Sydney hotel stock to grow by 4.3%

Thanks to four hotels currently under construction in the CBD.

Despite no new openings in Q3, two hotels came online in Sydney early in Q4 with the opening of 25hours Sydney (109 rooms) and the Caption by Hyatt (174 rooms). According to a JLL report, there are four hotels still under construction in Sydney’s CBD, set to add 1,016 new rooms or 4.3% to existing stock.

“Despite strong trading performance across the hotel sector, elevated financing costs and high land prices created significant headwinds for new hotel developments, affecting both standalone and mixed-use projects,” the report added.

Here’s more from JLL:

Sydney’s hotel market sustained its strong momentum throughout the third quarter, boosted by major events such as the British and Irish Lions Tour, Sydney Marathon and NRL Grand Final. YTD occupancy continued to improve y-o-y, and ADR growth also picked up.

Year-to-date transaction volumes in Sydney totalled $375.5 million, with volumes remaining well below long-term averages. This was due to limited opportunities being offered in the market and did not reflect investor sentiment.

Outlook: Sydney hotels are poised for sustained growth in 2026

Demand is forecast to remain robust through the end of 2025 and into the new year, underpinned by a strong pipeline of major events and the ongoing recovery of international and corporate travel.

Given the positive trading outlook and strong market fundamentals, investor interest in Sydney will remain high. Transaction volumes in 2026 are therefore expected to be largely dictated by the availability of quality assets brought to market.