Melbourne Hotel Occupancy Falls Behind Other Australian Capitals

Melbourne is renowned for major events, dining, sport and culture, but new figures have raised questions about whether the city is attracting enough visitors throughout the entire year.

The Victorian Liberal Party has highlighted data from Accommodation Australia's Hotel Occupancy Report Card showing Melbourne recorded an average hotel occupancy rate of 74.6% during 2025, placing it behind Sydney, Brisbane, Adelaide, Perth and Hobart for the second consecutive year.

The Opposition says the figures demonstrate a need for greater focus on attracting visitors to Melbourne outside the city's major event periods.

For Melbourne's tourism and accommodation industry, the figures highlight an interesting contrast. The city can generate extraordinary accommodation demand during major events, yet there remains an opportunity to attract more leisure and business travellers throughout the rest of the year.

Melbourne Hotel Occupancy at 74.6% in 2025

According to figures highlighted by the Victorian Liberal Party, Melbourne's average hotel occupancy rate was 74.6% across 2025.

Shadow Minister for Tourism and Major Events David Southwick said Melbourne's occupancy remained behind other Australian state capitals and argued Victoria needs a stronger year-round strategy for attracting visitors.

The figures are particularly interesting when compared with Melbourne's performance during its major international events.

Melbourne can effectively transform into a near-capacity accommodation market when major events come to town.

The challenge is maintaining stronger Melbourne accommodation demand throughout the quieter parts of the year.

Major Events Continue to Fill Melbourne Accommodation

There is little doubt about Melbourne's ability to attract visitors for major events.

The Formula 1 Australian Grand Prix, Australian Open, AFL Grand Final, international sporting events, concerts and exhibitions can generate enormous spikes in demand for accommodation in Melbourne.

The 2026 Formula 1 Australian Grand Prix provided another example.

Melbourne CBD hotel occupancy averaged 92.3% across the first three days of the event, reaching a record 95.6% on the Saturday.

This demonstrates just how quickly Melbourne accommodation can fill when major events attract interstate and international visitors.

For travellers planning to visit Melbourne during these periods, booking accommodation well in advance can be important.

The Bigger Opportunity Is Year-Round Melbourne Travel

While major events are extremely valuable, Melbourne's tourism and accommodation industry operates 365 days a year.

This is where the debate around the city's annual hotel occupancy becomes more relevant.

A successful visitor economy cannot rely solely on a handful of major weekends.

Melbourne has significant potential to attract visitors throughout the year for food and dining, shopping, theatre, sporting events, exhibitions, conferences, corporate travel and extended stays.

Business travel is particularly important because it can generate accommodation demand outside traditional holiday periods.

Companies regularly bring employees into Melbourne for projects, training, conferences and temporary assignments, while interstate and international employees continue to relocate to the city for work.

Corporate Travel Supports Longer Melbourne Stays

Corporate travellers also behave differently from many leisure visitors.

Someone visiting Melbourne for a weekend might stay two or three nights. An employee relocating to Melbourne or working on a project could require accommodation for several weeks or several months.

This creates an important market for long stay accommodation in Melbourne.

Corporate Keys specialises in fully furnished apartments for corporate travellers, relocations and extended stays, particularly for stays of 28 nights or longer.

Longer stays can help provide accommodation demand outside major event periods and contribute to a more consistent year-round visitor economy.

Hotels Aren't the Only Melbourne Accommodation Option

Hotel occupancy is an important measure of tourism activity, but Melbourne's accommodation market extends beyond traditional hotels.

Visitors can choose from hotels, serviced apartments, short-stay properties and fully furnished apartments in Melbourne.

The right option often depends on the purpose and length of the trip.

Hotels can be ideal for shorter visits. For someone spending several weeks or months in Melbourne, having a full kitchen, laundry, separate living areas and additional space can become considerably more important.

Corporate accommodation provides another option for these travellers.

With utilities, internet and furniture already arranged, guests can arrive in Melbourne and immediately settle into an apartment without establishing a traditional residential tenancy.

Melbourne Remains a Major Australian Destination

The annual occupancy figures shouldn't be interpreted as suggesting Melbourne has lost its ability to attract visitors.

Victoria's accommodation sector recorded 16.6 million occupied room nights in 2024-25, an increase of 4.1% year-on-year, while accommodation revenue reached $3.6 billion.

Melbourne's major events continue to demonstrate extraordinary drawing power.

The opportunity is to convert more of that appeal into year-round Melbourne travel.

Encouraging people to stay longer, attracting more business travellers and promoting Melbourne outside peak event periods could all contribute to stronger and more consistent accommodation demand.

Finding Accommodation in Melbourne

For travellers, Melbourne's competitive accommodation market also means there is significant choice.

Visitors staying for a weekend have hundreds of hotel options, while those requiring accommodation for several weeks or months can consider serviced and furnished apartments.

Corporate Keys has specialised in corporate accommodation in Melbourne for more than 20 years, providing fully furnished apartments for business travellers, employee relocations and extended stays.

For companies bringing employees to Melbourne, furnished corporate apartments provide an alternative to both hotels and traditional residential leases, combining the space of an apartment with the convenience of having furniture, utilities and internet already arranged.

Whether visiting for business, relocating to Melbourne or staying for an extended project, Melbourne continues to offer one of Australia's broadest selections of accommodation.

The challenge for the city's tourism industry is ensuring more travellers choose to experience it throughout the entire year, not just when the biggest events are in town.