How much more can a ryokan charge per night once a guest room has its own open-air bath? MetroEngines Research compared 792 ryokan and resort hotels that list both rooms with a private open-air bath and standard rooms, pairing the cheapest plans at the same property, on the same stay date and with the same meal plan (dinner and breakfast). The listed price of the room with a private open-air bath was higher by a median of about ¥10,000, or +23.4%, per room per night.

Separately, properties where at least 10% of guest reviews speak favourably about rooms with a private open-air bath (the mention rate) sit at 2.11x the estimated settled ADR of properties of the same type in the same municipality where such mentions are almost absent (ryokan, median across 183 municipalities). That gap, however, also reflects differences in room size, cuisine and property grade. This article treats the two yardsticks separately and uses the premium attributable to the facility itself to estimate the payback period for adding private open-air baths (balcony-conversion and extension types).

Source: MetroEngines Research & Consulting / HotelBank Editorial Team research (NLP analysis) / Japan Tourism Agency, Overnight Travel Statistics Survey

Where guests remember the private open-air bath — 979 properties at a 10%+ mention rate, 43% of them in four prefectures

The HotelBank Editorial Team classified guest reviews posted between September 2024 and September 2026 using NLP. Across 6,331 ryokan and resort hotels with at least 50 reviews (2,198,040 reviews), 84,969 reviews spoke favourably about rooms with a private open-air bath. Split by each property’s mention rate, 979 properties (15.5%) are at 10% or more, 1,759 at 1–10% and 3,593 below 1%.

The top of the ranking by mention count is dominated by properties with many rooms and a large review base. In first place, Hotel Nanpuso (ホテル南風荘) in Hakone, Kanagawa, has 404 of its 1,351 reviews mentioning its rooms with private open-air baths, a mention rate of 29.9%. By mention rate itself, among properties with 200 or more reviews, Ryokan Koyo (旅館 紅葉) in Takayama, Gifu, stands at 49.2%, Homare no Hikari Suigetsu (ほまれの光 水月) in Ito, Shizuoka, at 43.7% and Chichibu Onsen Hananoya (ちちぶ温泉 はなのや) in Chichibu, Saitama, at 43.2%: almost one guest in two talks about the in-room open-air bath.

Source: HotelBank Editorial Team research (NLP analysis). Covers reviews posted between September 2024 and September 2026. Mentions are the number of reviews mentioning rooms with a private open-air bath favourably.

Counting properties with a mention rate of 10% or more by prefecture, the four prefectures of Shizuoka (160), Kanagawa (99), Oita (97) and Kumamoto (65) account for 421 properties, or 43.0% of the national total of 979. These are the hot-spring areas — Izu and Hakone, Yufuin and Beppu, Aso and Kurokawa — where small inns have long competed on in-room open-air baths. In these prefectures one ryokan or resort in three is in the high-mention group, whereas in Nagano (7.0%) and Hokkaido (9.0%) the share is below one in ten. Penetration varies fivefold between prefectures.

Source: HotelBank Editorial Team research (NLP analysis) (ryokan and resort hotels with at least 50 reviews; top 10 prefectures by number of properties with a mention rate of 10% or more)

Source: HotelBank Editorial Team research (NLP analysis), MetroEngines Research & Consulting (788 ryokan and resort hotels with a mention rate of 10% or more and at least 100 reviews; circle size = mention rate)

The higher the mention rate, the higher the ADR — ryokan rise from ¥12,400 to ¥30,600 across five bands

Splitting properties into five mention-rate bands and lining up each band’s estimated settled ADR (median of the 12-month average), ryokan rise step by step from ¥12,400 below 1%, to ¥19,800 at 1–5%, ¥24,300 at 5–10% and ¥30,600 at 10–20%. The gap between the below-1% and 10–20% bands is 2.47x. Resort hotels move in the same direction, from ¥15,000 to ¥34,900.

Note also that ADR levels off slightly in the 20%-and-above band. Ryokan in this band have a median of just 13 rooms and are mostly small inns with an open-air bath in every room. Rooms with private open-air baths appear to support pricing both when used to carve out part of the inventory as a premium tier and when they define the product of the whole property.

Source: MetroEngines Research & Consulting / HotelBank Editorial Team research (NLP analysis) (ryokan N=4,337 properties, resort hotels N=1,269 properties; estimated settled ADR is the median of monthly averages from September 2025 to August 2026)

2.11x within the same municipality — the multiple peaks in June and bottoms out in August

To even out differences in location, we compared only combinations where both the high-mention group and the non-mention group exist within the same municipality and property type. For ryokan, 183 municipalities qualify (717 high-mention and 1,183 non-mention properties); the median multiple across municipalities is 2.11x and the median gap is ¥15,900. In 94.5% of municipalities, the high-mention group’s ADR exceeds the non-mention group’s. Resort hotels come out almost the same, at 2.12x across 54 municipalities.

This 2.11x cannot, however, be read directly as the value of an open-air bath. Comparing properties of similar size, the multiple is 2.34x among properties with 30 rooms or fewer (154 municipalities), 1.82x at 31–80 rooms (46 municipalities) and 1.45x at 81 rooms or more (12 municipalities): the larger the property, the smaller the multiple. The high-mention group includes many small inns positioned at the premium end through their cuisine and furnishings as well, so it is more natural to see this gap as a difference in “the market position of a property built around rooms with private open-air baths” than as the value of the facility alone.

Laid out month by month, seasonal differences appear. The multiple is largest in June at 2.29x and smallest in August at 1.97x. In June the non-mention group’s ADR drops to ¥11,000 while the high-mention group holds at ¥25,200. In August, family travel demand lifts the non-mention group’s rates and the gap narrows. In yen terms the gap is widest in December (¥17,300) and January (¥17,100). Rooms with private open-air baths work as a device that supports rates both in the rainy season, when demand troughs, and in winter, when a hot bath is worth more.

Source: MetroEngines Research & Consulting / HotelBank Editorial Team research (NLP analysis) (ryokan; 183 municipalities with both a high-mention and a non-mention group. Monthly property counts: 692–717 in the high-mention group, 1,108–1,182 in the non-mention group)

Source: MetroEngines Research & Consulting / HotelBank Editorial Team research (NLP analysis) (estimated settled ADR is the median of monthly averages from September 2025 to August 2026. Note that in municipalities with few properties, a single property can sway the level.)

The facility’s own premium within the same property: +23.4%, about ¥10,000

What an investment decision on a renovation can use is not the 2.11x, which includes the property’s positioning, but the price premium earned by adding an open-air bath within the same property. We therefore took properties that list both rooms with a private open-air bath and standard rooms (966 properties where rooms with a private open-air bath account for 5–60% of listed plans) and compared the cheapest plans with the same stay date and meal plan across 16 Wednesdays and Saturdays in October–November 2026.

With dinner and breakfast, 792 properties and 7,422 pairs could be compared, and the premium for a room with a private open-air bath came to a median of +23.4%, ¥10,000 (per room per night, tax-inclusive). The middle half falls between ¥4,000 and ¥20,400, and at 87.4% of properties the room with the open-air bath is the more expensive. With breakfast only (+26.6%, ¥8,800) and room only (+28.8%, ¥8,800), the premium in yen barely changes, showing that the price difference attaches to the room itself, not the meals.

Source: MetroEngines Research & Consulting (listed prices, 2 guests per room, tax-inclusive. 16 Wednesdays and Saturdays from October 3 to November 25, 2026, as listed on September 19, 2026. Premium % and ¥ are the median across properties of each property’s median.)

By day of week, the premium in yen is almost identical — ¥9,900 on Wednesdays and ¥10,000 on Saturdays — but in percentage terms it is higher on weekdays: +24.1% on Wednesdays versus +19.1% on Saturdays. Standard-room rates also rise on Saturdays, diluting the percentage. The effect is therefore larger as a way to lift weekday rates.

By price band, this “close to flat” character becomes even clearer. At properties where the cheapest half-board plan for a standard room is under ¥30,000, the premium is +34.0%; it falls to +27.7% at ¥30,000–45,000, +19.7% at ¥45,000–60,000 and +11.3% at ¥60,000 and above, yet the premium in yen stays within ¥8,600–¥10,100. An in-room open-air bath effectively carries a price tag of around ¥10,000 a night regardless of a property’s price band, so the lower the price band, the greater the room to improve rates in percentage terms.

Source: MetroEngines Research & Consulting (listed prices, dinner & breakfast. Property × stay-date pairs classified by the price band of the cheapest standard-room plan. Under ¥30,000 N=141 properties; ¥30,000–45,000 N=436; ¥45,000–60,000 N=486; ¥60,000 and above N=435)

By prefecture (where 15 or more properties could be compared), the premium is largest in the mountain hot-spring areas of northern Kanto and Koshinetsu: Tochigi +33.0% (¥16,500), Niigata +32.6% (¥13,200), Nagano +29.0% (¥17,400) and Gunma +28.6% (¥15,400). On the other hand, the rank correlation with penetration seen earlier (the share of properties with a 10%+ mention rate) is a weak −0.28, suggesting that the size of the premium is driven less by prefecture-level penetration than by each property’s price band and room mix.

Source: MetroEngines Research & Consulting (listed prices, dinner & breakfast; the 10 prefectures with the most comparable properties)

Capex for adding in-room open-air baths — balcony conversion vs extension

There are two broad ways to add an open-air bath to a guest room: the balcony conversion, which installs a tub on an existing balcony or terrace, and the extension, which adds floor area — for example on the garden side of the ground floor — to create an open-air space. Both involve more work items than an ordinary room renovation: waterproofing and subfloor, water supply and drainage with drainage falls, piping and insulation to bring hot-spring water from the source (or heating equipment), the tub itself, screening and handrails, electrical work for lighting and ventilation, and design and permit applications. Relo Hotel Solutions (リロホテルソリューションズ), which works on revitalising lodging facilities, puts the cost of renovating one guest room at ¥1M–5M and one private bath at ¥3M–10M or more, and notes that converting a room into one with a private open-air bath can cost ¥10M or more.

Where an extension is involved or an upper-floor balcony is used, regulatory checks drive both the schedule and the cost. The main issues are set out below; which renovations require a building confirmation application, and the hygiene rules and local ordinance standards for bathwater, should be confirmed with the building authority and public health centre for each project.

Source: Compiled by the HotelBank Editorial Team from the Building Standards Act (Articles 6 and 86-7), its Enforcement Order (Article 85), the Hot Springs Act (Article 15), “On the Method of Calculating Floor Area” (Ministry of Construction Housing Guidance Notice No. 115, 1986) and Kawasaki City’s “Water Quality Testing of Bathrooms in Inns and Hotels”. Whether a given project complies must be confirmed with the competent building authority and public health centre.

Payback estimates — 5.7 years for a balcony conversion in the base case

Working through the assumptions, at the average ryokan occupancy of 38.2% (Japan Tourism Agency, Overnight Travel Statistics Survey, 2025 final figures, full year), a balcony conversion pays back in 5.7 years in the base case (premium ¥9,100) and an extension in 11.1 years. At an upper-quartile premium (¥18,600), these shorten to 2.4 and 4.7 years respectively. Rooms with private open-air baths are likely to book more easily than standard rooms; at 50% occupancy, the base case comes to 4.1 and 7.9 years.

Source: MetroEngines Research & Consulting (assumptions as set out under “■ Assumptions” in the text; lost revenue already added back to construction cost)

Source: MetroEngines Research & Consulting (case with 38.2% occupancy, full year, and additional operating cost of ¥300,000 per year)

Put the other way round, the premium needed to pay back within 10 years at 38.2% occupancy is ¥6,100 per room per night for a balcony conversion and ¥9,800 for an extension (both tax-exclusive equivalent). With the median premium from the same-property comparison at ¥9,100 tax-exclusive, a balcony conversion comfortably gets there at a median property, while for an extension the test is whether the product can be designed to earn somewhat above the median. If occupancy rises to 50%, the premium an extension needs falls to ¥7,500.

Implications for investment decisions — how to use a flat-rate premium

First, the lower-to-mid price bands have the most room for improvement in percentage terms. A premium that stays around ¥10,000 regardless of price band means a rate improvement of +34% at a property whose cheapest half-board standard-room plan is under ¥30,000, but +11% at one priced at ¥60,000 or more. When prioritising renovations, the lower a property’s current price band, the higher the return on investment is likely to be.

Second, a phased roll-out is easier to structure than converting every room. The same-property comparison here covers properties where rooms with a private open-air bath account for 5–60% of listed plans. Fitting out a few rooms first with the cheaper balcony conversion, confirming the premium and occupancy, and then adding more pushes back the regulatory consultations and the large construction cost of the extension type.

Third, it can be valued as a facility that supports weekday and off-season rates. The premium percentage is higher on Wednesdays than on Saturdays, and the ADR multiple is largest in June and February. Building it into the business plan as a facility that lifts rates in demand troughs, rather than one aimed at upside in peak season, makes the payback outlook easier to establish.

Fourth, for acquirers and asset managers, the share of rooms with private open-air baths and the premium they achieve are a direct indicator of upside. For investors acquiring existing ryokan and REIT managers holding them, balcony depth, space on the garden side of the ground floor, spring flow capacity and remaining floor-area ratio are “dormant options” for raising future room rates.

Summary

Properties with many reviews speaking favourably about rooms with a private open-air bath sell at 2.11x the estimated settled ADR of properties in the same municipality. Most of that, however, reflects the property’s overall positioning; the premium for the facility itself is closer to the +23.4%, about ¥10,000, found by comparing the cheapest half-board plans within the same property. This premium is close to a flat amount regardless of price band and works on weekdays and in the off-season too. A ¥5M-per-room balcony conversion pays back in 5.7 years in the base case and a ¥10M-per-room extension in 11.1 years, shrinking to a few years if occupancy runs higher or an upper-quartile premium is achieved. In-room open-air baths are an option existing ryokan can use to raise room rates — one whose numbers can be tested.