Australia’s high-end hotel industry is thriving, with luxury accommodation often priced above $3000 a night outperforming other segments as the nation’s wealthiest direct their spending towards experiences. This trend is reshaping the tourism industry, with hotel developers targeting high-paying guests, though it may also affect the affordability and accessibility of domestic travel.
New luxury hotel supply is rising more quickly than any other part of the accommodation market across the country. Since 2018, top-tier hotel rooms have grown by 22%, driven by increased demand from wealthy Australians and international visitors with money to spend. The shift reflects a global move by affluent consumers who are choosing to invest in leisure and lifestyle experiences instead of luxury goods, especially as high-profile events and natural attractions inspire year-round travel.
Investors are responding actively to this demand. Between 2019 and 2024, developers launched a series of five-star hotels, with global brands expanding into cities such as Sydney, Melbourne and Adelaide. One major hotel group opened its first Australian Ritz-Carlton in Melbourne last year, offering suites at prices reaching around $15,000 per night. At the same time, boutique operators are delivering distinct experiences like the $3000-a-night Sequoia Lodge set above the Piccadilly Valley.
Australia’s wealthiest 200 individuals have increased their combined fortunes by more than 57% in just five years, positioning the luxury tourism sector for continued expansion. Major events like F1 races and headline concerts are attracting both local and international travellers ready to pay for exclusive experiences. Brands such as InterContinental and Waldorf Astoria are committing to the Australian market by opening new hotels, rebranding existing properties and unveiling premium offerings tailored to evolving luxury standards.
The sector's momentum signals a solid post-pandemic recovery for tourism operators and investors, but it may also indicate growing inequality in travel options. With more luxury hotel developments in the pipeline, mid-range accommodation could face pressure, potentially limiting options for broader audiences. If the current pace continues, luxury could become the defining feature of Australia’s hotel market rather than remaining a niche offering.
