A new study on Perth hotels has highlighted investment opportunities as it forecasts growth in visitor demand outpacing the development pipeline.
Commissioned by the state government through Tourism WA, the Perth Hotel Demand report released yesterday analysed accommodation around the city, Burswood and Perth Airport.
Demand for rooms is expected to grow at a compound annual average growth rate of 2.4 per cent between 2024 and 2030, rising from 3.55 million rooms and nights occupied in 2025 to 3.99 million in 2030.
Supply growth, however, is predicted to remain moderate, with a compound average annual increase of 1.6 per cent between 2024 and 2030, up from 4.27 million in 2025 to 4.77 million.
Around 1,371 hotel rooms are expected to be added to supply in the area between 2025 and 2030, and around 1,719 rooms for 2030 to 2035, according to the data by Horwath HTL.
This totalled 3,090 additional rooms in the next decade.
Compared to the hotel development spike from 2015 to 2020 when more than 3,300 rooms added to the area, the report suggested the market is set for more sustainable growth, with space for new projects if demand growth accelerates.
“The Perth centre hotel market has transitioned from a decade of rapid expansion to a period of measured and stabilised supply growth,” the report read.
Using Perth Airport’s passenger number forecast to set a scene of higher demand, the study predicted the area could have the capacity to accommodate up to around 5,500 rooms between 2025 and 2035 with occupancy remaining around 80 per cent.
Total room revenue for hotels in the area was expected to increase from $835.8 million in 2025 to surpass $1 billion in 2030.
"The Perth Hotel Demand Study reinforces Perth's growing appeal as a visitor destination and provides a clear picture of accommodation demand for the decade ahead, including opportunities for a diverse range of new hotel options that meet the needs of leisure and business travellers alike,” Tourism Minister Reece Whitby said.
The report identified investment opportunities in lifestyle and boutique hotels, more affordable accommodation options, refurbishments of existing assets, the proposed Perth Convention and Exhibition Centre hotel, the revitalisation of East Perth and regional tourism accommodation.
“The findings point to a market now entering a consolidation phase, where future growth will depend less on new construction and more on refurbishment, repositioning, and product differentiation,” the study read.
Tourism Council WA chief executive Evan Hall told Business News the state should learn from the shortfall in rooms in the 2010 which took years to improve.
“It's critical that we plan and build increased hotel rooms in Perth to cater for increased travel, for leisure, for business and for a growing business sector here in Perth and Western Australia,” he said.
“It really did stop the growth of tourism in hampered business and business transactions, our business events market, even things like bring in project managers and export experts and workers for short term accommodation.
“And we did see almost ridiculous demand, occupancy levels and prices due to the lack of investment.”
Mr Hall said the release of state land and the strengthening of planning policies would assist in moving the hotel development pipeline forwards.
The anticipated growth will rely on improving the state’s attractiveness to visitors, AHA WA chief executive Bradley Woods said.
“The outlook for Perth’s hotels is positive, but growth will depend on the city continuing to attract visitors year-round,” he said.
“Strong midweek demand alone is not enough to maximise the sector’s potential.
“The report reinforces the importance of major events, aviation growth, tourism infrastructure and vibrant precincts that encourage people to stay longer.”
