Whenever hospitality within the Asia-Pacific is discussed, the players moving on the board are invariably major tourism hubs like Thailand and Vietnam in Southeast Asia, then Japan, Hong Kong, and South Korea to the East.

But the Land Down Under could give these giants a run for their money: the Antipodean nation is rapidly rising as a location of interest for hospitality investors.

To go by a report published by CBRE Asia-Pacific back in April, transaction volumes across the Australian hospitality industry set a new record at the end of 2025: US$2.7 billion, to be exact.

The report also showed that 78 percent of total transaction activity was done by offshore investors, the total up by 27 percent from 2024.

The CBRE report adds that these investors are mostly from China, Singapore, Taiwan, Thailand, and the United States.

What’s driving the surge?

As stated, offshore capital is fuelling the infusion of investments into Australian hospitality.

The country’s reputation as an economic safe haven, mostly supported by transparent regulations, has also boosted its profile as a prime hub for investment.

According to a July 2025 report from the Property Council of Australia stated that the country’s overall political and economic stability, market transparency, strong tourism sector, and availability of freehold title have all factored into its surging appeal to investors.

Jones Lang Lasalle (JLL) managing director and head of investment sales for hotels in Australasia Peter Harper remarked: “After a period of reduced international activity, we’re seeing foreign investors now pivoting back to Australia for its economic resilience, transparency, perceived attractive value and positive outlook.”

As a result, experts say that Australia has now overtaken markets like Hong Kong with regard to regional hotel transaction volumes and is now second only to Japan.

Evolving market dynamics

Moving forward, it is important to keep the following points in mind with regard to hospitality investment in Australia:

• Concentration in urban centres The bulk of sectoral investment activity is mostly focused on the country’s major cities Brisbane, Melbourne, and Sydney where RevPar and ADR are seeing major year-over-year gains;
• Beyond traditional hospitality Today’s investors are setting their sights on what’s referred to as flex living, essentially a hybrid housing model where people rent fully-furnished spaces for the short or medium term. They are also keen on mixed-use accommodations for those on the lookout for more affordable and community-immersive stays; and
• More flexible terms for luxury hospitality While the luxe scene in Japan and other tourist=heavy areas go for long hotel management agreements, often running to decades, Australia offers more flexible terms as long as 15 years for easier asset sales.