Western Sydney’s hotel market is positioned for performance-led growth, supported by an increasing population, growing major events infrastructure and the delivery of major transport projects. However, despite green shoots in Parramatta where at least seven new hotels are on the way, hotel supply remains constrained, a new CBRE and Business Western Sydney research report shows.
The Western Sydney Hotel Market Report, built on comprehensive modelling by CBRE, shows demand for hotel accommodation is broadening across corporate, aviation and leisure segments, while supply remains well below the region’s long-term requirements, even when accounting for proposed and approved projects.
With Western Sydney International Airport opening within months supported by the new M12, a transformation is underway in how people work, visit and enjoy the region.
This opens a window of opportunity for capital aligned with Western Sydney’s long-term trajectory as an integrated metropolitan economy set to welcome an additional one million residents over the next 20 years.
CBRE’s Head of Hotels Research Ally Gibson notes Western Sydney is approaching a step change in its accommodation needs with around 11,500 additional rooms required as the region develops.
“Western Sydney is entering a new phase of growth, underpinned by major infrastructure development, including Western Sydney International Airport, the expansion of the Sydney Metro network and the opening of the M12 Motorway. These investments signal a structural shift in accessibility, employment and long‑term visitation to the region, supporting sustained growth in underlying hotel demand,” Ms Gibson said.
“Despite the improving demand profile, new hotel supply across Western Sydney remains relatively modest. Ongoing development feasibility challenges continue to moderate new delivery, creating favourable conditions for operators and investors positioned early in the cycle,” Ms Gibson added.
Executive Director of Business Western Sydney David Borger said: “We’re seeing a fundamental shift across Western Sydney. New infrastructure is changing travel patterns and bringing more people into the region for business, conferencing, events and leisure.
“Hotels are central to that story. They’re not just accommodation – they’re where deals are done, conferences are hosted, visitors connect and hospitality spills into surrounding streets.
“Western Sydney is ready, Parramatta’s leading the boom, but supply needs to keep pace with this growth. We’re keen to bring government, planners, and the hotels and tourism sector together to seize the opportunity.”
The report shows Western Sydney’s hotel market is experiencing sustained rate growth and stable occupancy levels, supported by infrastructure investment and diversified demand.
In 2025, hotel occupancy sat at 75% while the Average Daily Rate (ADR) reached $218, resulting in Revenue Per Available Room (RevPAR) of $163.
RevPAR increased 7% over the 2025 year, broadly in line with Australia’s major gateway markets and only marginally below Sydney CBD. Sustained pricing growth alongside stable occupancy reflects strengthening demand within a measured supply environment.
Major events are a key driver of hotel performance. Western Sydney is emerging as a genuine event‑led accommodation corridor, anchored by Accor Stadium and CommBank Stadium, and strengthened by a growing pipeline of cultural, leisure and transport infrastructure.
Hotel performance in Western Sydney during major events consistently outperforms the wider Sydney market, driven by proximity to venues and limited local supply.
For example, the report found hotel occupancy exceeded 95% during events like the NRL Grand Final and Taylor Swift concerts, while rate growth was materially above the Sydney average, translating into record RevPAR outcomes during peak periods.
Looking ahead, improved connectivity will further reinforce Western Sydney’s role as a high‑yield accommodation hub, with visitors able to stay locally for events while reduced travel time will provide better access to the wider Sydney market.
This will help position the region as both a tourism and major events destination in its own right, while connected to the global metropolis of Sydney.
