Thinking of Buying a Motel Business in Australia? Here Are 3 Vital Questions to Ask

The Australian motel industry is valued at $3.8 billion in 2024, with an expected annual growth rate of 2.8% through 2029-30.

Demand remains strong due to rising domestic tourism, budget-conscious travel trends, and regulatory changes limiting short-term rentals.

With an industry-wide profit margin of 11.2% and average occupancy rates at 67.3%, motels continue to offer stable returns, particularly in regional areas.

However, buyers must evaluate financial sustainability, market competition, and operational efficiency before making an investment.

1. Is the Business Financially Stable and Profitable?

Why It Matters

Motel businesses generate revenue through room rentals, long-term stays, and additional services such as dining and corporate packages.

While industry-wide profit margins stand at 11.2%, profitability varies based on location, cost structure, and seasonal demand.

What to Check

• Revenue trends & profit margins – Review financial records from the last three to five years to assess revenue stability.
  
  
• Occupancy rates & seasonal demand – Compare against industry benchmarks (67.3% average) and identify peak and off-peak trends.
  
  
• Operating costs & labour efficiency – Labour accounts for 26.9% of industry revenue, making cost control critical.
  
  
• Diversified revenue opportunities – Assess additional income sources, such as on-site dining, long-term leases, or corporate travel packages.

2. How Competitive is the Business’s Market Position?

Why It Matters

The motel sector is facing competition from hotels, serviced apartments, and Airbnb.

Motels with strong location advantages, efficient cost structures, and well-defined target markets tend to achieve higher occupancy rates and stable revenue.

What to Check

• Location & market demand – Evaluate proximity to highways, national parks, or business districts, which drive consistent occupancy.
  
  
• Independent vs. franchise model – Determine whether the business benefits from brand affiliation and centralised marketing.
  
  
• Guest experience & reputation – Analyse customer reviews and satisfaction scores, as they directly impact future bookings.
  
  
• Competitive differentiation – Identify whether the business offers pet-friendly stays, business-friendly amenities, or eco-tourism experiences.

3. Is the Business Aligned with Industry Trends and Future Growth?

Why It Matters

Motels are adapting to shifts in travel preferences, including increased demand for long-term stays, digital booking efficiency, and sustainability initiatives.

Businesses that invest in automation, alternative revenue streams, and customer-focused experiences will have a long-term competitive edge.

What to Check

• Technology & automation – Assess investment in online booking systems, automated check-ins, and dynamic pricing models.
  
  
• Regulatory & compliance considerations – Review compliance with zoning laws, food service licensing, and tenancy regulations.
  
  
• Long-term stay & alternative revenue potential – Determine if the business attracts semi-permanent residents or offers corporate packages.
  
  
• Expansion & service improvement opportunities – Identify potential upgrades in facilities, guest experience, or eco-friendly initiatives.

Ready to Invest in a Thriving Motel Business?

With steady demand, cost-efficient operations, and opportunities for revenue diversification, the Australian motel industry presents a solid investment opportunity.

However, financial viability, market positioning, and operational adaptability are key to long-term success.

For Buyers:

Create an account to set up alerts here.

For Sellers:

Sell Your Business here.