Thinking of Buying a Lodge Business in Australia? Here Are 3 Vital Questions to Ask
The Australian bed and breakfast accommodation industry, which includes lodges, is valued at $89 million in 2025, employing approximately 1,217 people across 785 establishments.
After years of pandemic-related disruption, the industry is gradually recovering, with annual growth projected at 1.5% through 2030, reaching $96 million in revenue.
The rise of short-term rental platforms like Airbnb has intensified competition, pushing operators to differentiate through hospitality, amenities, and personalised experiences. As domestic tourism stabilises and inbound travel rebounds, lodges located in regional and nature-based destinations are expected to benefit most from the returning tourism market.
1. Is the Business Financially Sustainable and Profitable?
Why It Matters:
Operating a lodge involves balancing hospitality, property management, and cost efficiency. Profitability depends heavily on occupancy rates, seasonal demand, and competition from short-term rentals.
What to Check:
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Revenue and margins – The average profit margin is around 6.7%, reflecting modest returns compared to other accommodation sectors.
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Cost structure – Wages account for $24 million across the sector, or roughly 27% of total revenue, while utilities and maintenance costs are rising due to energy price increases.
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Occupancy and room rates – Assess seasonal booking patterns and rate competitiveness within local tourism markets. Lodges with unique offerings—eco-tourism, wellness, or culinary experiences—command higher rates.
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Diversified income – Review whether the lodge offers add-on services such as tours, dining, or event hosting, which can contribute up to 15% of revenue for diversified operators.
2. How Competitive Is the Business’s Market Position?
Why It Matters:
Competition is intense due to the growth of Airbnb and budget motels, particularly in urban and coastal areas. Successful lodges differentiate through location, charm, and guest experience.
What to Check:
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Market concentration – The sector is highly fragmented, with no major national operators; most lodges are family-run or owner-occupied businesses.
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Regional demand – New South Wales, Victoria, and Queensland host over 80% of all establishments, driven by proximity to beaches, wine regions, and natural parks.
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Online presence – Visibility on aggregator sites like Booking.com and Stayz is essential, but comes with commission costs that reduce margins.
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Customer reputation – Lodges depend heavily on online reviews; consistent five-star feedback directly influences occupancy and pricing power.
3. Is the Business Aligned with Tourism and Lifestyle Trends?
Why It Matters:
The tourism market is shifting toward authentic, nature-based, and experience-driven stays. Lodges that align with these trends can capture emerging demand from both domestic and international travellers.
What to Check:
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Domestic travel trends – Domestic tourists account for 69% of industry revenue, while international travellers contribute around 17%, with recovery accelerating since 2023.
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Eco and wellness focus – Demand for sustainable accommodation and off-grid experiences is growing, particularly among older demographics with higher disposable income.
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Technology adoption – Lodges offering seamless online booking, digital check-ins, and virtual tours are outperforming competitors.
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Partnership opportunities – Collaboration with tour operators and regional visitor centres increases visibility and steady bookings.
Ready to Invest in a Thriving Lodge Business?
With Australia’s tourism industry stabilising and renewed interest in regional escapes, the lodge sector offers attractive potential for buyers seeking lifestyle investment and steady returns.
Success depends on quality service, local partnerships, and adapting to shifting traveller preferences focused on sustainability and authentic experience.
For Buyers:
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For Sellers:
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