Published 28 September 2026. Figures and market conditions described here were current at that time and may have changed since.
Luxury hotels across Australia and New Zealand are significantly outperforming the wider accommodation sector, driven by strong demand, expanding rate premiums and a limited development pipeline.
According to CBRE's Luxury Hotel Market report, demand across major Australian and New Zealand markets has grown at a 2.9 per cent compound annual growth rate since 2019, more than double the broader hotel market's 1.3 per cent growth rate.
The luxury segment has maintained stable occupancy levels of 78 to 79 per cent despite new supply entering the market.
Since 2020, 20 hotels comprising 3,517 rooms have opened across Australia and New Zealand, with luxury properties representing approximately 33 per cent of all rooms delivered in Australia during this period.
Transaction prices have surged dramatically, with the median price per key increasing by 81 per cent from around $396,000 in 2011-2014 to $718,000 in 2023-2026 year to date. This growth is attracting new global brands and supporting expansion through conversions, repositioning, branded residences and independent operating models.
Since 2021, approximately $3.2 billion in luxury hotel assets have transacted across Australia and New Zealand, with CBRE advising on approximately $1.75 billion, representing 55 per cent of total transaction value.
CBRE's Head of Hotels, Capital Markets, Pacific, Michael Simpson said international capital has been a crucial driver of investment activity.
"These transactions have established new benchmarks for absolute price, price per key and yield, attracting both domestic and international capital," Mr Simpson said.
"Outcomes have been achieved across different market conditions, from transactions executed during pandemic lockdowns to major sales completed as investment activity recovered."
He said that Chinese and Hong Kong investment were particularly active between 2012 and 2018, whilst Singaporean and Malaysian capital has remained steady with a more diversified buyer pool emerging in recent years.
"This depth of offshore interest has supported liquidity and helped establish new pricing benchmarks alongside active domestic capital," Mr Simpson said.
CBRE's Director, Hotel Research, Ally Gibson said luxury hotel performance is supporting the strong pricing outcomes.
"Since 2019, luxury ADR increased across every market analysed and premiums over the all-scales sector are widening considerably," Ms Gibson said.
"In Australia, the average luxury ADR premium over the all-scales sector increased by 53 per cent, from $62 in 2019 to $94 in 2026."
Looking ahead, 11 luxury hotels comprising approximately 1,979 rooms are currently under construction, with most delivery expected in 2026 and 2027. However, beyond the current development cycle, the confirmed pipeline thins materially as feasibility constraints limit new projects.
"Strengthening demand and limited new supply should support the performance and value of established luxury assets, particularly in markets with high barriers to entry," Ms Gibson said.
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