Accommodation Australia's latest Hotel Occupancy Report Card shows Melbourne's average occupancy rate was 74.6 per cent across 2025, behind Sydney, Brisbane, Adelaide, Perth and Hobart for the second year in a row.
The results point to a broader challenge for Victoria's visitor economy, with Melbourne's once strong reputation for hospitality losing ground as other states invest heavily in tourism, events and business travel.
Following a decade of financial mismanagement under Labor, Victoria's net debt is growing by $1.7 million an hour as the Allan Labor Government cut more than $30 million of grant funding to Visit Victoria in 2024-25.
Shadow Minister for Tourism and Major Events, David Southwick, said: "This new report confirms Melbourne's hotel occupancy remains behind other state capitals under Labor.
"Whilst other states are backing tourism, supporting small business and working hard to attract visitors, Victoria remains behind.
"Major events like the Australian Open show what Victoria can achieve, but a strong visitor economy depends on a year-round attraction strategy that keeps people coming in every season.
"Labor's mismanagement of economy and tourism sector means fewer visitors, fewer local jobs and less economic opportunity for Victorians.
"Labor cannot manage money, cannot manage our tourism sector and Victorians are paying the price."
