Australia’s hotel and pub sector remains one of the most active parts of the real estate market. Capital continues to flow, portfolios are being reshaped, and operator appetite for well-located venues remains strong. But underneath the transaction activity, the risk profile of owning and operating hospitality real estate is changing quickly.

Tax, rising costs, gaming, workforce, governance, and financial crime settings are all shifting at once — and Victoria’s recent changes provide a useful lens on the direction the rest of the country is heading.

A tougher operating environment for venues

Wage growth, energy costs, food and beverage input costs, insurance premiums, and interest expense have all reset venue P&Ls over the last three years. Margin pressure means small issues in cost control, procurement, roster management, or supplier arrangements now translate into materially larger financial impacts than they did pre-2022.

For owners running multi-venue portfolios, this is amplifying the importance of:

• consistent operating models across sites
• clear procurement and supplier controls
• disciplined capex and refurbishment governance
• accurate performance reporting at venue level
• accurate data for lender, investor, and Board reporting.

The venues that can demonstrate operational discipline are the ones commanding stronger valuations and better funding terms.

Gaming — the fastest-moving risk area

Gaming remains one of the most complex and rapidly evolving parts of the sector.

Victoria has been at the forefront of change, with mandatory carded play, load-up limits, spin rate changes, closure periods, and enhanced pre-commitment settings progressively coming into effect, together with heightened expectations around responsible gambling, staff training and record-keeping.

Other states are watching closely. NSW has been progressing cashless gaming trials and reform discussions; QLD, WA, and SA are each managing their own settings around harm minimisation, advertising, and venue obligations. The direction of travel is consistent even if the pace differs.

For hotel and pub owners, this creates a set of practical questions:

• Are gaming compliance controls documented, tested, and evidenced?
• Can we demonstrate to the regulator how staff are trained and supervised?
• Are cash-handling, reconciliation, and reporting controls robust?
• Do we have visibility across venues, or does compliance rely on individual managers?

Regulators are increasingly focused on whether venues can prove that their policies are working effectively in practice, rather than simply having them in place.

Tax — a compounding cost, not just a compliance issue

Tax is now a strategic consideration for hospitality real estate, shaping decisions well beyond the preparation and lodgement of returns.

Key pressure points include:

• Land tax — Victoria’s expanded settings, including the COVID debt levy and absentee owner surcharges, have materially reshaped hold economics for many venues. NSW, QLD, and WA each have their own settings, with land tax now a genuine driver of portfolio decisions
• Payroll tax — cross-border operators are increasingly navigating grouping rules, contractor provisions, and thresholds that vary meaningfully by state
• Windfall Gains Tax (VIC) — impacting rezoning-led development and repositioning strategies
• Duty and foreign purchaser surcharges — relevant for offshore capital and joint venture structures
• GST margin scheme and going concern — regularly under scrutiny in venue transactions
• Division 7A, trust distribution and Section 100A issues — relevant for many privately owned venue groups.

For owners looking at acquisitions, disposals, refurbishment, or repositioning, tax is now embedded in the deal thesis rather than a post-completion consideration.

Capital gains tax & restructuring considerations

The Federal Government’s proposed changes to the taxation of superannuation balances above $3m, together with ongoing scrutiny of trust, succession, and asset-holding structures, are prompting many hospitality business owners to reconsider how hotel and pub assets are owned.

For a sector where venue wealth is often held through family groups, trusts, self-managed superannuation funds, and long-term investment structures, any future changes affecting capital growth, intergenerational transfers, or exit strategies have the potential to influence acquisition, disposal, and restructuring decisions.

As venue values continue to appreciate across many markets, owners are increasingly seeking advice on capital gains tax exposure, succession planning, asset protection, and the tax implications of transferring hospitality real estate between ownership structures. This is becoming less about tax compliance and more about preserving long-term enterprise value and maintaining flexibility for future transactions and capital events.

Governance expectations are rising

Boards, lenders, and investors are asking harder questions of hospitality operators, particularly as portfolios institutionalise and private capital moves into the sector.

Areas increasingly under the spotlight:

• Risk frameworks and Board reporting — venue-level operating risks are expected to roll up into a coherent enterprise view
• Internal audit and assurance — larger groups are being asked to demonstrate independent assurance over gaming, cash, payroll, procurement, and safety controls
• Whistleblower and speak-up programs — expected across groups of any material scale, not just listed entities
• Workplace conduct — wage compliance, workplace safety, and cultural risk are now board-level topics
• Cyber and payment fraud — venues are attractive targets given the volume of daily transactions and third-party payments.

For groups eyeing capital raises, refinancing, or IPO pathways, governance maturity has become an important valuation input alongside its role in meeting compliance obligations.

AML/CTF is arriving in the real estate sector — from multiple directions

From 1 July 2026, AML/CTF obligations extended to real estate businesses, including property developers and agents. For the hospitality industry, AML/CTF now touches the sector at three levels:

1. Gaming operations — long-standing AUSTRAC obligations for gaming venues, with continued regulatory focus on cash movement, and suspicious matter reporting.
2. Property transactions — new obligations for property developers and real estate agents involved in the sale, purchase, or transfer of real estate.
3. Funds management structures — where venues sit inside managed funds, trusts, or investor syndicates, the AML/CTF governance expectations of the fund may be monitored through to the underlying operating environment.

AUSTRAC’s 2026 money laundering update also highlights the growing use of AI-enabled identity fraud, fake documentation, and impersonation, which is increasing risks and testing the control environment.

The critical question is no longer, “Do we have a policy?” It is: “Can we demonstrate that our AML/CTF controls actually work in the venue, in the transaction, and across the ownership structure?”

Capital flows are still there — but the bar is higher

Domestic and offshore capital continues to target Australian hospitality real estate, attracted by long-dated income, freehold-going-concern structures, and the perceived durability of well-located venues.

However, the diligence bar has risen. Buyers are asking sharper questions on:

• gaming compliance and revenue sustainability
• workforce and wage compliance
• tax structuring and land tax exposure
• AML/CTF and cash controls
• capex requirements and asset condition
• governance and reporting maturity.

Sellers who can front-foot these questions — with clean data, defensible controls, and clear governance — are the ones transacting at strong pricing. Those who can’t are seeing longer processes, more conditions, and greater price adjustment.

The Victorian lens

Victoria has moved earlier and further on several of these fronts — gaming reform, land tax, windfall gains, planning, and workforce settings. Whether or not other states follow the same pace, the pattern is consistent: more disclosure, more assurance, and more scrutiny.

For operators and owners, the practical implication is that the operating and governance discipline being asked of Victorian venues today is a reasonable proxy for what will be asked nationally in the next 12–24 months.

That’s the conversation on the table at the Hospitality Real Estate Summit, and the one Tim and Matthew will unpack in their fireside chat on 9 September.

How SW can help

SW’s tourism, hospitality, and gaming (THG) practice works with hotel and pub owners, operators, developers, and investors across the country, supported by specialist capability in internal audit and risk advisory, AML/CTF independent reviews, fraud and financial crime, audit, tax structuring, transactions, and corporate advisory.

If you’re grappling with any of the issues above — from gaming compliance uplift, to pre-transaction due diligence, to AML/CTF assurance, to internal audit and governance maturity — we’d welcome a conversation before or after the summit.

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