Geelong's Tourism Recovery Stalls as Operators Grapple With Rising Costs and Uncertain Travel Patterns

Geelong's tourism sector, which had begun to rebuild momentum in the past two years, is now confronting a sobering reality: recovery is far more fragile than many had hoped. As we head into the second half of 2026, operators across the waterfront precinct, CBD and beyond are wrestling with a perfect storm of economic headwinds that threatens to derail growth just when the city appeared to be turning a corner.

The numbers tell a cautionary tale. Hotel occupancy rates across Greater Geelong have plateaued at around 62 percent—up from pandemic lows but still tracking below pre-2020 benchmarks of 68 percent. Average room rates, which climbed sharply in 2024-25, have softened as operators compete for dwindling midweek bookings. Meanwhile, operational costs have become the elephant in the room nobody wants to discuss.

"Wages, utilities, insurance and supplier costs have all risen significantly," says one Bayside precinct hospitality manager, requesting anonymity due to commercial sensitivity. "Margins that were reasonable eighteen months ago have become wafer-thin."

International visitor arrivals to Geelong remain volatile. While backpackers and European holidaymakers have returned to attractions along the Bellarine Highway and foreshore, Asian visitor numbers—traditionally a cornerstone of the market—remain unpredictable due to geopolitical tensions and competing regional destinations offering aggressive discounts. Regional tourism data suggests visitors are staying shorter periods, spending less per capita than historical averages.

Staffing remains acute. Hospitality venues competing for workers face wage demands up 12-15 percent year-on-year, while skilled chefs and experienced managers are scarce. Several restaurants on Pakington Street and around the Geelong RSV precinct have reduced trading hours or temporarily closed kitchen services due to understaffing.

Attractions operators are equally squeezed. The National Wool Museum and other cultural institutions report flat or declining visitation relative to 2025, with domestic day-trippers increasingly opting for free activities. Budget constraints among regional visitors have become noticeably tighter.

Infrastructure investment has helped—the recent foreshore improvements and upgraded carparking have made Geelong more attractive to cruise ship passengers and coach tours—but these gains are offset by broader economic anxiety dampening leisure spending.

As mid-year stocktakes begin, the tourism industry is quietly preparing for a tougher 2026-27. Recovery, it appears, will be slower and more uneven than optimists predicted.

This article was compiled by AI from the sources linked above and screened before publishing. See our editorial standards.