Thinking of Buying a Holiday Accommodation Business in Australia? Here Are 3 Vital Questions to Ask
The Australian holiday accommodation industry is valued at $4.16 billion in 2024, with an expected annual growth rate of 1.1% through 2029.
While competition from Airbnb and short-term rentals has intensified, the sector remains resilient due to increasing domestic travel, eco-tourism demand, and premium lodging experiences.
Industry-wide profit margins average 7.2%, with occupancy rates at 67.3%, varying significantly by region and property type.
Prospective buyers must assess financial stability, market positioning, and guest experience strategies before investing.
1. Is the Business Financially Stable and Profitable?
Why It Matters
Holiday accommodation businesses generate revenue through room bookings, event hosting, and premium services, but profitability depends on seasonal demand, operating costs, and pricing strategy.
Properties that offer high-margin services such as dining, guided experiences, or wellness retreats tend to achieve greater financial stability.
What to Check
- Revenue trends & profit margins – Review financial statements from the last three to five years to assess profitability.
- Occupancy rates & seasonal demand – Compare with industry benchmarks (67.3% average) to determine revenue consistency.
- Cost structure & labour expenses – Labour accounts for 26.9% of industry revenue, impacting overall margins.
- Revenue diversification opportunities – Evaluate income sources beyond accommodation, such as on-site dining, event hosting, or activity packages.
2. How Competitive is the Business’s Market Position?
Why It Matters
The holiday accommodation sector is highly competitive, with Airbnb holding 29.2% of bookings and short-term rental platforms increasing price transparency.
Businesses that offer unique experiences, strong branding, and high guest satisfaction tend to outperform competitors.
What to Check
- Location & market demand – Assess proximity to national parks, beaches, or high-traffic tourist areas.
- Booking channels & marketing strategy – Review direct bookings vs. reliance on third-party platforms like Booking.com or Expedia.
- Guest experience & reputation – Analyse online ratings, as 84% of travellers consider reviews before booking.
- Competitive differentiation – Identify whether the business offers glamping, eco-lodges, vineyard stays, or other unique accommodations.
3. Is the Business Aligned with Industry Trends and Future Growth?
Why It Matters
Travellers are increasingly seeking eco-friendly stays, long-term rentals, and digitally connected experiences.
Businesses that adapt to these preferences while leveraging technology and operational efficiency will have a long-term competitive advantage.
What to Check
- Sustainability & eco-tourism integration – Determine whether the business qualifies for government incentives for solar power, energy-efficient infrastructure, or low-impact tourism.
- Technology & automation – Assess investment in self-check-in, digital concierge services, and dynamic pricing models.
- Regulatory & compliance considerations – Review zoning laws, short-stay rental restrictions, and licensing requirements.
- Expansion & premium market opportunities – Identify potential to scale through corporate retreats, wellness tourism, or extended stay packages.
Ready to Invest in a Thriving Holiday Accommodation Business?
With growing domestic tourism, sustainability trends, and evolving guest expectations, the Australian holiday accommodation industry presents a strong investment opportunity.
However, financial viability, market positioning, and adaptability to industry shifts are key to long-term success.
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