In November 2025, local media reported that Peace Kikaku (ピース企画), a Naha-based lodging company, plans a 9-story, roughly 140-room hotel with a natural hot spring (onsen) on the former fire station site in Agarie, Nago City. The site is a public plot of about 5,089㎡ that the city bought back in February 2024 and put out to tender a second time, and completion is targeted for as early as FY2027. Starting from this single project, this article layers the room stock within a 1km and 3km radius, the estimated settled ADR of Nago City and each northern resort area, zoning, land prices and tsunami inundation assumptions, and the surrounding resident and working population, to quantify which price band of the northern Okinawa market an onsen-equipped urban hotel in central Nago would serve.

The room stock in this article covers lodging facilities with 10 or more rooms (excluding leisure/love hotels) within a 1,000m radius of the former Nago City fire station site. “Operating” means a property whose selling price was confirmed on major booking sites in the most recent 3 months (August–October 2026) (as of October 28, 2026; compiled by MetroEngines Research).

Conclusion — An Onsen Edge on the Urban Price Band That Sits “Below” the Northern Resorts

We put the conclusion first. Central Nago’s lodging market posted an estimated settled ADR of ¥11,400 in September 2026 (N=25 properties), far below the northern resort areas of Motobu Town at ¥15,000 (N=22), Onna Village at ¥21,900 (N=44) and Nakijin Village at ¥40,400 (N=21), and close to Naha City’s ¥9,700 (N=144). In other words, although downtown Nago is the gateway to northern Okinawa tourism, in price terms it is an urban business-hotel market. It has absorbed demand from guests who do not stay at resorts: business trips, sports training camps, spring-training spectators and travelers using it as a stopover on a touring route.

That price band, however, rose 16.2% in one year. Year-over-year growth from January to June ran in double digits, from +12.6% to +58.8%, with only July and August turning negative. This looks like a summer pullback after the demand spike right after JUNGLIA Okinawa opened on July 25, 2025, but the lift in the off-season more than offsets it. Within a 1km radius of the site there are 11 operating properties with 694 rooms, 2.7 times the 255 rooms of 2017, nine years ago. After two properties with 293 rooms were added at once in 2020, there was little new supply, with only 43 rooms added in 2026. Now this project’s 140 rooms and a 156-room hotel under construction in Bimata, about 2.7km to the north (opening scheduled for July 2027), arrive on top of that.

The investment decision comes down to three points. First, if the hotel can capture the ¥12,000–¥15,000 range with its onsen, it fills the empty price band between the existing level in downtown Nago (operating properties within 1km show trailing 12-month medians of ¥6,200–¥10,200) and the resort floor (Motobu Town at ¥15,000). Second, the site is zoned neighborhood commercial with a 200% floor area ratio and 80% building coverage, which allows 9 stories, but Okinawa Prefecture’s tsunami inundation assumption places it in the 5m-to-under-10m depth zone, and its landform is classified as “reclaimed land (very prone to liquefaction)”. Third, the public land sale requires construction to start within 1 year of contract and carries a 10-year restriction on changing the business plan or reselling, plus a buyback clause, so the exit is less flexible than on ordinary private land. We examine each in turn below.

Project Outline — Public Land Sold in a Second Tender, and How Much of the Plan Is Public

The former Nago City Fire Station site is city-owned land that was decommissioned when the fire department moved to a new building in August 2017. The city sold it once through a public proposal process on the condition of “a lodging facility, or a lodging and commercial facility, that contributes to creating new vibrancy in the town”, but construction never started and the city bought it back in February 2024. It carried out a sounding-type market survey from July to October 2024 and published the guidelines for a second tender in January 2025. The main conditions are in the table below: the minimum sale price was ¥424,347,209, and the sale covered the main station building site and the training tower site, separated by a road, as a single package.

Public information on the plan itself is limited to press reports. The Okinawa Times (November 20, 2025) reported that lodging company Peace Kikaku plans to build a 9-story, roughly 140-room hotel with a natural hot spring on the site, aiming to open in FY2027, and noted that the plot of about 5,000㎡ was sold by the city in October of that year. The Ryukyu Shimpo (same day) also reported plans for a hotel and onsen facility, aiming for completion as early as FY2027. The sale price, total project cost and room mix are behind paywalls and could not be confirmed for this article, so we state clearly that the estimates below are based on public information and our own assumptions, not on the developer’s plan figures. The company already operates Hotel Peace Island Nago (138 rooms, opened 2020) about 200m from the site, so this project would place a second, onsen-equipped building right next to it.

Also in Nago City, Sun Frontier Hotel Management is building “Hiyori Hotel Okinawa Nago” at 876-1 Bimata (RC, 9 stories, 156 rooms planned, large bath with artificial hot spring, opening scheduled for July 2027, groundbreaking on August 27, 2025), and Courtyard by Marriott Okinawa Resort (170 rooms) opened in Kise on June 15, 2026. Including this project’s 140 rooms, 509 rooms will be added in Nago City over FY2026–2027.

Location — A Neighborhood Commercial Plot Between Route 58 and Nago Bay; Land Prices +7.1% in 3 Years

The site sits between National Route 58 and Nago Bay, a location the city’s guidelines describe as one where “commercial and lodging facilities cluster along the national highway, close to the city center.” Querying the area in the MLIT Real Estate Information Library shows the main station site is zoned neighborhood commercial (200% floor area ratio, 80% building coverage) within a city planning area, so a 9-story lodging facility works in terms of both permitted use and floor area. The nearest official land price point, “Nago 5-2” (4-chome Agarie, about 120m from the site), went from ¥69,100/㎡ in 2024 to ¥70,300 in 2025 (+1.7%) and ¥74,000 in 2026 (+5.3%), so growth is accelerating. Dividing the city’s minimum sale price by the surveyed area gives about ¥83,400/㎡, roughly 13% above this official price point.

Disaster exposure is the first thing investors check. Under Okinawa Prefecture’s tsunami inundation assumption (2016, included in the National Land Numerical Information), the site falls in the 5m-to-under-10m depth zone, with the boundary of the 2m-to-under-5m zone about 10m to the north. All 11 operating properties within 1km also stand in zones assumed at 2m or more (4 of them, including Green Rich Hotel Okinawa Nago and Adan Hotel, in the same 5m-to-under-10m zone as the site), so in this part of town it is treated as a baseline condition, not an exception. The landform is classified as “reclaimed land” with a liquefaction tendency of “very prone to liquefaction”. The site is not in a flood inundation zone or a sediment disaster warning zone; the nearest sediment disaster warning zone is about 380m away. A 9-story plan is large enough to build vertical evacuation to upper floors and the placement of baths and machine rooms into the design from the start. How many resort rooms along Nago Bay and down to Onna Village overlap inundation zones, and what BCP investment costs per room, is tallied in Okinawa West Coast: 40% of Resort Rooms in Tsunami Zone.

Room Stock Within 1km and 3km — From 255 Rooms in 2017 to 694 in 2026, Stalled Since 2020

Tracing supply year by year, operating rooms within a 1km radius rose in small steps from 255 rooms at 4 properties in 2017 to 341 in 2018 and 355 in 2019, then jumped to 628 in 2020 when Green Rich Hotel Okinawa Nago (155 rooms) and Hotel Peace Island Nago (138 rooms) opened. It then stopped at 651 in 2021, and with Kangen Hotel Nago Agarie (43 rooms) added in 2026 now stands at 694 rooms across 11 properties. The 3km radius shows the same pattern: 594 rooms at 9 properties in 2017, 978 rooms at 15 in 2020 and 1,092 rooms at 19 in 2026, with most of the increase in place by 2020. Put simply, lodging supply in downtown Nago stepped up once with two buildings in 2020, ahead of the JUNGLIA opening, then stayed almost flat for five years. This project’s 140 rooms and Hiyori Hotel’s 156 rooms in FY2026–2027 form the second step.

Listings show 810 rooms at 14 properties within 1km and 1,332 rooms at 24 properties within 3km, but the operating properties whose selling prices we observed in the last 3 months number 694 rooms at 11 properties within 1km and 1,064 rooms at 18 properties within 3km. By segment, 599 of the 694 operating rooms within 1km (86%) are business hotels and 95 are hostels; even widening to 3km, the only resort hotel is Hotel Yugaf Inn Okinawa (121 rooms, opened 1989). By size, the three properties with 101–200 rooms hold 440 rooms, 63% of operating rooms within 1km. This project’s 140 rooms falls into the same size class as those three, and differs from them only in having an onsen.

The table below lists the 18 operating properties within 3km. The ADR column is each property’s trailing 12-month (October 2025–September 2026) median estimated settled ADR, shown only for segments where the estimate holds (business and resort). The three core properties within 1km sit at ¥8,700–¥10,200 and the smaller ones at ¥6,200–¥8,600. Only two exceed ¥10,000, Green Rich Hotel Okinawa Nago (¥10,200) and UNTEN INN (20 rooms, opened 2025) at ¥10,500, and none exceed ¥11,000.

Price Band — Nago City at ¥11,400 Is 76% of Motobu and 52% of Onna. The Gap an Onsen Urban Hotel Can Fill

Ranking northern Okinawa’s lodging markets by estimated settled ADR for September 2026 gives Nakijin Village ¥40,400 (N=21), Onna Village ¥21,900 (N=44), Motobu Town ¥15,000 (N=22), Nago City ¥11,400 (N=25) and Naha City ¥9,700 (N=144). Nakijin is dominated by villa-type properties around Kouri Island, and with N=21 its median tends to come out high, so it needs caution; even setting it aside, downtown Nago is only 76% of Motobu Town and 52% of Onna Village. Year over year, Nago City rose +16.2%, Motobu Town +14.3%, Onna Village +9.2%, Nakijin Village +7.9%, Naha City +8.6% and Okinawa Prefecture as a whole +10.0% (N=515), so Nago City posted the highest growth among the northern areas compared and Naha City. For background on price formation across northern areas and the moves of the official partner hotels after JUNGLIA opened, see our earlier analysis of the northern resort market after JUNGLIA Okinawa’s opening.

Overlaying Nago City’s monthly series year by year brings the seasonality into focus. In 2026, February was the annual peak at ¥15,600, followed by January at ¥12,500 and August at ¥12,500. The February peak falls in the professional baseball spring training season, up 34.0% from ¥11,600 in February 2025. Year-over-year changes from January were +58.8% (Jan), +34.0% (Feb), +23.1% (Mar), +21.2% (Apr), +12.7% (May), +12.6% (Jun), -2.8% (Jul), -10.2% (Aug) and +16.2% (Sep); the July–August declines read as a pullback after downtown Nago rates jumped first right after JUNGLIA opened on July 25, 2025. October onward is estimated from listed levels at the time of the survey, and February 2027 already shows a peak similar to the prior year at ¥15,400 (N=20).

The next scatter plot breaks this price structure down to individual properties. With room count on the horizontal axis and 12-month median estimated settled ADR on the vertical axis, operating properties within 3km split into two clusters, apart from the 20-room UNTEN INN (¥10,500): “53 rooms or fewer × ¥6,200–¥8,600” and “79–155 rooms × ¥8,100–¥10,200”. No property with more than 100 rooms exceeds ¥11,000. If this project uses its onsen to go after the ¥12,000–¥15,000 band, the space above the dotted line at 140 rooms is empty, and it would also stop just short of the Motobu resort floor (¥15,000). The positioning of combining urban convenience with an onsen in place of resort pricing holds up in the numbers too.

Demand — Prefectural Business Hotel Occupancy 86.7%, JUNGLIA in Year Two, 13,800 Residents Within 1.5km

We check demand on three layers. First, occupancy based on OTA listed inventory: Okinawa Prefecture’s business hotels (132–135 properties / 12,490–12,746 rooms, based on major booking-site listings) ran 90.7% in July 2026, 84.7% in August and 86.7% in September, and resort hotels (174–184 properties / 16,351–16,683 rooms) 90.3%, 87.2% and 87.7%, holding high levels from summer into autumn. August’s dip coincides with a month of repeated flight cancellations as Typhoons No. 13 and No. 18 approached. Looking at booking pace for September, the prefecture’s business hotels (fixed cohort of 138 properties / 12,884 rooms) had 61.0% of inventory absorbed 45 days before arrival, 77.9% at 14 days and 86.7% on the day before arrival, compared with 64.6% → 77.1% → 86.7% for all properties (898 properties / 37,118 rooms): a slower start that catches up at the last minute. Urban hotels rely relatively more on last-minute demand, and an onsen as a “reason to stay” has room to pull bookings earlier.

Second, regional visitor numbers. Okinawa Prefecture’s inbound tourist arrivals grew early in the year, at 835,800 in January 2026 (+6.7% YoY), 860,200 in February (+10.1%) and 978,300 in March (+7.2%), paused at 832,500 in May (−1.2%) and 805,700 in June (−4.0%), then reached 963,900 in July (+1.7%), a record for the month of July, before typhoons pushed August down to 923,900 (−14.0%). As for JUNGLIA Okinawa, which drives northern demand, the operator said at a July 25, 2026 press conference that it expects 1 million visitors and over ¥10 billion in sales for its first year, and reports say growth slowed in the second half after 650,000 visitors at the six-month mark. Where second-year attendance settles overlaps with this project’s opening (FY2027), so whether downtown Nago’s ADR can hold in the ¥10,000s rather than fall back to pre-JUNGLIA levels (¥7,500–¥8,100 in January–June 2025, excluding February) is the watershed for the financial assumptions.

Third, the local catchment. Based on the National Land Numerical Information 250m mesh estimates, the resident population within a 1.5km radius of the site was 13,697 in 2020 and 13,842 in 2025, projected at 13,239 in 2040, a decline of 3.3% from 2020 that is mild for northern Okinawa Island. The share aged 65 and over is 26.1% and the working-age share is 59.4%. On the employment side, the Economic Census (2021) shows 702 establishments and 4,570 employees within a 1km radius, with office-type businesses at 10.9%, so business-trip demand is not as deep as in Naha’s central business district. Occupancy at urban hotels here rests more on pass-through demand from tourism, sports and touring than on residents or workers, and whether the onsen can capture day-use visits as local demand will shape non-room revenue.

Development Scenarios — Total Investment ¥4.6–4.9 Billion for 140 Rooms With Onsen; Simple Yield on Room Revenue Alone of 3–5%

We run a simple estimate on assumptions that public information supports. Total floor area is set at the floor area ratio cap of the main station site (2,720.42㎡ × 200% = about 5,441㎡, about 1,646 tsubo); for 140 rooms that is about 39㎡ of floor area per room, consistent with a typical business hotel layout including an onsen and baths. Construction cost starts from the 2025 national average for “hotels or ryokan” in MLIT’s Building Construction Statistics, ¥2.178 million per tsubo, and adds construction-period inflation (Turner & Townsend forecasts: half a year each of +5.3% for 2026 and +5.0% for 2027, about 8% in total) to reach about ¥2.35 million per tsubo as the upper-end assumption. Hot spring drilling and bath equipment have no public figures, so we provisionally set ¥200 million, and design and other costs at 10% of construction cost. Because the actual sale price could not be confirmed, land uses the city’s minimum sale price of ¥424 million as a floor.

On the revenue side we use room revenue only, as 140 rooms × ADR × occupancy × 365 days, and set the GOP margin at a conservative 40%, below the industry benchmark for limited-service hotels (50–60%). Onsen operating costs and day-use revenue are assumed to offset and are not included. From the price band analysis in the previous section, we set three ADR scenarios: A “downtown business level” at ¥10,000, B “onsen-equipped urban” at ¥12,500 and C “northern resort floor” at ¥15,000.

On room revenue alone, the results fall in a 3.4–5.0% range. These are conservative figures that apply a construction unit cost toward the top of the national average and set non-room revenue to zero, and several factors could add to them: onsen day-use and food and beverage, the investment tax credit for Tourism Zone Promotion Areas (under the Act on Special Measures for the Promotion and Development of Okinawa), rate uplift from a rising share of inbound guests, and the effect of soaring construction costs themselves in holding back new supply and easing competition with existing properties. Conversely, on sensitivity, starting from Scenario B, a 10% drop in ADR brings the yield to 3.8%, a 5pt drop in occupancy to 3.9%, and both together to 3.5%. Whether the hotel can achieve ¥12,500 with its onsen is the single biggest variable in this project’s economics (for the tax credit extension request and its effect on yields, see Okinawa Tourism Zone Tax Credit Extension: +0.1–0.3pt IRR for Hotels).

In addition to the one-way sensitivity, the table below moves ADR and occupancy together. The assumptions are the same as above (total investment ¥4.88B, 40% GOP margin, room revenue only), and the bold cell is Scenario B (ADR ¥12,500, 80% occupancy). If ADR falls to ¥11,250 and occupancy to 75%, the yield drops to 3.5%; if the onsen premium delivers ADR ¥13,750 and 85% occupancy, it reaches 4.9%. Even for the same building, the combination of ADR and occupancy moves the yield by 1.4pt or more.

What It Means for Developers, Local Governments and Lenders

For developers, this project shows that even in an urban location that cannot reach northern resort pricing, building around an onsen and a large bath can target an empty ¥12,000–¥15,000 band. In downtown Nago, only two properties exceed ¥10,000, Green Rich Hotel Okinawa Nago (155 rooms, ¥10,200) and the small UNTEN INN (¥10,500), and none within 3km exceed ¥11,000. Having the company’s existing hotel within 200m also makes it possible to share sales, housekeeping and front desk operations and to split demand between two buildings at different price points.

For local government officers handling public land, this is a valuable reference: a city bought back land it had sold, re-tendered it, secured business continuity through a lodging/commercial use requirement and a 10-year buyback clause, and a private company proposed an onsen-equipped lodging facility. The tender drew bids even with the minimum sale price set a little over 10% above the nearby official land price, backed by downtown supply that had been stalled for five years since 2020 and a city-wide estimated settled ADR that rose 16% in a year.

For regional banks and Okinawa’s lenders, the issue shifts to how to factor the physical conditions, a 5–10m tsunami inundation zone and reclaimed land with a high liquefaction tendency, into collateral valuation and BCP requirements. Since the three existing large properties also all sit in zones assumed at 2m or more, this is an unavoidable premise for any lodging loan in downtown Nago. A realistic response is to require upper-floor placement of power equipment and water tanks, insurance coverage conditions, and stress scenarios that build the number of closure days during typhoons and tsunamis into the financials.

Summary

The 9-story, roughly 140-room onsen hotel planned for the former fire station site in Agarie, Nago City, would restart supply in downtown Nago, which had been almost frozen for five years after operating rooms within a 1km radius grew 2.7x from 255 in 2017 to 694 in 2026. Nago City’s estimated settled ADR was ¥11,400 in September 2026, up 16.2% YoY, the fastest growth in the north, yet its level is only 76% of Motobu Town and 52% of Onna Village, and the ¥12,000–¥15,000 band that an onsen-equipped urban hotel targets has no existing example within 3km. The building works under neighborhood commercial zoning with a 200% floor area ratio, while the 5–10m tsunami inundation zone and liquefaction-prone reclaimed land are preconditions for both design and financing. The simple yield on room revenue alone is 3–5%, with onsen day-use, tax credits and JUNGLIA’s second-year demand as potential upside. Tracking whether downtown Nago rates can hold in the ¥10,000s through the FY2027 opening, using monthly estimated settled ADR, is the next task shared by the developers, local governments and lenders involved in this area.

Frequently Asked Questions

Q. What is the scale and timing of the hotel plan in Agarie, Nago City?
According to press reports (Okinawa Times and Ryukyu Shimpo, November 20, 2025), Peace Kikaku plans a 9-story, roughly 140-room hotel with a natural hot spring on the former fire station site, aiming for completion as early as FY2027. The sale price and total project cost could not be confirmed for this article.

Q. How do hotel rates in Nago City compare with the northern resorts?
In September 2026, the estimated settled ADR was ¥11,400 in Nago City, versus ¥15,000 in Motobu Town, ¥21,900 in Onna Village and ¥40,400 in Nakijin Village, putting downtown Nago at 76% of Motobu and 52% of Onna. Year over year, Nago City showed the highest growth of these four areas at +16.2%.

Q. How is the site’s disaster risk assessed?
Under Okinawa Prefecture’s tsunami inundation assumption, the site is in the 5m-to-under-10m depth zone, and its landform is reclaimed land with a high liquefaction tendency. It is not in a flood inundation zone or a sediment disaster warning zone. A 9-story plan is large enough to build vertical evacuation to upper floors into the design.