Wollongong City Council will prepare a Planning Proposal aimed at incentivising hotel development across the entire Local Government Area to increase supply and ensure Wollongong offers a diverse range of accommodation options.
Since adopting its Tourism Accommodation Strategy (Strategy) in February last year, Council has implemented several measures to address the current shortage and boost the tourism sector to attract more people to Wollongong and provide opportunities to extend their stay.
Measures to incentivise hotel development in the CBD have included lowering the development contributions levy for hotel developers from 2 per cent to 1 per cent, and deferring payment from Construction Certificate Stage to Occupation Certificate stage.
In October 2025 Council resolved to prepare and exhibit a Planning Proposal to increase the permissible maximum height for the development known as the 'Globe Hotel' at the corner of Crown and Church Streets in the Wollongong CBD to enable greater capacity in the approved 5-star hotel and motel.
Council has also been granted a Gateway Determination from the NSW Government to exhibit a Planning Proposal for the Wollongong City Centre to give consideration of a 30 per cent bonus to building height and/or floor space for developments offering additional hotel rooms.
The Tourism Accommodation Planning Proposal is another action arising from the Strategy which recommended changes to the Wollongong Local Environmental Plan 2009 (LEP) to simplify planning controls to encourage additional hotel/motel development across the wider LGA.
Lord Mayor of Wollongong Councillor Tania Brown said the Planning Proposal was one of many measures being pursued as Council makes boosting the city's accommodation offering a top priority.
"We've worked really hard to position ourselves as major event destination and we're also advocating very strongly for a cruise terminal at Port Kembla," Cr Brown said.
"We need to make sure the accommodation options we offer keep pace with those efforts. We've spoken a lot about the measures we've taken to incentivise hotel development in the CBD, but we need to make sure it's something we are helping to facilitate across our entire LGA.
"There are several different mechanisms we look at, but what our planning controls allow and encourage is a major factor. In our discussions with existing and potential operators in the tourism sector, we've heard that planning provisions don't allow or encourage hotel or motel development.
"This proposal aims to address that and ensure planning measures serve their important purposes in preserving the character of Wollongong and its suburbs without restricting growth in a sector that offers so many potential benefits for our city.
"Wollongong offers something for everyone who comes to visit, and the accommodation available needs to do the same. We'll keep exploring every avenue we can to ensure that it is the case as we continue to grow."
Proposals include making hotel or motel accommodation a permissible land use in the R1 General Residential and R2 Low Density Residential zones in which many older motels are currently located and allowed to operate under existing rights provisions.
However, with hotel-motel operations not a permitted use of these sites under the LEP, development applications for additions and alterations, including the addition of more rooms, is problematic under current provisions.
Similarly, existing accommodation establishments established under old planning laws currently operate on land zoned E2 Environmental Conservation, or E3 Environmental Management, where the land use is no longer permitted.
Suggested amendments would either rezone certain sites to permit hotel or motel accommodation or make these operations an additional permitted use at specific sites. The inclusion of the land use would apply to existing hotels and motels, as well as proposals for new accommodation establishments.
It is also proposed to extend the up to 30 per cent floor space and building height bonuses for hotel development currently under consideration as part of the Wollongong City Centre Plan, to the rest of the LGA.
Following Council's endorsement on Monday night (20 April), the Tourism Accommodation Planning Proposal be referred to the NSW Department of Planning, Housing and Infrastructure for a Gateway Determination. Following the Gateway Determination, the Planning Proposal will be exhibited for a minimum period of 28 days.
