Japan’s population projections toward 2040 pose a new question for the country’s resort investment. Ski fields and hot springs are fixed resources that do not move, but the people who “live” and “work” in those places are set to thin out steadily. Starting from the axis of resident population versus working population, this article quantitatively decodes the conditions under which hotel investment can hold up in locations where the future population is shrinking. Specifically, it places three locations with differing supply-demand structures — Shirahama in Wakayama, Kutchan/Niseko in Hokkaido, and the area around Kanazawa Station in Ishikawa — on two axes, the 2040 population change rate and the worker-to-resident ratio, and organizes their investment viability from the perspectives of securing operational staff and externalizing the demand source.

Conclusion: Even as the Future Population Shrinks, Locations That Externalize Demand Survive

Lining up the three locations reveals that future population shrinkage is not a decisive disqualifier for resort investment. The deciding factor is the structure of the demand source — “does it depend on the local population, or can it capture out-of-area and inbound demand?” Kutchan/Niseko is projected to see its resident population shrink by as much as -14.2% toward 2040, yet winter ADR reaches ¥89,700 per room (Kutchan, February 2026), and commercial land prices are rising at the nation’s top level. This is because demand is supported not by locals but by global skiers and foreign capital investment.

Shirahama, by contrast, has the strongest degree of shrinkage — 2040 population -24.9% and a 42.3% aging rate — and its ADR continues to hover around ¥28,000. Yet even here there are seeds of externalization. Even when the 2025 return of the pandas caused domestic overnight guests to fall by roughly 10,000 year-on-year for the same month, inbound demand had turned to growth. In other words, Shirahama’s investment viability hinges on “whether the demand source shifts from domestic-leisure dependence to inbound and out-of-area demand.” Kanazawa has the highest worker-to-resident ratio of the three (19.6%) and is positioned as a location that stabilizes as an urban-type tourism destination thanks to the wide-area draw of the Hokuriku Shinkansen.

Mapping Future Population × Employment Structure — Why the Three Locations Diverge in Fate

To begin, we plot the three locations on two axes: future population projection and employment structure. The horizontal axis is the 2040 population change rate (the further left, the greater the shrinkage); the vertical axis is the worker-to-resident ratio (the higher, the greater the inflow of employment, commuting, and visits from outside the area). Circle size represents resident population, and color indicates the height of the aging rate. Whether or not a location depends on local demand appears strongly in this vertical axis — the worker-to-resident ratio.

Shirahama sits in the lower left. Its population shrinkage is the largest, and its worker-to-resident ratio is thin. This is a phase where “both residents and workers decline,” meaning hotels face a double structural risk: a shrinking local economy and difficulty securing operational staff. Kutchan/Niseko, by contrast, has a smaller population-shrinkage range than Shirahama (-14.2%), and a worker-to-resident ratio with an office-type employment share of 9.9% and 3,196 employed workers — a commensurate depth of employment relative to a resident population of 10,990. What is decisive is that this employment is not local-oriented services but “externally-driven employment” directed at the lodging, dining, and construction of the ski resort.

The area around Kanazawa Station has the highest worker-to-resident ratio of the three at 19.6%. Supported by an urban-type agglomeration of 35,577 employed workers and a resident population of 35,577, its population shrinkage is also the mildest at -11.4%. In short, the three locations trace a relationship — lower left (local-dependent, strong shrinkage) → center (external-demand dependent, moderate shrinkage) → upper right (urban agglomeration, mild shrinkage) — in which the higher the degree of demand externalization, the smaller the impact of future population risk.

Different Demand Sources, Different Price Dynamics — Three Structures Reflected in ADR Seasonality

The difference in demand-source structure appears directly in the seasonal pattern of prices. When MetroEngines Research’s municipality-level ADR trends (January 2025 – June 2026) are overlaid year-on-year, the three locations trace entirely different shapes. The more a location is supported by external rather than local demand, the more sharply its prices spike in specific seasons.

Kutchan and Niseko trace an extreme V-shape, spiking to ¥69,000–¥89,700 in winter (December–February) and sinking to ¥27,000–¥55,000 from spring to autumn. Kutchan’s ADR in February 2026 was ¥89,700, a large upswing year-on-year. This amplitude cannot be explained by local-resident usage. It is because global ski demand, wealthy inbound visitors, and high-rate condominiums and hotels operated by foreign operators push up winter prices — evidence of a structure fully dependent on out-of-area demand. The fact that Kutchan’s commercial land price rose +15.48% in 2025, and that the Niseko Hirafu district recorded the nation’s top roadside land-price growth rate for three consecutive years, shows that this expectation of external demand is also priced in on the capital side.

Shirahama, in contrast, traces a gentle curve of ¥28,000–¥41,000 throughout the year, with only a small peak from summer (August) beachgoing and leisure demand. Price stability can be read as demand stability, but here it is the flip side of upside potential. In July 2025, the return of the pandas from Adventure World caused the number of overnight guests at the 21 facilities belonging to the Shirahama Onsen Ryokan Cooperative to fall by roughly 10,000 year-on-year for the same month. Meanwhile, local lodging operators report that “inbound is increasing.” Shirahama’s ADR remaining flat is likely because it is in a transitional phase where the shift to the external demand of inbound — amid shrinking domestic leisure demand — has not yet been sufficiently reflected in prices. Conversely, this is precisely where there is room for revenue expansion through demand externalization. Kanazawa is in an urban-type range of ¥22,000–¥36,000, with peaks in the autumn-foliage season (November) and spring befitting a wide-area tourism destination, and its commercial land prices are also holding firm at +3.7% against the backdrop of the Hokuriku Shinkansen’s extension to Tsuruga. A comparison of post-extension ADR across four cities including Kanazawa is examined in detail in our analysis of city-by-city ADR in the third year of the Hokuriku Shinkansen Tsuruga extension.

Feasibility of Securing Operational Staff — The Thinness of the Worker Count Bites

In discussing the investment viability of future population-decline resorts, what is decisive alongside demand is the feasibility of securing operational staff. No matter how much demand exists, a hotel cannot operate unless it can secure the people to clean the rooms, serve the meals, and staff the front desk. This is where the depth of the worker count — the supply side — comes into play.

Kanazawa, with its high worker-to-resident ratio, can access an urban labor market, making staffing relatively easy. Shirahama is thin in both resident population and employed workers, and with a 42.3% aging rate its working-age population is shrinking fast, so additional costs for staffing (recruitment, housing, wage premiums) must be factored in. Niseko has depth of employment but is winter-skewed, relying heavily on seasonal labor and foreign workers during peak periods. The question of how to lock in operational staff in resort areas is explored from a business-feasibility angle in our business-feasibility analysis of hotel employee housing and workforce-infrastructure investment.

Shirahama’s 42.3% aging rate stands out among the three locations. This means the future pool of operational staff will rapidly thin, and securing staff will require additional investment such as housing allowances, year-round employment, and wage premiums. Niseko holds a certain working-age population, but because demand concentrates in winter, it faces two issues simultaneously: maintaining year-round employment and securing labor during peak periods. In fact, in the Niseko area foreign workers have become an important bearer of service supply. Kanazawa, with an urban labor market behind it, is positioned as the location with the lowest staffing hurdle of the three.

Scenario Estimates of Risk-Adjusted Yield — Discounting for Population Decline and Staffing

Let us translate these structural risks into the language of yield. In investment decisions, it is practical to compare locations by risk-adjusted yield — the assumed NOI yield minus a “population-decline discount” and a “staffing premium.” The estimates here are a simplified model based on authoritative benchmarks for construction costs and GOP ratios; they should be read not as definitive figures but as relative comparisons between locations.

Assumptions: Construction costs are based on MLIT’s Building Construction Starts Statistics — in 2024, hotel construction cost averaged ¥1.95 million/tsubo across all structures (¥1.736 million for RC), and in 2025 ¥1.952 million across all structures and ¥2.405 million for steel-frame, with record-high levels continuing. For the GOP ratio, the 38.9% (fiscal period ending December 2024) of the 91 MHM-operated properties disclosed by Invincible Investment Corporation is used as the industry benchmark, with 30–35% adopted as a conservative figure for new openings. The population-decline discount and staffing premium are assumed values set relatively from each location’s 2040 population change rate, aging rate, and worker-to-resident ratio.

This estimate is a simplified model intended for relative comparison between locations; actual investment decisions require a detailed feasibility study of each individual property. NOI yields and each discount are assumed values.

Sensitivity analysis: three scenarios varying assumed NOI yield by ±1.0pt and adjusting the population-decline discount and staffing premium according to each scenario’s demand and staffing assumptions. In both optimistic and pessimistic phases, Niseko/Kutchan — which has externalized its demand source — maintains the highest yield, and the relative ranking between locations does not break down. Figures are assumed values intended for inter-location comparison and are not definitive.

What the estimate shows is a relationship in which the higher the degree of demand externalization, the higher the risk-adjusted yield is preserved. Niseko/Kutchan has a high assumed NOI yield of 9.0%, and even after deducting the population-decline and staffing premiums, 7.0% remains. This is because winter external demand holds up independently of local population shrinkage, so risk originating from future population projections is relatively muted. An analysis that incorporates disaster risk within the same risk-adjusted-yield framework can be found in our disaster-risk × yield analysis of 10 Pacific-coast tourist destinations. Kanazawa’s yield level is modest, but with small discounts it holds stable at 5.5%, giving it an urban-type defensive character.

Shirahama drops to 3.5% on a risk-adjusted basis. This figure honestly reflects its current domestic-leisure dependence, aging, and thin labor pool — but conversely, it is also the location with the greatest upside if it can capture inbound demand. The five-star hotel attraction and the strategy to break away from panda dependence that Shirahama Town is pursuing are precisely a direction toward this demand externalization, and if external-demand capture advances, there is large room to push up the assumed NOI yield. Soaring construction costs (+41% vs. 2022) are also a factor that nationally suppresses new supply, which works as an upside of eased competition for existing facilities.

Organizing Investment Viability — The Three Conditions Under Which Hotels Survive Even as Population Declines

The conclusion drawn from comparing the three locations is clear. Future population shrinkage in itself is not a disqualifying condition for resort investment. The deciding factor is whether demand depends on that shrinking local population. Locations like Niseko and Kutchan, supported by global ski demand and foreign capital, keep growing their prices and land values even as the resident population shrinks by -14.2%. Locations like Kanazawa, with an urban labor market and wide-area draw behind them, stabilize while gently absorbing population decline.

Even in a location like Shirahama, where population shrinkage and aging are strongest, investment viability does not disappear. If it can tackle two directions — externalizing the demand source from domestic-leisure dependence to inbound and out-of-area demand, and making staffing year-round — large upside remains in its currently flat ADR. For resort investors, REIT managers, and municipal tourism-policy officials alike, the axis of investment judgment toward 2040 is shifting from “will the population grow?” to “can demand and labor be captured from outside without depending on the local population?”