Confidence returns to Australia’s hotels as pressures build

Australia’s accommodation sector is entering the peak summer travel season with renewed confidence – but structural challenges around staffing and technology adoption remain unresolved.

The third edition of the Australian Accommodation Barometer, released by Booking.com in partnership with Statista, draws on insights from travel executives across hotels, tourism operators and alternative accommodation providers nationwide.

Despite ongoing geopolitical and macro-economic uncertainty, 75 per cent of Australian accommodation operators report a positive business outlook for the coming season, a marked improvement from the sector’s low point of 61 per cent in 2022.

Confidence varies by state, with Victoria recording the strongest sentiment around business development over the past six months.

That optimism is translating into investment. Nearly half of all respondents plan to increase investment in the months ahead, while a further 35 per cent intend to maintain current levels.

Larger chain hotels are leading the charge, while small and mid-sized operators and lower-rated properties are taking a more cautious approach.

One of the clearest growth drivers identified in the report is event-led tourism, which is increasingly helping operators smooth out the peaks and troughs of traditional seasonality.

Among accommodation providers that have felt the impact of events, almost half reported an increase in international or long-haul guests, while 46 per cent saw stronger booking volumes during typically quieter periods.

Financial benefits were also evident, with higher revenue per room and longer stays reported across parts of the sector.

To capitalise on this shift, many operators are embedding events into their broader strategies.

More than a third already host events to attract group and non-leisure travellers, while partnerships with wedding planners and event organisers are proving particularly effective.

Looking ahead, over half of respondents plan to actively collaborate with event organisers, and many are seeking closer alignment with local governments and destination marketing bodies.

Yet behind the positive headline figures, staffing remains a persistent pressure point.

On average, Australian hotels expect to hire more than seven employees over the next year, but filling senior and specialised roles continues to be difficult.

High salary expectations, long or irregular working hours and skills shortages were all cited as key barriers, alongside the cost and complexity of training less experienced staff.

Technology adoption presents a similar fault line.

While most operators recognise the potential of digital tools and artificial intelligence, particularly in marketing, customer service and cybersecurity, uptake remains uneven.

High implementation costs, integration challenges and a lack of technical expertise are slowing progress, particularly for smaller properties, raising concerns about a widening digital divide across the sector.

“While the sustained optimism among Australian accommodation providers is genuinely encouraging, our findings highlight clear and urgent challenges,”  Todd Lacey, Regional Manager for Oceania at Booking.com, said.

“The skills shortage remains a major bottleneck, and the high cost and complexity of digital technology risks creating a digital divide where smaller businesses are left behind.

“However, the industry is not standing still; proactive strategies like embracing collaborative approaches to event tourism are showing real success in tackling seasonality, with accommodations seeing a crucial rise in bookings during typically low-demand periods.”

As Australia is in the midst of a busy summer, the barometer suggests an industry buoyed by demand and opportunity, but increasingly defined by a split between those able to invest and adapt, and those struggling to keep pace.