Australia’s Sunshine Coast is in the spotlight as a prime destination for hotel development and investment, fuelled by a surge in visitor numbers and the upcoming Brisbane 2032 Olympic and Paralympic Games.
Recently released economic data shows the Sunshine Coast’s GRP soared to $26.33 billion for the year ending June 2024, marking a significant 31.5 per cent increase since 2020.
The region’s rapid economic growth, along with equally significant increases in visitation numbers, has outpaced existing accommodation supply, exposing a shortfall of rooms in internationally branded hotels.
Sunshine Coast Council research has highlighted demand for 2450 new hotel rooms before the Brisbane 2032 Olympic and Paralympic Games.
To stimulate upscale hotel development in targeted key areas, Sunshine Coast Council has introduced a Temporary Local Planning Instrument (TLPI 01/2025—Accommodation Hotel Incentive Measures).
Effective from April 4, 2025 to April 4, 2027, the Temporary Local Planning Instrument (TLPI) applies to land within the Sunshine Coast’s major centre and tourism zones and is designed to meet the growth of domestic and international visitors.
The first project approved through the Accommodation Hotel Incentives Package has already been approved, marking a milestone for the incentives program.
The new luxury hotel is set to be built in central Caloundra, featuring retail and dining at street level, guest amenities on the first floor, 160 hotel suites over eight levels and a rooftop space with restaurant, bar and event facilities.
The Brisbane 2032 Olympic and Paralympic Games will shine a global spotlight on the Sunshine Coast, which is set to host nine games events across the region.
An Athlete Village and cultural precinct is also set to be developed in a newly constructed area within the Maroochydore City Centre (artist impression, top).
Another anticipated development is The Wave, a state-of-the-art public transport solution planned to be ready for the Games. The Wave will create a direct rail connection from Beerwah on the southern end of the region to Birtinya on the coast and linking seamlessly through a metro hub in Maroochydore and on to the Sunshine Coast Airport.
Along with the Games’ momentum, the growth of high-value leisure and business travel markets is also stimulating demand for luxury hotel offerings.
These dual forces have coalesced to create an acute demand for new hotel rooms, making the Sunshine Coast an attractive location for internationally branded and boutique hotel investment.
For the year ending December 30, 2024, the Sunshine Coast attracted $4.27 billion in overnight visitor expenditure, an increase of 44 per cent since December 2019.
The region continues to record year-on-year visitation growth and has one of the highest average daily rates (ADRs) in Australia.
The Temporary Local Planning Instrument (TLPI) applies to the following Local Plan Areas and Zones as defined in the Sunshine Coast Planning Scheme 2014:
Maroochydore/Kuluin: Principal Centre Zone, Tourist Accommodation and Local Centre Zone (Cotton Tree)
Caloundra: Major Centre Zone.
Key provisions within the TLPI include as follows:
Increased building height allowances: An additional three metres for sites with existing hotel height limits or seven metres where no hotel height applies, plus an allowance for rooftop uses
Reduced requirements for on-site car parking, reflecting changing guest travel behaviour
Fast-tracked development approvals to accelerate project delivery.
A council-endorsed Strategic Policy also offers further incentives for eligible projects including as follows:
Discounted infrastructure charges
Reduced application fees.
Research commissioned by Sunshine Coast Council and undertaken by specialist consultancy firm THSA-Hotel Advisors reveals a significant shortfall in quality hotel accommodation across the region.
The analysis identified a need for 2150 new internationally branded and operated hotel rooms across nine properties and a further 300 boutique hotel rooms across six properties, to address existing gaps and meet projected demand leading up to the Brisbane 2032 Olympic and Paralympic Games.
The report highlights a growing need for more hotel rooms to support the visitor economy across leisure, business, MICE (meetings, incentives, conferences and exhibitions) health, education and VFR (visiting family and relatives) travellers.
Offering a perfect blend of outdoor adventure, natural beauty, cultural experiences and relaxation, the Sunshine Coast is a compelling destination for Australian and international travellers.
Last year, the region welcomed close to 10 million visitors, and the growth is forecast to continue over the next decade.
The Sunshine Coast is one of Australia’s top-five regional tourism destinations, with a visitor economy supported by $19.5 billion in region-shaping infrastructure projects and a $1.3 billion SEQ City Deal.
Major projects include an upgraded Sunshine Coast Airport, now home to a world-class international runway and the Sunshine Coast International Broadband Network, the fastest east coast connection from Australia to Asia.
Reasons to invest in hotel development on the Sunshine Coast:
Council-delivered incentive scheme for hotel development
Co-Host City for the Brisbane 2032 Olympic and Paralympic Games
Strong occupancy performance
Some of the highest ADRs in the country
Demand exceeding supply
Diverse sources of demand
Strengthening demand from business travellers
Long-term investment in region-shaping projects
Third most loved destination on the planet (2023)
Within a two hour reach of a 4 million+ population
With the TLPI in effect until April 2027, a unique window of opportunity exists on the Sunshine Coast for hotel developers to capitalise on strong forecast demand coupled with supportive government policies.
To find out more about hotel development opportunities, download the Sunshine Coast Investment Prospectus: Hotel Edition.
The Urban Developer is proud to partner with Sunshine Coast Council to deliver this article to you. In doing so, we can continue to publish our daily news, information, insights and opinion to you, our valued readers.
