Hotels are dotted throughout Canberra and its suburbs. Do we need more? Photo: File.
The skyline in Canberra is shifting. Crystalbrook Aurora, a 225-room luxury hotel, is already under construction in Canberra’s CBD and due to open in early 2027. The Crowne Plaza hotel is also set for transformation with plans revealed for two new IHG properties (an InterContinental and a Hotel Indigo) adding 530 rooms.
For a city with fewer than 8000 hotel rooms today, that’s a significant jump.
It’s exciting on paper. But before we celebrate the cranes and renderings, we need to ask: do we really need more hotels in Canberra?
According to Tourism Research Australia, Canberra welcomed 2.2 million domestic overnight visitors and 214,000 international visitors in 2024. Together, they accounted for more than 11 million visitor nights.
At first glance, that sounds like a strong case for more accommodation. But look at where those nights are being spent, and the picture shifts.
A report from STR, Australia’s leader in accommodation statistics, shows Canberra accounts for 7792 hotel rooms, amounting to about 2.84 million available room-nights each year. Yet, this past financial year, only 1.96 million of those were actually sold, leaving nearly 900,000 hotel rooms empty in 2024.
Overall hotel occupancy sat at 68.9 per cent, well below the 77.7 per cent recorded before COVID. At the same time, the average room rate fell by 4.9 per cent, leading to a drop in revenue per available room by 7.3 per cent.
In an economy where costs for staffing, utilities and maintenance are rising sharply, that means Canberra hotels are not only selling fewer rooms, they’re selling them for less.
At the same time, more visitors are choosing to stay outside traditional hotels. Canberra has about 2100 active short-term rentals through platforms such as Airbnb and Stayz. These properties are well used, averaging about 260 nights a year at close to three-quarters full.
Add to that caravan parks, camping grounds, Defence accommodation, student housing, and the many people who stay with friends or family, and it becomes clear why hotel rooms aren’t filling at the rate the top-line visitor numbers might suggest.
It’s also worth noting demand in Canberra is highly seasonal. Hotels run close to full during Parliament sitting weeks, Floriade, or major conferences, but occupancy softens dramatically outside those peaks. Building extra capacity to meet short bursts of demand risks leaving the city oversupplied for much of the year.
For hoteliers, that means good years are carried by a handful of busy weeks, while the rest of the calendar becomes harder to sustain.
This matters because each new property dilutes the market further, driving occupancy and rates down. For operators, that makes meeting budget targets nearly impossible. Revenue pressure forces cuts: less reinvestment in facilities, leaner staffing rosters, and service shortcuts that guests notice.
What begins as an oversupply problem quickly becomes a quality problem.
And then there’s the question of labour. More hotels don’t just mean more rooms; they mean more staff. In an industry already struggling with skills shortages, new hotels entering the market often end up competing for the same limited pool of experienced workers.
And yet, there is a case for new builds.
Canberra’s accommodation stock is patchy: a handful of modern hotels surrounded by a large base that feels tired and out of step with visitor expectations. Bringing in new brands such as Crystalbrook, InterContinental and Hotel Indigo will help raise the city’s profile, especially for higher-yield travellers and conferences.
These properties don’t just add rooms; they add restaurants and bars, conference spaces, and a level of polish that can attract visitors who might otherwise look to Sydney or Melbourne.
In that sense, carefully targeted new supply could act as a catalyst, setting higher benchmarks and pushing the broader market to follow.
But Canberra doesn’t just need more investment in new bricks and mortar; it needs current operators to reinvest in their properties, update their product, and bring them into line with what today’s travellers expect.
So, does Canberra really need more hotels? Well, yes… but strategically. The city will benefit from fresh, world-class properties that raise its profile and attract new segments of travellers. However, this must be paired with investment in workforce capability and support for existing operators to upgrade their offer.
Otherwise, we risk building a glittering skyline that hides a struggling industry beneath.
The challenge (and opportunity) is to grow Canberra’s capacity while also raising its quality, ensuring the city’s accommodation story is not just bigger, but better.
Bernardo Mateus has more than 15 years in the hospitality industry and teaches courses on hospitality leadership, event management and guest service management at the Canberra Institute of Technology.
