stable at approximately $379,500, albeit below 2022 and 2023 levels. Whilst there were numerous larger assets offered to the market, only 6 transacted nationally above $80 million in value with bid-ask spread remaining a contributing factor. Please note: For the purposes of the above analysis Savills counts transactions at unconditional exchange not settlement and only the sales over AU$5 million. I SAVILLS AUSTRALIAN HOTEL TRANSACTION REVIEW 4