In late 2026, Sydney’s second airport is set to open in the area known as Badgerys Creek, 27 miles west of the Sydney Central Business District.
The new Western Sydney International Airport (WSI) aims to boost the economy of the growing Western Sydney region and meet its forecast of doubling aviation demands in the next 20 years.
The government of New South Wales said Sydney room nights and travel spend have reached record highs and underlined Sydney’s position as Australia’s No. 1 visitor economy.
New freeways, railways and shopping centers are being planned to service the new 24-hour, curfew-free airport, but hotel projects are notably absent, according to sources.
The only hotel project announced for the new Aerotropolis district adjacent to the terminal was the 200-room Courtyard by Marriott Western Sydney Airport.
The official government plan for Aerotropolis is that it will comprise 10 precincts.
The hotel deal for it was signed in 2022 but has since been shelved, fueling industry concern that hotel investment to service the airport is seriously lagging.
Market assessment
Scott Boyes, CEO of hotel management company Trilogy Hotels, said no significant airport-adjacent hotel developments in Western Sydney are planned, except a 150-room hotel in a nearby business park.
He added there is a notable discrepancy between demand for the district and hotel rooms.
The new airport expects an initial 5 million passengers per year, reaching 10 million by 2031.
“The region is inadequately serviced, with only 8,764 hotel rooms across 113 properties,” Boyes said.
Matthew Burke, regional director, Asia Pacific, at STR, CoStar’s hotel analytics division, agreed. The Western Sydney catchment has a population of around 2.7 million with 8,800 rooms. Perth, with a population of 2.3 million, has 164,000 rooms.
"Therefore, one could argue it is under-serviced. … Diversification is required, with weekday occupancy currently averaging 71% compared to weekends of 78.6%,” he said.
STR data shows that Sydney’s CBD has approximately 26,000 rooms, and there are approximately 5,000 rooms at Sydney’s first international airport, Sydney Kingsford Smith Airport.
"There is only one planned hotel around the [Aerotropolis] precinct, so the metrics of the airport need to be developed further to give investor confidence,” Burke added.
He said a government development plan for Aerotropolis was released in 2024, but no details since then have emerged over exact plans for its “10-level hotel precinct” and conference center.
Trilogy’s Boyes said Western Sydney should be a huge opportunity for hoteliers.
“But there’s an absence of master planning of demand drivers and hotel product. There’s a need to identify what we have and what we need in terms of tourism infrastructure,” he added.
Adrian Williams, chief operating officer, Pacific at French hotel firm Accor, said it is a matter of “wait and see.”
He said the WSI airport is “one of the most significant growth opportunities for Australia’s tourism and hospitality sector in decades,” adding he expects there will be a lag between the airport opening and hotels being built to meet demand.
Early proposals have not gone anywhere, he said. The emphasis is on “future hotel development.”
“The opportunity is clear, but complexities remain,” Williams said. “Large-scale projects such as airport precincts involve multi-agency planning, zoning approvals and infrastructure delivery, all of which take time.
“We believe that developers are waiting to get a clearer picture of passenger flows and commercial demand before committing, [and] then we expect the market to respond quickly,” he said.
Boyes said many hoteliers agree there has been insufficient long-term planning to make Western Sydney — Australia’s third-largest economy after Sydney CBD and Melbourne — “a compelling destination.”
“There’s a need to fill the gaps, build hotels around it to develop a precinct supported by the airport,” he added.
Poised to benefit
Currently, the closest hotel to the future airport is the 28-room Wallacia Hotel, 8 miles to the west. The next nearest is the 192-room Mercure Sydney Liverpool, in Liverpool, 12 miles to the east. Another cluster of international brands is in Penrith, the same distance away but to the north.
The NSW Government is aware of the hotel shortfall and has called for interest for major hotel-investment projects that it plans to fast-track under its new Investment Delivery Authority plan.
Boyes said this initiative is a good start.
“We need to make the planning process easier for hotel developers. Building a hotel is tough because of development costs, a lack of available land and increasing operating costs. State and local governments could incentivize these projects through prescribed land uses and development enhancements,” he said.
Western Sydney’s biggest regional hub, Parramatta, 25 miles east of the new airport and 25 miles northwest of the first airport, is pivoting itself on further airport-driven growth.
Richard Crawford, vice president of hotel development, Australia, New Zealand and Pacific at Marriott International, describes Parramatta as “Sydney’s rapidly evolving second CBD … with strong demand drivers across commerce, technology, education and the arts.”
“Parramatta is a strategic location for Marriott’s expansion,” he said, noting the May 2025 signing of the 279-room Sydney Marriott Hotel Parramatta.
It is due to open in 2027 as part of a large, mixed-use development.
Matt Tripolone, managing director, Australasia and Pacific at IHG Hotels & Resorts, said the decision to open the 217-room Crowne Plaza Parramatta, also in a mixed-use development scheduled to open in 2029, came about largely on the upcoming opening of the new airport and the transformation of Western Sydney.
“Western Sydney is one of Australia’s most dynamic growth corridors, underpinned by record levels of infrastructure investment and a flourishing business and government sector,” he said.
Boyes’ Trilogy has seven hotels under management in Western Sydney. In September, it closed a deal with Serene Capital to manage the Mercure Penrith in rugby league team Penrith Panthers’ entertainment and sporting precinct.
Serene’s CEO and co-founder Glen Boultwood said the hotel was positioning “in anticipation of the opening of WSI.”
Boyes’ colleague, Trilogy chief operating officer Grant Alchin, said apart from the need to have more hotel beds, he feels more needs to be done to build the hospitality workforce to service the new airport.
“The government talks of thousands of new jobs being created, but we currently lack the skilled people to fill them,” he said.
Accor’s strong footprint in Western Sydney reached 21 hotels with the opening in November 2025 of the 140-room Novotel Sydney Cabramatta.
Williams said “the region’s growth trajectory is undeniable” but closer collaboration is needed between government, developers, tourism bodies and operators to meet the scale of demand expected.
Once developers are sure of demand, he said, “we expect the market will respond quickly.”
But that won’t be until after the airport opens, he added.