HotelBank has already covered Oita Prefecture from the angle of demand and pricing design: inventory pickup for September stays, booking curves by property type for Saturday, October 3, and the meal premium charged for breakfast and dinner. This article takes a different approach. It is not about how bookings are progressing, but a “static map” of where rooms sit across the prefecture’s 18 municipalities and what they sell for. It is the Oita edition of our prefecture-by-prefecture investment map series, which has so far covered Ishikawa, Toyama, Yamaguchi, Nara, Nagasaki, Wakayama, Niigata, Ehime, Mie, Fukui, Iwate, Kumamoto, Kagoshima, Ibaraki and Yamanashi. It is also the first investment map we have published with Oita as its subject.

The conclusion first. Oita’s lodging market is three completely different markets sharing one prefecture. Yufu City (small, high-rate) has an estimated contracted ADR of ¥23,436 and 7.5 rooms per property. Beppu City (mid-rate, high-volume) is at ¥15,406 with 8,467 rooms, one of the largest room stocks in Kyushu. Oita City (large, business-demand boxes) is at ¥7,043 with 63.0 rooms per property. These three cities account for 72.5% of the prefecture’s daily revenue potential. For investors, the opportunity lies in the “boxes not yet built” within each of these three structures: specifically, 100-room upper-midscale hotels in Beppu, mid-sized products in Yufuin, and the above-¥10,000 band in Oita City. We test this using estimated contracted ADR for all 18 municipalities, the size distribution of a property master covering 1,316 properties and 26,382 rooms, rate observations for 169 properties, estimated OCC in the peak month, and five years of new openings.

Executive Summary — 18 Municipalities, a 5.1x Spread in Rates

Let us first pin down the overall picture in numbers. The lodging property master that MetroEngines Research & Consulting tracks for Oita Prefecture contains 1,316 properties and 26,382 rooms (those whose municipality could be identified from their address). Calculating estimated contracted ADR from the properties with observable OTA prices, the prefecture-wide average for the latest 12 months is ¥14,784 (September 2025 to August 2026, monthly sample N=436–470 properties), +3.5% from ¥14,282 a year earlier.

This prefecture average is the highest of Kyushu’s seven prefectures. On the same 12 months and the same estimated contracted ADR basis, Oita’s ¥14,784 is followed by Saga at ¥12,173 (N=145–157 properties), Fukuoka at ¥11,733 (N=460–476), Kumamoto at ¥10,685 (N=366–401), Nagasaki at ¥7,957 (N=249–258), Miyazaki at ¥7,055 (N=158–169) and Kagoshima at ¥6,980 (N=300–322). That is 1.21x second-place Saga and 2.12x last-place Kagoshima. That Oita outranks Fukuoka, home to Kyushu’s largest metropolitan area, shows how unusual its lodging market is. The reason is simple: a large share of Oita’s room stock is onsen ryokan. Of the 1,316 properties in the master, 507 (38.5%) are ryokan, far outnumbering the 134 business hotels and 15 city hotels. Taking the 12-month average estimated contracted ADR by property type, ryokan are at ¥18,265 (N=321 properties) and resort hotels at ¥18,862 (N=41), versus ¥6,642 for business hotels (N=93) and ¥9,988 for city hotels (N=15). There is a step of roughly 2.8x between onsen-oriented and business-oriented properties. A single prefecture average blends these two different markets together. That is why we need to break it down by municipality.

18-Municipality Matrix — Rate Tier × Supply × Property Size

The table below is the core of this article. For each municipality, it lists estimated contracted ADR (12-month average), listed price (all-plan average, for reference), number of properties and rooms, rooms per property, the share of ryokan, estimated OCC in the peak month, and the RevPAR and daily revenue potential derived from them. Tiers are based on estimated contracted ADR: T1 = above ¥14,000 (onsen brand band), T2 = ¥8,000–14,000 (mid-tier leisure band), T3 = below ¥8,000 (business and local-demand band).

Here is what the table shows, point by point.

First, the rate peak is in Yufu City, not Beppu. Yufu City’s estimated contracted ADR is ¥23,436: 1.40x second-ranked Kokonoe Town (¥16,700) and 1.52x Beppu City (¥15,406). On a listed-price basis (all-plan average) it reaches ¥45,476, the only municipality in the prefecture above ¥40,000. Yufuin Onsen, sometimes called “the Karuizawa of Kyushu,” is known as a cluster of high-end ryokan, and that reputation shows up clearly in actual OTA prices. Compared with onsen towns of similar standing across the prefectural border, the effective rate gap between Kurokawa Onsen and Yufuin had narrowed to ¥665 under the Kyushu travel subsidy (Kyushu Ouen-wari).

Second, rate and supply move in opposite directions. Yufu City counts 359 properties but only 2,683 rooms, or 7.5 rooms per property. Beppu City has 312 properties and 8,467 rooms, or 27.1 rooms per property. Oita City has 107 properties and 6,743 rooms, or 63.0 rooms per property. Rooms per property differ by 8.4x within the same prefecture. Yufuin is “a cluster of small inns,” Beppu is “a dense concentration of mid-sized onsen hotels,” and Oita City is “a cluster of large business hotels”: entirely different industry structures.

Third, occupancy alone does not tell these markets apart. Estimated OCC in August 2026 (the peak month) was 92.9% in Kokonoe Town, 92.3% in Nakatsu City and 91.4% in Taketa City. High-rate onsen towns and low-rate business locations alike sit around 90%. In the peak month, occupancy in every municipality is close to its ceiling. What separates the municipalities is rate, not occupancy. This matters for investment decisions: upside comes not from adding occupancy but only from how rates and room counts are designed.

Re-ranking by Market Size — Beppu 39.4%, Top 3 Cities 72.5%

A rate ranking gives investors only half the picture. Rate alone does not tell you whether Yufu City at ¥23,436 or Beppu City at ¥15,406 is the bigger market. You have to multiply by room stock.

So we calculated daily revenue potential, “rooms × RevPAR,” for each municipality. The ranking changes substantially from the rate ranking. Beppu City comes first at ¥115.2 million per day, 39.4% of the prefecture total (¥292.1 million). Yufu City is second at ¥54.0 million (18.5%) and Oita City third at ¥42.7 million (14.6%). These three cities make up 72.5%. Kokonoe Town follows with ¥21.5 million (7.4%) and Hita City with ¥18.2 million (6.2%); the remaining 13 municipalities combined account for only 11.4%.

When funds or regional banks look for investment opportunities in Oita, the practical target area narrows to three cities: Beppu, Yufuin and Oita City. Kokonoe Town and Hita City form a second group, and everywhere else is a matter of judging individual deals on their own merits.

Inside the Three Markets — Broken Down by Room Count × Rate Band

Now we go down to individual properties. For the 169 properties and 14,027 rooms with 20 or more rooms and estimated contracted ADR observed for 12 consecutive months, we cross-tabulated room-count bands against rate bands. Small inns with fewer than 20 rooms are excluded: they are numerous, their rates vary widely, and they are rarely investment targets.

Beppu City fills every cell of the 5×5 grid except three. No other onsen destination in Kyushu covers such a wide range of price and size bands at once. The gap is in the lower right: the 100+ rooms × above ¥20,000 cells. One 791-room property above 200 rooms sits in the ¥20,000–30,000 band, but in the 100–199 room band the ceiling is 161 rooms at ¥13,000–20,000, with nothing above. Above ¥30,000 there are only 309 rooms across all size bands (all in the 30–99 room bands).

Oita City, by contrast, packs almost everything into the left third of the grid. Of its 4,209 rooms, 3,271 (77.7%) are below ¥9,000 in estimated contracted ADR, and above ¥13,000 there is just one property with 190 rooms (4.5%). Although it is the prefectural capital, it ranks 14th in the prefecture on rate.

Yufu City raises a different issue from the other two cities. Only 14 properties with 610 rooms have 20 or more rooms, just 22.7% of the city’s 2,683-room stock. There is not a single property with 100 or more rooms. The 20–49 room band has 9 properties with 292 rooms, and the 50–99 room band has 4 properties with 287 rooms. Rates are high, but properties are small, so each deal is small too. This structure is why deals large enough for fund ticket sizes in the prefecture are concentrated in Beppu and Oita City.

Supply Gaps — Three White Spaces

None of these three gaps exists “because there is no demand.” Two pieces of evidence support the demand side.

The first is occupancy. Estimated OCC in August 2026 was 88.3% in Beppu City (N=169 properties / 5,938 rooms), 85.9% in Yufu City (N=190 properties / 1,897 rooms) and 89.9% in Oita City (N=42 properties / 4,658 rooms). It is the peak month, but all three are effectively at full-house levels. The second is rate growth. Prefecture-wide estimated contracted ADR rose 3.5% YoY, and during the winter onsen season rates ran at around ¥16,000–17,000 or higher for three straight months: ¥16,436 in November 2025, ¥17,297 in December and ¥17,261 in January 2026. The track record of existing stock shows that rates have room to rise.

Supply Pipeline — 193 Properties and 2,478 Rooms in 5 Years, Shrinking to 12.8 Rooms on Average

Even if a gap exists, the investment opportunity shrinks if supply aimed at it is already underway. We checked new openings over the past five years.

Over five years, 193 properties with 2,478 rooms entered the market, equal to 9.4% of the existing 26,382-room stock. On the numbers alone that is not small, but as the 12.8-room average shows, it is overwhelmingly small-format product: whole-house rentals, small ryokan, glamping and villas (for example, Beppu Hontei, a whole-house rental in Beppu that opened in 2026 and accommodates up to three families). Only one project per year exceeded 100 rooms, five in five years.

Moreover, those five projects (177 rooms in front of Beppu Station, 269 rooms in Beppu, 239 rooms in Oita City, 255 rooms in front of Oita Station and 161 rooms in Beppu) are all limited-service or mid-tier resort products in terms of rate band. Over these five years, not one project competed directly with WS1 (100-room hotels above ¥20,000 in Beppu) or WS2 (above ¥13,000 in Oita City).

Looking ahead: in Yufu City, a hotel with 39 rooms, all with private hot-spring baths, is scheduled to open in April 2027, with the top room categories featuring a private sauna and outdoor pool (FHG hotels, “seven x seven Yufuin,” press release of September 2, 2026). This project partly addresses WS3 (mid-sized, high-rate product in Yufuin), but at 39 rooms it will not significantly change Yufuin’s existing structure as “a cluster of small, high-rate properties.” It is reasonable to expect Oita’s supply pipeline to keep flowing toward small, high-rate product for the time being.

Investment Environment — Beppu Station Area Posts Kyushu’s Top Land Value Gain; Listed REITs Own 3 Properties with 695 Rooms

From a land acquisition standpoint, hotel sites in Oita are clearly in a rising phase. In the 2026 roadside land prices (rosenka), Ekimae-dori in Ekimae-machi, Beppu, reached ¥135,000 per ㎡, up 17.4% year over year, the highest rate of increase among Kyushu’s seven prefectures. Continued hotel openings and retail development nearby are cited as the drivers (TOS Online, July 1, 2026). On a published land price basis, Beppu City’s 2025 average was ¥52,862/㎡ (+1.98% YoY) and the average benchmark land price for commercial land was ¥81,830/㎡ (+4.60%). Yufu City’s average land price was ¥67,100/㎡ (+3.07%), second in the prefecture.

Let us also check listed hotel REIT holdings. Three properties with 695 rooms in Oita Prefecture are held by listed REITs, all by Invincible Investment Corporation (8963).

Acquisition price per room is ¥27.55 million for Kamenoi Hotel Beppu, ¥24.05 million for ART HOTEL Oita and ¥11.06 million for Hotel MyStays Oita. Because they were acquired at different times, a direct comparison is not possible, but the most recent deal, ART HOTEL Oita acquired in 2024, at ¥24.05 million per room offers one benchmark for acquiring an existing hotel of over 100 rooms in Oita.

Invincible’s reported operating results for July 2026 across its 101 domestic hotels were OCC of 86.3% (+1.9pt YoY), ADR of ¥15,100 (−1.0%) and RevPAR of ¥13,039 (+1.2%). These are nationwide portfolio figures, not Oita-specific results, but they reflect a recent trend in regional cities: occupancy rising while rates stay flat, in a portfolio centered on limited-service hotels.

Development and Repositioning Scenarios — Repositioning Existing Stock Beats New Builds on Yield

Building on the structure above, we modeled four scenarios in Beppu City: three new builds and one acquisition and repositioning of an existing onsen ryokan. Land cost uses Beppu City’s average benchmark land price for commercial land of ¥81,830/㎡. Construction costs use assumed unit costs by property type that reflect recent increases in construction costs. GOP (Gross Operating Profit) is total revenue from rooms, food and beverage, etc., minus direct operating costs such as labor, cost of sales and utilities. It excludes depreciation, interest, rent and property tax. GOP yield is GOP divided by total investment: a measure of the business’s own earning power before financing terms, depreciation and taxes.

Here is how to read it.

Among the three new builds, limited-service (A) has the highest yield. Its construction cost is lowest and its GOP margin is high. However, the sub-¥9,000 band that A targets is also the most crowded in Beppu City (4 properties with 631 rooms of 100+ room scale already sit in that band). Upper-midscale (B) yields slightly less than A, but there is currently no directly competing property at 100–199 rooms above ¥20,000. How to weigh the 0.8pt yield gap against the difference in competitive environment and rate upside is the core of the WS1 investment decision.

Small luxury (C) has the lowest yield in Beppu City. High-specification construction costs weigh heavily, and at 50 rooms fixed costs are hard to absorb. That said, this assumes an ADR of ¥35,000 in Beppu; in Yufu City the same product might achieve higher rates. Yufu City’s above-¥30,000 band actually contains 7 properties with 333 rooms.

The highest yield comes not from a new build but from repositioning an existing onsen ryokan (D). Assuming a 60-room ryokan acquired at ¥6 million per room, ¥7 million per room spent renovating rooms, baths and dining, and estimated contracted ADR raised from ¥9,000 to ¥15,000, the GOP yield is 12.8% (11.7% after inflation). Total investment of ¥780 million is one-quarter to one-fifth of the new-build scenarios and fits the ticket sizes of regional banks and mid-sized funds.

Beppu City has 8,467 onsen rooms, among the most in Kyushu, and within the 61 observed properties with 20+ rooms (5,160 rooms), 1,133 rooms sit below ¥9,000 in estimated contracted ADR. The upside of lifting this band to ¥13,000–20,000 is the most realistic investment opportunity in Oita; that is what this article’s data shows. Existing properties already have hot-spring rights, locations and a track record of attracting guests. Layering room specifications and pricing design on top of that can reach yields that new builds cannot.

Viewed on these two axes, the decision criterion for WS1 becomes clear. Scenario B only catches up with Scenario A (limited-service, 7.4% GOP yield) at an estimated contracted ADR of ¥19,000 with occupancy of 80% or more, or ¥18,000 with 88% occupancy. The base case of ¥17,000 × 80% stays at 6.6%, and a downside to ¥15,000 × 72% drops it to 5.2%. In other words, WS1 is not a case of “fill the gap and win.” The condition for success is whether a hotel in Beppu’s 100–199 room band can clearly break through the current ceiling of ¥13,000–20,000 and hold rates around ¥19,000 year-round. The 7 properties with 333 rooms above ¥30,000 in Yufu City show that higher rates exist in the prefecture, but that track record is for small, high-rate products; whether a 100-room hotel can achieve the same rate is a separate question. Conversely, if a brand and operating setup that meets these conditions can be secured, the absence of direct competitors is a significant entry advantage.

Conclusion — Oita’s Upside Lies in “Lifting Up” More Than “Building New”

Mapping Oita’s lodging market by municipal rate tier and supply comes down to three points.

1. There are three separate markets in the prefecture. Yufu City (estimated contracted ADR ¥23,436, 7.5 rooms per property), Beppu City (¥15,406, 27.1 rooms per property, 8,467 rooms) and Oita City (¥7,043, 63.0 rooms per property). Rates differ by 5.1x and rooms per property by 8.4x. Describing the market with a single prefecture average is meaningless.

2. Market size is concentrated in Beppu. Measured as daily revenue potential (room stock × RevPAR), Beppu City accounts for 39.4% of the prefecture, followed by Yufu City at 18.5% and Oita City at 14.6%. The top three cities make up 72.5%. In practice, the search for investment opportunities narrows to these three cities.

3. Supply gaps are in the “upper bands.” 100-room hotels above ¥20,000 in Beppu, above ¥13,000 in Oita City, and mid-sized high-rate product in Yufuin: in each case demand-side occupancy is around 90%, yet no product is in place. And the 193 properties opened over the past five years average just 12.8 rooms, so no supply is heading into these gaps.

As for investment approach, repositioning existing stock clearly beats new builds on yield. Among Beppu City’s observed properties with 20+ rooms, 1,133 rooms sit below ¥9,000 in estimated contracted ADR. A plan to lift these rooms into the ¥13,000–20,000 band models out at a GOP yield of 12.8% on total investment of around ¥780 million (11.7% after inflation, 10.8% in the most conservative case). For operators seeking onsen ryokan turnaround deals in Kyushu, Oita is one of the few areas that combines all three conditions: deep stock, rate upside and occupancy support.