Thinking of Buying an Accommodation Business in Australia? Here Are 3 Vital Questions to Ask

The Australian accommodation industry, covering caravan parks, holiday houses, hostels, camping grounds and B&Bs, generated $5.5 billion in revenue in 2025, employing over 19,200 people across 10,675 enterprises. Average profit margins sit at 4.9%.

Revenue grew at 3.3% annually over the past five years, supported by post-pandemic recovery and “revenge travel” spending. Growth is forecast to continue at 1.6% annually through 2030, reaching $6.0 billion. Demand is underpinned by domestic tourism and government initiatives, though cost-of-living pressures, competition from Airbnb, and potential student accommodation caps present risks.

1. Is the Business Financially Sustainable Amid Seasonal and Economic Pressures?

Why It Matters

Accommodation providers rely heavily on discretionary spending, which is sensitive to economic downturns. Rising purchase and rent costs have squeezed margins, while seasonal demand fluctuations affect occupancy rates. Businesses with strong cash flow management and diversified income streams are more resilient.

What to Check

• Profitability – Benchmark against the industry’s 4.9% margin.
  
  

• Revenue stability – Review reliance on peak holiday seasons versus year-round demand.
  
  

• Cost base – Assess rent, wages, and purchase costs relative to revenue.
  
  

• Cash flow resilience – Confirm how the business manages downturns in occupancy.
  
  

2. Does the Business Have Strong Market Positioning and Client Appeal?

Why It Matters

The sector is highly competitive, with more than 33,000 establishments nationwide. Airbnb and short-term rental platforms have intensified competition, while hotels attract higher-spending international visitors. Success depends on location, brand reputation, and ability to offer unique or budget-friendly experiences.

What to Check

• Location strength – Confirm presence in high-demand areas such as coastal towns or tourist routes.
  
  

• Customer demographics – Review reliance on families, retirees, backpackers, or international students.
  
  

• Reputation – Assess online reviews, repeat guest loyalty, and partnerships with travel agents.
  
  

• Differentiation – Evaluate whether offerings include eco-friendly, family-oriented, or premium services.
  
  

3. Is the Business Positioned for Future Trends and Policy Changes?

Why It Matters

Environmental awareness, government regulation, and technology adoption are shaping the future of accommodation. Caravan parks and eco-accommodation are expected to grow as travellers seek sustainable and affordable options. Short-term rental taxes and potential international student caps will also affect demand.

What to Check

• Policy exposure – Review reliance on international students or Airbnb-style competitors.
  
  

• Sustainability – Assess eco-friendly initiatives and appeal to environmentally conscious travellers.
  
  

• Technology adoption – Confirm online booking systems, digital marketing, and loyalty programs.
  
  

• Growth potential – Consider ability to expand facilities or diversify into glamping or wellness accommodation.
  
  

Ready to Invest in a Thriving Accommodation Business?

With steady demand from domestic tourism and diversification opportunities in eco and lifestyle travel, accommodation businesses remain resilient investments.

Success will depend on strong financial management, competitive positioning, and readiness to adapt to changing consumer preferences and policy landscapes.

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