Population projections toward 2040 are posing a new question for resort investment in Japan. The ski slopes and hot springs—the underlying resources—do not move, but the people who “live” and “work” in these locations will unmistakably grow thinner. This article starts from the axis of contrasting resident population against employed population, and quantitatively reads the conditions under which hotel investment can stand up in locations where future population shrinks. Specifically, we place three locations with differing supply-demand structures—Shirahama (Wakayama), Kutchan/Niseko (Hokkaido), and the area around Kanazawa Station (Ishikawa)—on the two axes of the 2040 population change rate and the employment-to-residence ratio, and organize their investment viability from the perspectives of securing operational staff and the externalization of demand sources.

Conclusion: Even as future population shrinks, locations that can externalize their demand source will survive

Lining up the three locations makes it clear 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 demand from outside the area and inbound visitors?” In Kutchan/Niseko, the resident population is projected to shrink as much as -14.2% toward 2040, yet winter ADR reaches ¥89,700 per room (Kutchan, February 2026) and commercial-district land prices are rising at the nation’s top level. This is because demand is sustained not by locals but by the world’s skiers and foreign capital investment.

Shirahama, by contrast, has the strongest degree of shrinkage at a 2040 population of -24.9% and an aging rate of 42.3%, with ADR continuing flat at around ¥28,000. Even here, however, there are seeds of externalization. Even in the phase when the return of the pandas in 2025 cut domestic overnight guests by about 10,000 year-on-year for the same month, inbound visitors had turned to growth. In other words, Shirahama’s investment viability hinges on “whether the demand source can be shifted from domestic-leisure dependence to inbound and out-of-area demand.” Kanazawa has the highest employment-to-residence ratio of the three locations (19.6%) and is positioned as a location that stabilizes as an urban tourism destination, drawing visitors over a wide area via the Hokuriku Shinkansen.

Mapping future population against employment structure — why the three locations face diverging fates

First, we plot the three locations on the two axes of 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 employment-to-residence 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 level of the aging rate. Whether a location is free of dependence on local demand appears strongly along this vertical axis—the employment-to-residence ratio.

Shirahama sits in the lower-left. Its population shrinkage is the largest and its employment-to-residence ratio is thin. This is a phase where “both the people who live there and the people who work there decline,” meaning the hotel faces a dual structural risk of a shrinking local economy and difficulty securing operational staff. Kutchan/Niseko, on the other hand, has a smaller population-shrinkage range than Shirahama (-14.2%), and its employment-to-residence ratio carries a commensurate depth of employment, with an office-type employment ratio of 9.9% and 3,196 employed workers against a resident population of 10,990. Crucially, the employment here is not local-facing services but “externally-driven jobs” directed at lodging, food and beverage, and construction for the ski resort.

The area around Kanazawa Station has the highest employment-to-residence ratio of the three locations 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 other words, the three locations describe a relationship of 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-source externalization, the smaller the impact of future population risk.

Different demand sources mean different price movements — three structures revealed by ADR seasonality

The difference in demand-source structure appears directly in the seasonal pattern of prices. Overlaying MetroEngines Research’s municipality-level ADR trends (January 2025 to June 2026) as a year-over-year overlay, the three locations describe completely different shapes. The more a location is supported by external rather than local demand, the more sharply prices spike in specific seasons.

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

Shirahama, by contrast, describes a gentle curve of ¥28,000–¥41,000 throughout the year, with only a small peak from summer (August) beach and leisure demand. Price stability can be read as demand stability, but the flip side here is the latent upside. In July 2025, the return of the pandas from Adventure World cut overnight guests at the 21 facilities belonging to the Shirahama Onsen Ryokan Cooperative by about 10,000 year-on-year for the same month. At the same time, local lodging operators have voiced that “inbound visitors are increasing.” Shirahama’s ADR remaining flat is thought to reflect a transitional period in which, amid shrinking domestic leisure demand, the shift to inbound external demand is not yet sufficiently reflected in prices. Put another way, there is room here for revenue expansion through demand-source externalization. Kanazawa sits in an urban-type range of ¥22,000–¥36,000, with peaks during the autumn-foliage season (November) and spring, in a shape befitting a wide-area tourism destination; against the backdrop of the Hokuriku Shinkansen’s extension to Tsuruga, its commercial-district land price is also moving firmly at +3.7%. An ADR comparison of the four cities including Kanazawa after the Tsuruga extension is examined in detail in our analysis of city-by-city ADR in the third year of the Hokuriku Shinkansen Tsuruga extension.

The feasibility of securing operational staff — the thinness of the employed-worker count bites

In discussing the investment viability of resorts facing future population decline, the feasibility of securing operational staff is, alongside demand, decisive. However much demand there is, a hotel cannot operate if it cannot secure people to clean rooms, serve meals, and staff the front desk. What matters here is the depth on the supply side—the number of employed workers.

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

Shirahama’s aging rate of 42.3% stands out among the three locations. This means the future pool of operational staff will thin rapidly, and staffing 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 must simultaneously confront two issues: maintaining year-round employment and securing labor during the peak. In fact, in the Niseko area foreign workers have become an important pillar of service supply. Kanazawa, with an urban labor market behind it, is positioned as the location with the lowest hurdle to staffing among 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 the risk-adjusted yield, obtained by subtracting a “population-decline discount” and a “staffing-premium” from the assumed NOI yield. The estimate here is a simplified model based on authoritative benchmarks for construction costs and GOP ratios; it should be read not as a definitive figure but as a relative comparison between locations.

Assumptions: Construction costs are based on MLIT building-starts statistics—in 2024, hotel construction cost averaged ¥1.95 million/tsubo across all structures (RC construction ¥1.736 million), and in 2025 it remained at record-high levels of ¥1.952 million across all structures and ¥2.405 million for S construction. The GOP ratio adopts the 38.9% (fiscal period ending December 2024) across 91 MHM-operated properties disclosed by Invincible Investment Corporation as the industry benchmark, with a conservative figure of 30–35% 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 employment-to-residence 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. The NOI yield and each discount are assumed values.

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

What the estimate shows is the relationship that the higher the degree of demand-source externalization, the higher the risk-adjusted yield is kept. Niseko/Kutchan has a high assumed NOI yield of 9.0%, and even after subtracting the population-decline and staffing premiums, 7.0% remains. This is because winter external demand stands up independently of local population shrinkage, so risk originating from future population projections has relatively little effect. An analysis that incorporates disaster risk within this same risk-adjusted-yield framework is also useful for reference in our analysis of disaster risk × yield across 10 Pacific-coast tourism destinations. Kanazawa’s yield level is modest, but its discounts are small and it stabilizes at 5.5%, giving it an urban-type defensive character.

Shirahama declines to 3.5% on a risk-adjusted basis. This figure honestly reflects its current domestic-leisure dependence, aging, and thin labor; 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 of breaking free from panda dependence that Shirahama Town is pursuing point precisely in the direction of this demand-source externalization, and if external-demand capture advances, there is substantial room to push up the assumed NOI yield side. The surge in construction costs (+41% versus 2022) is also a factor that nationally restrains new supply, working as an upside of competitive easing for existing facilities.

Summarizing investment viability — the three conditions under which “a hotel survives 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 decisive factor lies in whether demand depends on that shrinking local population. Locations supported by global ski demand and foreign capital, like Niseko and Kutchan, continue to grow prices and land values even with resident population shrinking -14.2%. Locations with an urban labor market and a wide-area draw behind them, like Kanazawa, stabilize while gently absorbing population decline.

Even in a location where population shrinkage and aging are strongest, like Shirahama, 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—substantial upside remains in its currently flat ADR. For resort investors, REIT asset managers, and municipal tourism-policy officers alike, the axis of investment decisions toward 2040 is shifting from “will the population grow?” to “can demand and staff be drawn in from outside without depending on the local population?”