About an hour by car from central Sapporo, with its inns strung along National Route 230, Jozankei Onsen occupies an unusual position among Hokkaido’s hot spring towns: it is a city-adjacent resort. MetroEngines Research took stock of the 2km radius centered on Jozankei Onsen and found 23 lodging facilities with 2,316 rooms listed on major booking sites, of which 18 properties with 1,774 rooms were operating, meaning sales prices were confirmed in the most recent 3 months. Among the 16 operating properties for which an estimated settled ADR could be calculated, the median was ¥24,000 in September 2026 and ¥28,400 in December 2025, a price calendar that peaks in winter. This article breaks down the room stock within this 2km radius by size band and opening era, then overlays monthly estimated settled ADR, estimated OCC and booking curves for Hokkaido’s ryokan and resort hotels, and land price and disaster-risk data from the Ministry of Land, Infrastructure, Transport and Tourism (MLIT). It then tests the ADR required by a 100-room renovation and by a new 20-room build with private open-air baths against actual market levels.

The room stock in this article covers lodging facilities with 10 or more rooms (excluding leisure/love hotels) within a 2,000m radius of Jozankei Onsen. “Operating” refers to properties with sales prices confirmed on major booking sites in the most recent 3 months (September–November 2026) (as of November 1, 2026; compiled by MetroEngines Research). Opening year is based on each property’s founding or opening year and may differ from the age of the building.

The conclusion first. Room stock within 2km of Jozankei has been nearly flat, from 15 properties with 1,966 rooms in 2017 to 18 properties with 1,925 rooms in 2026 (annual stock counted from opening and closure years, excluding 1 property with 39 rooms whose opening year is unknown; this definition differs from the 18 operating properties with 1,774 rooms counted from recent sales data), so supply pressure is low. Prices, however, are clearly tiered by size band. The median estimated settled ADR is ¥13,600 for large properties with more than 100 rooms, ¥24,500 for those with 30–100 rooms, and ¥29,800 for small properties with fewer than 30 rooms: the smaller the property, the higher the rate. This tiering is precisely where the room for reinvestment lies. Even at ¥12 million per room, renovating a large property requires an ADR uplift of only ¥5,800–¥7,200, and the resulting level sits inside actual rates in the middle band. A new 20-room build, by contrast, requires an ADR of ¥64,300–¥90,800 once current construction costs and increases through 2028 are factored in, and only 1 property within 2km reaches that level. Our reading is that in Jozankei, upgrading the large buildings that already exist fits market prices better than building new.

Property Inventory Within 2km — 6 Properties With 100+ Rooms Hold 70% of Rooms, 5 With Fewer Than 30 Set the Top of the Rate Range

Let us start with what is actually there. Splitting the 23 properties and 2,316 rooms listed within the 2km radius into three size bands gives 6 large properties with more than 100 rooms (1,645 rooms, 70% of the total), 12 mid-size properties with 30–100 rooms (587 rooms) and 5 small properties with fewer than 30 rooms (84 rooms). Limited to operating properties, that becomes 4 large properties with 1,226 rooms, 9 mid-size with 464 rooms and 5 small with 84 rooms; every small property has observable sales prices in the most recent 3 months. The picture is a two-tier structure: the town’s rooms are concentrated in a very few large properties, while small inns opened since the 2010s accumulate around the edges.

Cutting by opening era reveals the history of reinvestment. Of the 22 properties with a confirmed year, 8 properties with 337 rooms opened in the 2010s and 2020s, all with around 100 rooms or fewer. Grand Blissen Hotel Jozankei (グランドブリッセンホテル定山渓, opened 2021, 68 rooms), Yuraku Soan (ゆらく草庵, opened 2022, 102 rooms, with an onsen bath in every room) and Executive Suite Suirei (エグゼクティブスイート翠嶺, 33 rooms), which opened in December 2024 by converting the 15th and 16th floors of Jozankei View Hotel (定山渓ビューホテル), all moved up the rate range through small or mid-size formats or reuse of existing buildings rather than large new-build investments. Suirei is counted as a separately listed property, and at a September 2024 business briefing the operator described adding a sauna to the main bath together with converting the upper-floor rooms (Travel Watch, September 5, 2024). That this method of carving high-rate rooms out of a large building is already being executed in Jozankei underpins the investment scenarios later in this article.

The positioning chart shows a clear downward slope: the more rooms on the horizontal axis, the lower the estimated settled ADR on the vertical axis. The band with fewer than 30 rooms reaches a ceiling of ¥131,900 (a 26-room chalet-style property), while the band with more than 100 rooms converges around ¥13,600. The mid-size band spreads from the ¥10,000s to the ¥30,000s around a center of ¥24,500, with properties differentiated by private open-air baths or cuisine toward the top and volume properties for groups and families toward the bottom. The thin part of the range is the “50–150 rooms × ¥30,000–¥50,000” zone: only 2 operating properties in the 50-room range reach the ¥30,000s (Jozankei Tsuruga Resort Spa Mori no Uta (定山渓 鶴雅リゾートスパ 森の謌) and Shogetsu Grand Hotel (章月グランドホテル)), and among properties with 60 or more rooms the highest is Yuraku Soan (102 rooms) at ¥26,800. If large properties keep carving part of their rooms into a higher band, this zone should fill naturally.

Monthly Estimated Settled ADR — Peaks in December and February, a Trough in June, and YoY Figures to Be Read Alongside Sample Changes

The seasonal price pattern captures Jozankei’s character as a city-adjacent hot spring town. The estimated settled ADR of Sapporo’s Minami Ward forms a winter peak of ¥27,200 in December 2025 and ¥25,600 in January 2026, with ¥19,200 in June 2026 as the low point of the year. Many of Hokkaido’s tourist destinations peak in summer, but rates in Minami Ward rise in winter on snow-view hot springs, the year-end and New Year holidays, and overflow from Sapporo lodging demand during the February Snow Festival. The median of the 16 properties within 2km has the same shape, at ¥28,400 in December 2025 and ¥28,100 in February 2026 against ¥23,000 in June, leaving the winter peak +23.4% above the summer trough.

Year-over-year comparisons call for care. Minami Ward’s ¥21,900 in September 2026 was -7.2% against ¥23,500 in September 2025, but the number of properties in the estimate rose from 22 to 25 over the same period. A median is sensitive to sample composition: when properties at lower price points join the sample, the median falls even if no individual property changes its rates. Making the same comparison on the fixed sample of 16 properties within 2km gives ¥24,000 in September 2026 against ¥24,900 a year earlier, a decline of -3.6%, smaller than for the ward as a whole. In other words, more than half of Minami Ward’s YoY decline can be explained by a change in the price mix, and the remaining few points represent an actual adjustment in Jozankei. The winter side is firm: Minami Ward was +6.6% YoY in December 2025 and nearly flat at -0.7% in January 2026. December 2026, estimated from listed levels at the time of research, stands at ¥30,100 (N=23), so current pricing is stronger than a year ago. These prices will move as check-in dates approach, however, and should not be treated as final figures.

Setting Jozankei beside nearby hot spring towns shows where it stands. In September 2026, Noboribetsu City was at ¥17,700 and Toyako Town at ¥13,500, both below the ¥24,000 within 2km of Jozankei. Noboribetsu follows a winter pattern, rising to ¥23,200 in January, while Toyako follows a summer pattern, peaking at ¥15,700 in August, so seasonal shapes differ even within central Hokkaido. Jozankei resembles Noboribetsu in peaking in winter, but because it is close enough to capture one-night demand from central Sapporo, its rate floor stays high year-round. The inventories for Noboribetsu and Toyako are covered in our earlier articles on hotel investment in Noboribetsu Onsen and the 61-room new build and rate headroom at Lake Toya Onsen, so this article limits the comparison to one table.

Recent listed prices also confirm the day-of-week step. For November 2026, listed prices at the 16 properties within 2km (all-plan average, 2 guests per room, tax-included) have a Monday–Thursday median of ¥72,800 against ¥88,200 on Saturdays, a gap of +21.3%. Prices reflect how one-night demand from Sapporo residents and Hokkaido travelers concentrates on weekends, and how well weekdays are filled determines year-round revenue. Listed prices sit at a different level from estimated settled ADR (they are all-plan averages including plans with meals), so only the ratio between days of the week should be read here.

Estimated OCC and Booking Curves — Hokkaido Ryokan at 85.1% in October, November Adds 17pt From 45 Days Out to the Final Days

Occupancy is checked using a cohort of ryokan and resort hotels across Hokkaido. Estimated OCC (OTA listed inventory basis, estimate), built from properties listing at least 30% of their total rooms on major booking sites, was 88.1% for ryokan in September 2026 (164 properties / 7,210 rooms) and 85.1% in October (168 properties / 7,247 rooms), and 85.7% for resort hotels in September (84 properties / 9,065 rooms) and 84.4% in October (94 properties / 9,910 rooms). These figures are estimates based on how inventory sold on major booking sites is being consumed and differ from each property’s actual occupancy overall. For reference, the preliminary 2025 figures from the Japan Tourism Agency’s Overnight Travel Statistics Survey put guest room occupancy nationwide at 38.4% for ryokan and 56.9% for resort hotels. Definitions and populations differ, so these are not figures to compare side by side, but it is worth noting that the ryokan segment, on a national average, still has ample room to grow occupancy (Travel Voice, March 2, 2026).

November’s monthly average booking curve shows ryokan at 61.7% at a 45-day lead time, 66.6% at 30 days, 70.1% at 14 days, 71.3% at 7 days and 79.1% at 2 days before check-in, adding about 17 points from 45 days out to the final days. Resort hotels move from 66.5% at 45 days to 84.7% at 2 days, a nearly identical gain of about 18 points, but their level is 4–6 points above ryokan at every lead time. The notable point is that both categories move 8–9 points in the final 7 days. For a city-adjacent hot spring town, this late demand is exactly the “spur-of-the-moment one-night stay” guest from central Sapporo, and it is where Jozankei’s location advantage comes into play.

Demand-side measures are also increasing. To mark the 160th anniversary of the founding of Jozankei Onsen, Sapporo City is funding the “Jozankei Dokodemo Coupon” (定山渓どこでもクーポン) for Sapporo residents from its accommodation tax, running in two periods, August 20–October 1, 2026 and October 31, 2026–February 28, 2027, and distributing ¥3,000 per person per night on a first-come, first-served basis (Jozankei Tourism Association special site). The Jozankei Onsen Liner (定山渓温泉ライナー), a winter-only, reservation-based direct bus linking New Chitose Airport and Jozankei, will run daily from December 19, 2026 to February 21, 2027, giving one-night demand arriving from the airport, including inbound travelers, a route that bypasses central Sapporo (Welcome to Sapporo). Sapporo City’s Jozankei tourism enhancement plan (定山渓観光魅力アップ構想) sets a target of raising total overnight guests in the Jozankei area from 1.197 million in FY2013 to 1.45 million (Sapporo City), and these public demand-stimulation efforts work to thicken the winter peak further.

Site Conditions — A Commercial Zone With 400% FAR and Land Prices Up 9.0%, but Riverside and Hillside Plots Need Zone Checks First

Whether a rebuild or extension is possible depends on zoning and disaster-risk areas. According to MLIT’s Real Estate Information Library, the center of the onsen town (Jozankei Onsen Nishi 3-chome) is a commercial zone with 400% FAR and 80% building coverage in a quasi-fire prevention district, with a land price of ¥46,000/㎡, +9.0% YoY, in the Prefectural Land Price Survey as of July 1, 2026. The official land price along National Route 230 (Higashi 3-chome) is ¥27,800/㎡ (+6.9%), and Nishi 1-chome on the residential side, a Category 2 Residential Zone, is ¥11,000/㎡ (+6.8%). All three points are up YoY, as Sapporo’s land price growth reaches the onsen town in Minami Ward. Even assuming the 1,500㎡ site needed for a 20-room inn on commercial land in the onsen town, land would cost only about ¥69 million, less than 10% of total investment. Investment in Jozankei is determined by the building and its equipment, not the land.

Overlaying the disaster-risk maps shows how directly Jozankei’s terrain translates into site conditions. The flood inundation zone for the Toyohira River at maximum assumed scale runs in a narrow strip along the river channel, and most of the commercial land along National Route 230 at the heart of the onsen town lies outside it. Matching the locations of the 23 listed properties against the zones, only 1 property overlaps the flood inundation zone (depth 0.5–3.0m). The two sides of the valley, on the other hand, are largely steep slopes: 5 properties overlap the landslide alert zone for steep-slope failure (Yellow Zone), and 1 of them also touches the special alert zone (Red Zone). Debris-flow alert zones are also designated along the tributaries. Because structural restrictions on buildings and development permit requirements apply within special alert zones, rebuilds and extensions on affected sites must be designed around the zone designation. The commercial land at the center of the onsen town, by contrast, combines the regulatory headroom of 400% FAR with a location outside the zones, which makes it well suited to converting upper floors of existing buildings or extending on-site.

Investment Scenarios — A 100-Room Renovation Needs ¥5,800–¥7,200 of ADR Uplift, a New 20-Room Build Needs ¥64,300–¥90,800

Using the material so far, we back-calculate the required ADR for two scenarios. Common assumptions are occupancy (assumption) of 65% (full-year, this article’s assumption), 70% GOP flow-through on incremental ADR, and a 30% GOP margin for new builds (this article’s assumption). All are simplified estimates, and an actual investment decision requires a detailed feasibility study.

Scenario A: Room renovation at a 100-room property. The median estimated settled ADR of the 4 operating large properties is ¥13,600. Assuming Capex of ¥8 million, ¥12 million or ¥16 million per room (covering room interiors, wet-area replacement and partial renovation of common areas), and requiring incremental GOP of 8% or 10% per year on invested capital, the required ADR uplift at ¥12 million per room is ¥5,800 (8%) to ¥7,200 (10%). The post-renovation level would be ¥19,400–¥20,900, below the ¥24,500 median of the 30–100 room band within 2km, and thus a price range that already exists in the market. Even at ¥16 million per room the level reaches ¥23,300, still short of the upper part of the mid-size band. Put differently, renovating a large property is not an investment in “creating a price the market does not have” but in “moving toward a price already working in the neighboring size band,” which makes it highly feasible on price.

Scenario B: A new 20-room build with private open-air baths. We assume 80㎡ of gross floor area per room (50㎡ of guest room plus an allocation for common areas, baths and kitchen), for 1,600㎡ of gross floor area or about 484 tsubo; 1,500㎡ of land acquired at the onsen town’s commercial land price of ¥46,000/㎡; and design and FF&E at 15% of construction cost. Construction cost, per MLIT’s Building Construction Statistics (lodging use), averaged ¥1.955 million per tsubo across all structure types in 2024, up 40% from ¥1.386 million per tsubo in 2022 to a record level, and the benchmark for ryokan types is said to be ¥1.6–¥2.5 million per tsubo. This article uses two cases, ¥2 million and ¥2.5 million per tsubo (Stage 1). Then, referring to Turner & Townsend’s construction cost forecast (published July 2026, with Sapporo inflation of +5.6% in 2026 and a nationwide decline expected in 2027), this article assumes that increases of around 5% per year continue, envisions a 2028 construction start and 2029 opening, and factors in increases over the construction period (Stage 2).

After factoring in inflation, the required ADR ranges from ¥64,300 (¥2 million per tsubo, 7% yield) to ¥90,800 (¥2.5 million per tsubo, 8% yield). The only operating property within 2km at this level is the 26-room chalet-style property, and the range is 2–3 times the ¥29,800 median of the band with fewer than 30 rooms. Making a new 20-room build work in Jozankei therefore means capturing the same price range as the top property within 2km from scratch, a heavy pricing assumption. Rising construction costs also act to restrain new supply. This cost level lies behind the flat room stock within 2km from 2017 to 2026, and for existing properties it offers an upside in the form of a stable competitive environment.

Set side by side, the two scenarios suggest an order for reinvestment in Jozankei. Properties with large buildings can, as Suirei did, convert upper floors or a wing into high-rate rooms and raise the guest experience through common areas such as main baths and saunas. A new 20-room build should be considered only where an on-site extension at an existing ryokan can share land and common areas and so compress construction cost. The thin “50–150 rooms × ¥30,000–¥50,000” zone (currently just 2 properties in the 50-room range) is more naturally filled by partial conversion of existing large properties than by new builds, so funds and operators looking for acquisition targets should consider large properties with renovation potential or mid-size ryokan with land for extension. Our analysis of the 3,574 rooms at Kinugawa and Kawaji Onsen, which sets out who is driving revitalization and the rate headroom in a hot spring area dominated by large ryokan, offers material for testing the same questions in another market.

Investment Summary — Sensitivity and Risk

Next we test the sensitivity of Scenario A. With Capex of ¥12 million per room and a 10% yield, the required ADR uplift as OCC and flow-through vary is as follows. Even under the harsh combination of OCC falling to 60% and flow-through of just 60%, the required uplift stays under ¥10,000 and the resulting level does not exceed the mid-size band’s median. The pricing conditions for a renovation investment are met with a considerable margin.

Finally, the next steps. For those considering acquisition or revitalization, the priorities are, first, the renovation potential of large properties with more than 100 rooms (which floors to convert, when main baths and saunas are due for replacement, and confirmation of zoning and zone designations); second, mid-size ryokan with land for extension; and third, new builds. For Hokkaido’s regional banks and operators, the fact that post-renovation ADR is backed by actual rates in the neighboring size band provides grounds for lending and operating plans. In Jozankei, with its strong winter peak and late demand, a seasonal design that schedules renovation periods for the June–September trough should also help protect revenue.