04 Jun 2026
Words
Sarah Petty Australian Financial Review
Motel boom attracts young couple escaping corporate rat race
Eight months ago, Aleks Stevanovic and Steve Penna uprooted their lives in Melbourne, leaving the rat race to live near the banks of the Murray River, where they are running a regional motel. They are part of a quiet boom in Australia’s motel sector, where revenue is rising and transaction prices have followed suit.
As Stevanovic recalls, while on maternity leave from her marketing role a year ago, the pair passed a caravan park and decided to investigate the costs of operating such a business.
“My husband and I have had absolutely not a single thing in the world to do with ever owning a business or even, really, a remote interest initially in the motel game,” she told The Australian Financial Review.
“The interest in it as a general concept comes from now having two little kids [and] being more available to them. You see how quickly a year goes and your baby, your tiny little potato, is now running around and they just want to hang out.
“So [it was] a little bit of that, I’ll say mum guilt, but a little bit of also the corporate rat race stuff wasn’t really worth it.”
After conducting online research, the couple discovered leasing a caravan park or motel business would be more affordable than buying a property and its business.
They came across that opportunity when the Sunrise Motel in Barooga, a town on the border of Victoria and NSW, became available for lease.
“It was going for like a fraction of what a freehold would cost,” Stevanovic said. “It’s not like a full-on, all-in-one commitment. It is just enough of a sampler to try something out, see how it goes, if it works, if we like it, if we hate it – it’s not a big deal.
“Running Sunrise Motel was a leap of faith that has given us the freedom to build something of our own, without starting from scratch.”
After renting out their house in Melbourne’s west, the pair and their two boys, who are under two years old, have joined the expanding motel industry.
The sector is estimated to be worth $16.4 billion, up from $15 billion a year ago, with more than 3500 properties across Australia, according to the latest ResortBrokers motel report.
A motel is defined as a low-rise building, typically a walk-up with one or two floors, where guest rooms have direct access to an adjacent parking area. They feature fewer than 50 guest rooms and limited amenities.
The motel sector operates under different models. In some cases, the motel is run as a freehold going concern, where the operator owns the real estate as well.
In other situations, the property is owned by a passive investor and the business is operated separately under a leasehold arrangement.
Leasehold businesses, like the one Stevanovic and Penna run, account for the vast majority of motel operations nationwide. Leasehold arrangements are often set up to run over a 30-year term.
Pricing in the leasehold market has recorded stronger growth in the 12 months to March, with the median price per key – the price per room when a motel leasehold is sold – rising 28.7 per cent. Prices for freehold going concerns have increased by 13.1 per cent over the same period, according to ResortBrokers analysis.
For all operators, the median net profit per key, or the median net profit generated per room, also rose by 23.3 per cent. The median yield compressed well below 30 per cent for the first time, reflecting strong buyer demand.
ResortBrokers’ property economist Josh Mangleson said one of the factors driving the sector’s growth was that more entrants were seeing a personal benefit in running a motel, which effectively includes free living arrangements when living on site.
“Operating a business full-time, a lot more things become a part of your business, and therefore are expenses in operating the business,” he said. “People are realising it because it’s been brought about by people in difficult cost-of-living positions, searching for value.”
Average daily rates across capital city, coastal and regional motels have risen 59.3 per cent, 32.8 per cent, and 23.2 per cent, respectively, in the past five years.
Mangleson said the fact that Australians held holidaying in such high regard had benefited the domestic accommodation industry over the last few years, despite cost-of-living challenges.
“Australians are holidayers at heart,” he said. “They’re inclined to substitute a product for another in what we’ll call a substitutionary effect in economic terms, which basically means trying to have the same utility in this case, having a holiday at a lower cost.
“That might mean staying in a lower quality by star rating accommodation, or it might mean something slightly closer to home.”
Back in Barooga, Stevanovic said she loved her new life after taking over the leasehold of the nine-room Sunrise Motel.
“I do three days, and then Steve does three days, and then we just kind of flip and switch over the weekend,” she said. “We can pop out to the bakery, pop out to the shops, have a chat to the people here, leave a room open, let them check themselves in, and you have that flexibility.
“It’s a slower regional life, but it’s one that is more intentional and balanced, where we can be part of our children’s lives and don’t have to live to fit everything into the weekend.” END
