Hotel shortage threatens to blunt Western Sydney Airport's economic windfall
A critical shortage of hotel rooms near Western Sydney International Airport (WSI) could stop the region cashing in on the economic boost the new terminal is set to bring, with industry leaders warning travellers may be forced to stay elsewhere in the city instead.
WSI opens to passenger flights on October 25, with cargo services beginning today. But with just a handful of hotels within a 20-kilometre radius, accommodation supply is lagging well behind forecast passenger numbers.
Adam Leto, chief executive of Western Sydney Leadership Dialogue, told the ABC the region urgently needed more beds. "We have got thousands of visitors landing on our doorstep starting from the end of this year that are going to be looking to stay, play and spend time in Western Sydney. And we want to be able to keep them here, not have them move across the city for accommodation."
New hotels were in the pipeline near WSI and in Parramatta, Leto said, but the shortfall was already being felt. "There is no denying we have a hotel crisis at the moment," he said. Among the projects yet to firm up is a planned 200-room Courtyard by Marriott near the airport, whose spokesperson said "there is not an opening timeline to share at this stage."
Lauren Raffen, owner and licensee of the 29-room Wallacia Hotel, 14 kilometres from the new terminal, said the area lacked capacity for the coming numbers. "There's not too much around for the travellers coming in. I don't know how we're going to keep them out here because there is not enough [hotels]," she said. With limited public transport, the hotel is adding its own transfer service: "We are putting a courtesy bus in place to make it convenient for travellers to and from the airport."
Leto said hotels in nearby Liverpool, Penrith and Rooty Hill were also tipped to pick up flow-on demand.
Leto pointed to elevated build costs as a key handbrake on new hotel development. "The cost of construction across the city, particularly Western Sydney, is challenging at the moment," he said, adding that market caution was compounding the delay. "But as soon as the planes start touching down and we start to see the numbers rolling in, I am expecting that will spur a bit more confidence."
A WSI spokesperson said private investment was expected to follow.
The airport was built to handle 10 million passengers a year and eventually more than 80 million by the 2060s.
Leto said the surrounding Aerotropolis precinct would take time to mature. "It is going to take some time, like the broader picture around the Aerotropolis. You know Rome wasn't built in one day."
Jonathan Jackson, 27th July 2026
