04 Jun 2026
Words The Hotel Conversation

Motels Surge in Popularity — ResortBrokers

Demand for motels is surging across Australia among both buyers and travellers, according to Motel Report 2026, the second annual snapshot of the national motel industry by RB Research, the research arm of national accommodation property agency ResortBrokers.

Among buyers, demand for motels has significantly outstripped supply, with competition intensifying as multiple parties pursue acquisition opportunities, according to the report, which covers the financial year to March 2026.

Across the country, all motel ownership models — freehold going concerns, freehold passive investments and leaseholds — have delivered strong performance.

Nationally, leaseholds recorded the strongest growth, with median price per key rising 28.7% and median net profit per key increasing 23.3%. The median yield also compressed significantly to well below 30% for the first time, reflecting strong buyer demand. By comparison, freehold going concern motels recorded more moderate growth with median price per key up 13.1% and median net profit per key increasing 14.6%, which still represented exceptional growth.

“A couple of factors are driving buyer demand, particularly in the leasehold space,” the report’s chief analyst, Property Economist Josh Mangleson who heads RB Research, told The Hotel Conversation.

“Firstly, the motel sector continues to deliver strong returns across the board, underpinned by solid performance. Nationally, motel average daily rates (ADR) and occupancy levels across capital city, coastal and regional markets have all improved. Both coastal and regional ADRs have now surpassed the previous historic highs recorded in FY23.”

“Capital city markets recorded particularly strong ADR growth, rising 5.4% over the period. The capitals also experienced the strongest occupancy growth since FY25, followed by regional and coastal markets. Regional occupancy continues to set new records, reaching an all-time high of 65.6% in the latest period, while coastal markets are approaching their historic peaks. Capital city markets are also rebounding strongly, now closing in on the occupancy levels of around 80% last seen a decade ago.”

“Another key factor is the benefit of owning both a business and a home. Motels typically come with an owner’s residence, whether they’re operated as a leasehold or freehold going concern. The combination of acquiring both a business and a place to live has found new appeal with buyers amid the current high cost-of-living environment. This has been particularly evident in the leasehold market, where the lower entry price compared with freehold going concerns has made ownership more accessible to everyday buyers.”

Another noticeable trend this year has been the renewed strength of coastal markets, which have led the motel sector for buyer demand.

“While regional and inland markets experienced strong demand in previous years due to their relative affordability, coastal assets have once again established a pricing premium as competition for these locations has intensified,” Mr Mangleson told The Hotel Conversation.

Motel Report 2026 introduces a new demographic section examining the types of guests staying in motels across Australia.

“A number of quirky differences between the states emerged with this data,” said Mr Mangleson.

“In New South Wales, regional and coastal motel stays were dominated by the 60+ age group, while the 30–44 age bracket was strongest in Sydney.”

“In Queensland, coastal regions dominated total visitor nights, with nearly one in two guests staying for a holiday. By contrast, Victoria’s regions were more popular than the coast for visitor nights.”

“The fundamentals for the motel sector are extremely strong despite high cost of living,” ResortBrokers’ Managing Director Trudy Crooks, who co-authored the report with Mr Mangleson, told The Hotel Conversation.

“Underpinning the industry is Australians’ great love of holidays. Even amid cost-of-living pressures, people still prioritise travel. They simply adjust how they do it. In challenging economic times, we typically see a substitutionary effect, with Australians opting for shorter stays, more affordable destinations and lower-cost accommodation options. But they continue to travel with the motel sector being a major beneficiary. As this year’s report found, most guests across the country staying in motel-style accommodation travelled for holiday purposes, at over 40% across each location.”

Another major finding of Motel Report 2026 is industry consolidation driven by funds and corporate groups.

“ResortBrokers has long said the motel sector is primed for consolidation,” Ms Crooks told The Hotel Conversation.

“While the hotel sector has attracted significant institutional investment over the past decade, the motel sector has remained comparatively fragmented. That’s now beginning to change, with funds and corporates increasingly seeking to acquire multiple assets across the country.”

“At the same time, there’s been a notable rise in private operators looking to build small-scale portfolios. Owners who historically operated a single motel are now actively pursuing expansion strategies involving three, four, five or more properties.”

“These buyers are increasingly recognising the operational and financial benefits that come with scale, including greater efficiencies, stronger purchasing power and the ability to leverage centralised management structures across a broader network.” END

Photo: Motel Report 2026 authors, Josh Mangleson and Trudy Crooks