ECEC Strategy · Industry News & Shifts
The only lever left: why occupancy decides everything for your centre in 2026
You know the numbers on your own centre better than any report does. How many places you're funded for, how many are filled this week, and the gap between those two numbers that keeps you up at night. What's changed in 2026 isn't the maths. It's that almost every other way of protecting your margin has quietly closed off, and the one that's left is the one most centres treat as optional.
The sector's own data explains why, and it changes how your time and money are best spent this year.
What the ACCC actually found
When the ACCC finished its childcare inquiry, the finding that should matter most to you got very little airtime. The regulator looked across the whole sector and concluded there were no excess profits anywhere. Margins are thin, and they're thin everywhere. This wasn't an industry quietly overcharging. It was one running close to the line.
The same report named the thing that decides which side of that line you land on. In its words, "the occupancy level of a childcare service is a key driver of revenues and profits." Not your daily fee. Not clever cost control. Occupancy. The inquiry also put a figure on why cost-cutting can't save you: labour is more than 69% of what it costs to run a centre. When roughly seven dollars in ten go to wages, and you can't and shouldn't cut the educators who make your service worth choosing, there isn't much fat left to trim.
So the regulator's own analysis lands on a single point. You can't shrink your way to a healthy margin. You have to fill the rooms.
The squeeze from both sides
Look at what's happened to the two levers a business normally pulls, price and cost, and you'll see why occupancy is carrying the whole load now.
On the cost side, award wages rose around 5% in March 2026, with further rises landing through the year. Wage rises of around 15% are flowing through over two years. That's the right thing for a workforce that's been underpaid for a long time, and it's also a real number hitting your payroll every fortnight.
On the price side, the door is closing. Centres taking the Worker Retention Payment face limits on how much they can lift fees, so fee growth for many centres is capped while the biggest cost keeps climbing. If you can't raise prices to cover rising wages, and you can't cut the wages themselves, the only variable left that lifts revenue is how many of your funded places are actually paying. Costs up, prices held, and one honest way out.
Supply keeps coming
What turns a squeeze into an urgent one is supply. New centres are still being built, and they're being built far faster than demand is growing.
CBRE's March 2026 Early Education report puts it plainly: roughly 30,000 new places are being built a year, against roughly 11,000 places of demand growth. That's close to three times as much supply as the market can absorb. Every one of those new rooms opens hungry for the same families you're trying to enrol.
At the same time, demand in your patch isn't guaranteed to grow at all. Children in centre-based day care actually fell 2.8% in the year to March 2026, and national occupancy sits at about 74.3% (Federal Education Department Child Care Subsidy data report, March quarter 2026). That's the average centre running with roughly a quarter of its places empty, which is the difference between a comfortable year and a stressful one.
What this means: occupancy is the lever
Put those three facts side by side and the picture is clear. Wages are climbing, fees are capped, and more competition arrives every month while demand softens. Cost control is largely spoken for. Price is largely off the table. The one number you can still move, the one the ACCC named as the driver of profit, is occupancy.
It's worth saying the sector as a whole isn't shrinking. Government funding reached $20.9 billion in 2024-25, up 10.6% in real terms (Productivity Commission Report on Government Services 2026). There's more money flowing into early education than ever. But that money follows children, and children follow the centre their family chooses. With supply outpacing demand, the sector can grow while your centre goes backwards. You win by winning families now, not by riding a rising tide. The question is whose rooms they walk into.
This reframes what enrolment work is. It isn't discretionary marketing you get to when things are quiet. When occupancy is the only lever left, the ability to fill rooms is core infrastructure, the same way your roster or your compliance system is. Think of it as occupancy insurance: a steady capability that protects the margin every other force is pushing against. A centre that can reliably fill its places has bought itself room to pay educators well and hold its nerve when a new competitor opens down the road. Our guide on why occupancy decides your centre's health goes deeper.
What filling rooms actually takes
Filling rooms comes down to two things working together, and most centres have a gap in one of them.
The first is a story families trust. Parents choose a centre with their heart and justify it with their head. They can read your rating and your fees online in seconds, so those rarely decide it. What decides it is whether they can picture their child known, safe and happy in your rooms, and whether your people feel like their people. That's what honest video and real parent stories do that a price list can't. They let a family feel the place before they book a tour, and they let the parent who couldn't make the visit share the decision. Our guide on filling childcare vacancies covers where the story usually breaks down.
The second is a system that catches every enquiry. A trusted story brings families to your door, and then a slow reply or a dropped follow-up loses them to the centre that answered first. Every enquiry that goes cold is a place left empty. The centres that hold high occupancy are the ones where no enquiry falls through, where a first message turns into a tour and a tour turns into an enrolment on purpose, not by luck.
Story without a system leaks the families it attracts. A system without a story has nothing worth passing on. You need both.
A practical first step
If occupancy is the lever, the first move is to see clearly where yours is being lost. That doesn't take a big project or a marketing budget. It takes an honest look.
Two things worth doing this month. First, work out what an empty place is actually costing you, because the number tends to be larger than people expect. Our ROI calculator does that in a couple of minutes, and our guide on the return on enrolment marketing shows how to read the result. Second, look at how your centre comes across to a family searching online, and where enquiries are slipping between first contact and a booked tour.
That's the point of our free enrolment story audit. We look at how your centre appears to a family deciding right now, map where the story and the follow-up are letting places go empty, and point to the one or two changes that would protect your occupancy over the next twelve months. If you want a hand building it out afterwards, that's what EEVA does, but the audit stands on its own.
The forces bearing down on your margin this year aren't going to ease. The one thing still in your hands is how many families choose you. That's worth treating as the priority it now is.