Could a popular holiday destination make a good property investment? Not necessarily. But understanding tourism trends can help investors ask better questions before making a decision.

 

Tourism plays an important role in Australia's economy, supporting local businesses, jobs and demand for accommodation. For property investors, these trends can provide useful insight into how a location is changing and what that might mean for rental demand.

 

According to Tourism Research Australia, visitor spending across Australia's visitor economy had an increase of 6.5% in 2025 compared with 2024. However, strong tourism activity at a national level does not automatically translate into better returns for every property or location.

 

The opportunity lies in understanding how visitor demand interacts with the local property market, the type of accommodation being offered and the costs involved.

 

Tourism demand and rental opportunities

Tourism can influence demand for different types of accommodation, from holiday homes and short-stay apartments to longer-term rentals for people working in tourism-related industries.

However, these markets do not always move together.

 

A coastal town might experience a surge in holiday bookings during school holidays, while demand for long-term rentals remains relatively stable. In another location, new tourism infrastructure or employment opportunities might attract workers who need somewhere to live throughout the year.

 

For investors, the important question is not simply whether a location attracts visitors. It is whether that activity creates sustainable demand for the type of accommodation they intend to provide.

Seasonality also matters. A property that attracts strong bookings during peak holiday periods may experience quieter months, leaving the owner to manage ongoing expenses even when income falls.

Understanding the local market over a full year can provide a more realistic picture than relying on peak-season demand alone.

 

Where might tourism create opportunities?

Coastal destinations, regional centres and areas with established attractions can be worth investigating when assessing property markets. Locations such as the Gold Coast, Cairns and parts of regional Queensland attract visitors for different reasons, but each market has its own characteristics.

 

Tourism may also influence demand in areas connected to major events, transport improvements, new attractions or expanding employment opportunities.

 

These developments can be useful indicators to investigate, but they are not guarantees of future rental growth or capital appreciation.

 

Before drawing conclusions, investors should consider:

• The local rental market: Is there consistent demand from long-term tenants, or is the market more dependent on short-stay visitors?
• Supply and competition: How many similar properties are available, and are new accommodation developments entering the market?
• Purchase price: Does the property's price make sense when compared with its realistic income potential and ongoing costs?
• Seasonality: How much does demand change throughout the year?
• Local employment and infrastructure: Is the area supported by a broader economy, or is it heavily dependent on tourism?
• Future changes: Could new developments, transport links or local planning decisions influence demand or property use?

Looking at these factors together can help investors distinguish between a location that is popular with visitors and one that may suit their investment objectives.

 

Short-stay accommodation or a long-term tenancy?

One of the most important decisions is how the property will be rented.

 

Short-stay accommodation may offer the potential for higher nightly rates during busy periods.

 

However, income can fluctuate, and owners need to account for vacancies, cleaning, utilities, furnishing, maintenance, platform fees and the time or cost involved in managing frequent guest turnover.

 

Long-term residential tenancies generally offer a different arrangement, with rent paid under a residential tenancy agreement and fewer guest changeovers. Income is not guaranteed, however, and owners still need to consider vacancy periods, maintenance, tenant demand and their ongoing obligations.

 

Neither approach is automatically better. The suitability of each depends on the property, its location, the owner's circumstances and the costs and responsibilities involved.

 

It is also important to check the rules before planning to use a property for short-stay accommodation. Local planning requirements, council rules, body corporate by-laws and other applicable regulations may affect what is permitted. Requirements can differ between locations and should be checked before committing to a strategy.

 

How can investors research tourism-related opportunities?

Tourism data can be a useful starting point, but it should be considered alongside local property information.

 

Investors can begin by examining visitor numbers, overnight stays and visitor spending through Tourism Research Australia. For Queensland locations, Tourism and Events Queensland also provides regional tourism information.

 

This information can help identify changes in visitor activity and areas worth investigating further.

The next step is to compare those trends with local rental demand, available properties, realistic rental estimates, purchase prices and ongoing expenses. Speaking with local property professionals can also help provide a clearer picture of the long-term rental market.

 

Most importantly, investors should assess the numbers for the individual property rather than assuming that the performance of a broader tourism market will be reflected in their own investment.

 

The takeaway: Look beyond the holiday appeal

Tourism can influence accommodation demand and create opportunities in some property markets. But visitor numbers alone cannot tell you whether a particular property will perform well.

 

The stronger approach is to look beyond the destination's popularity and understand the local market, the intended rental strategy, the costs involved and the regulations that apply.

 

A popular holiday destination might be worth investigating, but a sound property decision requires more than an attractive location and a busy tourist season.

 

At Proximity Property Management, I believe understanding the wider picture matters when caring for an investment property. Whether you already own an investment or are considering becoming a landlord, understanding the local rental market and how your property fits into it is an important part of making informed decisions.

 

This article provides general information only and does not constitute financial, legal or investment advice. Property investors should obtain independent professional advice relevant to their circumstances and verify applicable local requirements before making decisions.