When operating a hotel in a regional core city or considering acquiring one, the first question to ask is: “How much additional room supply can this city absorb?” This article maps the supply absorption capacity of eight regional core cities that we have not yet analyzed as a standalone theme — Kanazawa, Matsuyama, Takamatsu, Toyama, Kagoshima, Utsunomiya, Oita, and Nagano — by overlaying the “Golden Week (GW) 2026 observed sold-out rate” (a measure of demand strength) with “2026 new hotel openings” (a measure of supply pressure). All sold-out judgments are made on a room basis (remaining room count), using confirmed data from dates where check-ins have already been completed.

Conclusion — All 8 Cities Show Absorption Capacity, but Rankings Differ

Let us present the conclusion first. Looking at the GW2026 observed sold-out rate (the share of properties, among those with OTA-published inventory covering 30%+ of total rooms, that observed at least one day of sellout), all 8 target cities showed solid demand. At the top are Toyama and Utsunomiya at 50.0%, followed by Matsuyama at 40.0%, Kagoshima at 37.7%, and Kanazawa at 34.8%. Generally, a sold-out rate exceeding 30% signals a market where “peak demand overwhelms existing inventory — meaning large supply absorption capacity.” Takamatsu at 28.0% and Nagano at 18.4% sit in the mid-tier, leaving room for growth.

On the other hand, looking at 2026 new openings in the same 8 cities, we see a divide: cities where meaningful supply is coming online (Matsuyama 696 rooms, Utsunomiya 559 rooms, Takamatsu 199 rooms, Kagoshima 151 rooms within the core-city administrative boundaries) versus cities where supply is essentially flat (Kanazawa, Toyama, Oita, Nagano). Overlaying demand strength (sold-out rate) with supply growth, we see: Matsuyama and Utsunomiya are “cities with large absorption capacity where new supply rides on strong demand”, and Toyama, Kanazawa, Kagoshima, and Oita are “cities where demand is strong but supply is essentially unchanged — meaning thick revenue opportunity for existing stock”. Reading regional acquisition potential starting from GW2026 sold-out rates is a perspective we also explore from a different angle in our REIT Whitespace × Demand-Tight Area Acquisition Potential Map.

Source: MetroEngines Research & Consulting (GW2026 sold-out observations N = per table below) / Prepared from OTA-listing-verified data based on the Ministry of Land, Infrastructure, Transport and Tourism “Building Dynamics Statistics Survey.”

Confirming Demand — Measuring GW2026 Sold-Out Rate on a Room Basis

When discussing demand strength, ADR alone is insufficient. A high price means nothing if rooms aren’t selling; conversely, if a modest price consistently produces sellouts, demand is deep. For this article, we tabulated on a room basis how many properties in each city reached “zero remaining rooms” on GW2026 (check-in May 4, 2026), a confirmed peak day. Because we use a date where check-in is already in the past, the true sold-out signal is confirmed — this is the strength of retrospective analysis.

The analysis is limited to properties with OTA-published inventory covering 30%+ of total rooms. Properties supplying very little inventory to OTAs do not meet the preconditions for discussing “sellout,” and this filter reduces each city’s 40-130-property population down to a high-reliability set of 20-66 properties. As shown in the table below, Toyama had 7 of its 14 analyzed properties observe at least one sold-out day; Utsunomiya had 16 of 32.

* Sold-Out Rate = share of properties (among those with OTA-published inventory covering 30%+ of total rooms) that observed at least one day of sellout on a room basis for GW2026 (May 4 check-in). GW average ADR is for May 4, 2026; weekday comparison is against Wednesday, June 10, 2026.

Source: MetroEngines Research & Consulting

Worth noting: ADR level and sold-out rate are not necessarily proportional. Kanazawa’s GW average ADR of ¥56,100 is the highest among the 8 cities, and its +139% premium versus weekday is aggressive; yet its sold-out rate of 34.8% sits at the lower end of the top group. This does not signal weak demand — rather, it reflects Kanazawa’s position as a tourism city connected by the Hokuriku Shinkansen, retaining a demand layer thick enough to sell out 30%+ even at substantially elevated pricing. It is a market actively seeking price-occupancy balance. Conversely, Utsunomiya achieves a 50.0% sold-out rate at a modest GW average ADR of ¥30,600. A pattern of pricing conservatively to ensure occupancy appears widespread across the market, and combining this with tiered pricing offers substantial revenue expansion potential.

The Path to Sellout — Booking Patterns via Early Sold-Out LT

Beyond the sold-out “rate,” the lead time at which sellouts materialize speaks to demand quality. Let us look at the booking trajectories (remaining-room count by LT) of the two fastest-selling representative properties for GW2026, one in each of two cities. Both properties have OTA-published inventory covering more than half of total rooms, giving high confidence in the sold-out signal.

Kanazawa’s representative property (ryokan-style, 64 rooms, with sufficient OTA-published inventory) had 20 of 64 rooms remaining at LT55, dropped below double digits around LT44, reached zero remaining rooms at LT35 (35 days before check-in, around end of March), and subsequently observed 28 cumulative sold-out days. Matsuyama’s representative property (city hotel, 88 rooms) similarly reached zero remaining rooms at LT33 and observed 30 cumulative sold-out days. Neither is a “last-minute rush to fill” pattern — inventory is being steadily absorbed more than a month in advance. This is a demand structure where a tiered pricing approach that avoids locking prices early can work well.

Source: MetroEngines Research & Consulting

The pattern of “reaching sellout in the LT30s” carries significant implications for revenue management. When inventory thins more than a month before check-in, there is time to shift remaining inventory into higher price tiers. In these markets where high capture power is already proven, minimizing early-booking discounts and combining that with tiered pricing responsive to inventory scarcity opens further revenue expansion opportunities.

Supply Trends — Where Are 2026 New Hotels Opening?

Having confirmed demand, we now overlay the supply side. Based on MetroEngines Research’s OTA-listing-verified tracking, 2026 new openings within the core-city administrative boundaries (excluding rental villas, cottages, etc.) break down as follows: Matsuyama 7 properties / 696 rooms, Utsunomiya 6 properties / 559 rooms, Takamatsu 2 properties / 199 rooms, Kagoshima 1 property / 151 rooms. Meanwhile, Kanazawa, Toyama, Oita, and Nagano show essentially no new hotel-format openings. The chart below shows the ratio of 2026 new supply to each city’s existing total room count (based on properties MetroEngines Research can verify as operating).

Source: MetroEngines Research & Consulting (OTA-listing-verified basis) / Ministry of Land, Infrastructure, Transport and Tourism “Building Dynamics Statistics Survey.”

The highest new-supply ratio belongs to Utsunomiya (+10.5% versus existing stock), followed by Matsuyama (+9.3%). Both cities show sold-out rates of 40-50%, meaning demand runs ahead of supply. This is new supply riding on strong demand, with substantial room for the market to absorb newly opening inventory. Moreover, amid continued construction cost inflation (discussed below), new development at such locations is naturally supply-paced, which means existing properties face relatively limited risk of oversupply — an additional upside.

Kanazawa, Toyama, Oita, and Nagano, meanwhile, see essentially flat 2026 hotel-format new supply. In these cities, sold-out rates confirm demand at 30-50% (Nagano at 18.4%), yet supply does not increase, giving existing stock relatively thick revenue opportunity. Toyama in particular combines a 50.0% sold-out rate with almost zero new supply — existing properties are well-positioned to capture demand.

* New opening data is on an OTA-listing-verified basis. Since listings typically appear several months before opening, the count and room totals for months in the latter half of 2026 and beyond may increase with future listings. Supply ratios in this article reflect observations as of the survey point.

Absorption Capacity Map — Reading 8 Cities via Demand × Supply

Overlaying demand (sold-out rate) and supply (new openings as share of existing stock) on a geographical map produces the regional core-city investment and operations map. In the map below, circle size represents existing total room count, and color intensity represents sold-out rate strength.

Source: MetroEngines Research & Consulting

The map reveals roughly three configurations. First, the Matsuyama/Utsunomiya type (strong demand × rising supply): thick demand at a 40-50% sold-out rate combined with new supply at +9-10% of existing stock. The market is in expansion mode, offering absorption capacity for both new and existing properties — a growth type. Second, the Toyama/Kanazawa/Kagoshima/Oita type (strong demand × flat supply): demand is confirmed but supply is not growing, giving existing properties thick room to grow occupancy and rates. Third, the Takamatsu/Nagano type (mid-tier demand): sold-out rates of 18-28% mean limited peak-demand overwhelm today, but seasonal/event-driven demand creation and pricing optimization leave room for improvement. Takamatsu in particular is linked to broader Setouchi-area development momentum, and its investment structure is well-covered in Takamatsu × Naoshima Mandarin Oriental Development: A Setouchi-Area Investment Analysis.

Investment & Development Context — What Absorption Capacity Means Under Construction Cost Inflation

When considering new development or acquisition in a regional core city, construction cost trends cannot be ignored. According to the Ministry of Land, Infrastructure, Transport and Tourism “Building Start Statistics,” 2024 average hotel construction cost across all structural types was approximately ¥1.95 million per tsubo, up +41% from approximately ¥1.38 million in 2022. Adding inflation during the construction period, projects opening in 2026-2028 are expected to incur an additional roughly +5% per year (based on Turner & Townsend forecasts). This construction cost inflation structurally constrains the pace of new supply. How construction cost inflation drives new supply contraction in 2027-2029 is analyzed in detail in a separate article.

Overlaying this article’s absorption capacity map sharpens the investment thesis. In markets with strong demand (sold-out rate 30%+) but no new supply — Toyama, Kanazawa, Kagoshima, Oita — construction cost inflation becomes a barrier to new entrants, meaning strategies of acquiring existing stock and expanding revenue through operational improvements gain relative advantage. In markets like Matsuyama and Utsunomiya where supply follows expanding demand, new development can still work, but only with feasibility assumptions that conservatively price in construction costs.

As a profitability benchmark, it helps to reference operating results disclosed by listed REITs. GOP (Gross Operating Profit) margins for stable portfolios are typically observed in the 35-40% range. For a first-year new opening, a conservative estimate around 30% is prudent. For an accommodation-focused hotel in a regional core city, feasibility is verified by balancing this against the ADR range. This article’s 8 cities range from ¥29,600 to ¥56,100 in GW average ADR and maintain ¥16,000 to ¥29,000 even on weekdays. The price floor reflects the compound demand base — business travel, tourism, and events — that supports regional core-city accommodation.

* Per-room-per-day gross operating profit (GOP) shown as a simple calculation of ADR × GOP margin. GOP margin corresponds to the industry benchmarks referenced in the text (stable operations 35-40% / first-year new opening around 30%) mapped to bear, base, and bull cases. Excludes fixed costs, cost of capital, and seasonality; actual business performance depends on occupancy rate, period-average ADR, and operating cost structure.

Summary

Reading the 8 regional core cities through “GW2026 sold-out rate (demand) × 2026 new openings (supply)” reveals that all show market absorption capacity, yet with clearly divided profiles. Matsuyama and Utsunomiya are growth-type markets where supply follows expanding demand. Toyama, Kanazawa, Kagoshima, and Oita are stock-heavy-type markets with strong demand but limited new supply. Takamatsu and Nagano are improvement-potential-type markets with mid-tier demand. In an environment where construction cost inflation suppresses new supply, strategies to acquire and operationally improve existing stock in core cities with confirmed demand gain relative advantage — and this article’s map provides a quantitative starting map. Judging sellouts on a room basis and using a confirmed peak day places demand strength on a solid foundation for each city.

Related Reading

• Takamatsu × Naoshima Mandarin Oriental Development: A Setouchi-Area Investment Analysis — Yield Structure of a ¥300M-per-Room Project and Area-Wide Ripple Effects
• Structural Analysis of Regional Bank-Led “Small-Scale Serial Development & Renovation Funds” — Funding Comparison with Large-Scale REIT Acquisitions