Ranking Shiga’s municipalities by MetroEngines Research’s estimated settled ADR, Otsu City is highest in September 2026 at ¥11,700 (N=32 properties), followed by Nagahama at ¥9,300 (N=23) and Hikone at ¥9,100 (N=21). The prefecture-wide level of ¥8,300 is 58% of Kyoto Prefecture (¥14,200), and the gap is widest in November, when Kyoto peaks for autumn foliage. This article divides Shiga’s municipalities into three tiers — Lakeshore Resort, Castle Town & Heritage, and Southern Business & Industrial — overlays seasonality, estimated occupancy, surrounding population and employment, land prices and flood risk, and then estimates the required ADR for new builds in front of the three main stations.

ADR by Municipality — Otsu Leads; Two Castle Towns Sit at ¥9,000+

Start with the level by municipality. In September 2026, Otsu City’s estimated settled ADR of ¥11,700 was the only one above ¥10,000 among municipalities with 5+ properties, while Nagahama (¥9,300), Moriyama (¥9,200, N=5) and Hikone (¥9,100) lined up in the ¥9,000s. Kusatsu (¥8,500), Koka (¥7,900), Omihachiman (¥7,700), Konan (¥7,400), Takashima (¥7,200) and Higashiomi (¥6,700) followed, so the spread between top and bottom stays within about 1.7x. Setting Kyoto Prefecture’s figure for the same month (¥14,200) as a baseline, even Otsu reaches only 83% of it — every municipality with 5+ properties builds its price band below Kyoto’s typical rate.

Year over year, Takashima rose +15.5%, while Kusatsu fell −15.9% and Nagahama and Omihachiman each fell −10.0%. The comparison month, September 2025, however, overlapped with Expo 2025 Osaka, Kansai (April 13–October 13, 2025), when the prefecture-wide ADR was a high ¥9,200. Against September 2024, two years earlier, the prefecture is up +11.8%, Hikone +28.7%, Koka +20.3%, Otsu +9.2% and Kusatsu +6.9%. In other words, the year-over-year declines largely reflect the high Expo-period base, and are best read as room for each municipality to rebuild its price bands around the post-Expo demand mix.

Three Tiers — The Seasonal Swing Defines the Business Case

Grouping the municipalities into three tiers by the nature of their demand, the differences show up less in rate level than in seasonal swing. Dividing the peak month by the low month of monthly ADR over the last 12 months (October 2025–September 2026), the Lakeshore Resort tier is wide: Otsu 2.00x and Takashima 1.67x. The Castle Town & Heritage tier varies — Hikone 1.64x, Nagahama 1.32x, Omihachiman 1.28x — and the Southern Business & Industrial tier is close to flat, with Kusatsu at 1.37x and Koka at 1.28x. Put differently, the lakeshore tier builds annual revenue on peak-month rates while the southern tier builds it on year-round occupancy, so investment structures differ sharply even within one prefecture.

On occupancy, the prefecture as a whole was at 85.7% in September (109 properties / 6,543 rooms, based on major booking-site listings), level with Kyoto Prefecture’s 84.0% (566 properties / 31,989 rooms). At city level, Nagahama (86.1%) and Takashima (87.2%) are also high: rooms are filling even though rates are around 60% of Kyoto’s. Through the summer, occupancy stepped up toward the lake leisure season — 79.7% in June (113 properties / 6,577 rooms), 83.2% in July (115 / 6,647) and 90.8% in August (101 / 5,614). With occupancy already at a high level, the next lever for revenue growth is rate.

Seasonality and the Gap to Kyoto — 78% in Summer, 37% in Foliage Season

Overlaying the prefecture’s monthly ADR by year, Shiga peaks in August. August 2026 reached ¥10,200, above ¥8,000 in August 2024 and ¥8,600 in August 2025. Spring and autumn peaks are shallow; even November 2025 stayed at ¥9,100. Kyoto Prefecture, by contrast, peaks in April and November, so the ratio between the two moves sharply with the season. Shiga’s ADR divided by Kyoto’s closed to 77.8% in August 2026 but widened to 36.5% in November 2025 and 37.5% in April 2026.

That Shiga’s rates barely move during Kyoto’s peak season is, from an investment standpoint, headroom. When Kyoto city hotels fill at high rates, Otsu — about 10 minutes from Kyoto Station on the JR Biwako Line — and Kusatsu, about 20 minutes away, have room to absorb guests visiting Kyoto. Even so, prices in Shiga stay below 40% of Kyoto’s in those periods. Even at listed levels at the time of the survey, Shiga in November 2026 is at just 43% of Kyoto Prefecture.

Comparing Otsu with Shimogyo Ward, home to Kyoto Station, the ratio is a close 84.2% in September but widens to 57.3% in the November estimate. For Otsu, about 10 minutes from Kyoto Station, there is plenty of room to reflect foliage-season Kyoto demand in its pricing. The gap indicates how much scope there is to lift peak-season rates as an overflow destination for Kyoto’s lodging demand.

Booking Curve — Last-Week Pickup Follows the Same Pattern as Kyoto

Next, how bookings come in. Averaging estimated occupancy for September 2026 stay dates by lead time (LT, days before stay), Shiga rose from 63.4% at LT45 to 77.6% at LT7 and 85.7% at LT1 (157 properties / 7,114 rooms, based on major booking-site listings). Kyoto Prefecture rose from 60.1% at LT45 to 84.0% at LT1 (759 properties / 33,110 rooms), so Shiga is 1.2–3.6 points above Kyoto at every point. Both prefectures add around 8 points in the final week, so the structure — last-minute price adjustments finishing off occupancy — is the same.

Demand Types — Otsu Is Office-Led, Kusatsu Population-Led, Hikone Tourism-Led

Around the three representative stations, look at residential population and employment. Otsu Station, in the prefectural capital, has 15,245 workers within a 1km radius, and the office-type share of 29.8% is the highest of the three. Kusatsu Station has the most workers at 19,791, and the residential population within 1.5km is projected to move roughly flat, from 57,623 in 2025 to 57,335 in 2040. Hikone Station has 7,412 workers and an office-type share of 14.7%, and its residential population is projected to fall −10.8% by 2040 versus 2020. Kusatsu has deep weekday business demand, Otsu combines government/office demand with lakeshore leisure, and Hikone is a tourism-led location.

Around Kusatsu Station, dense residential meshes spread out on both the east and west sides of the station. The south’s character — a deep concentration of business and manufacturing — shows in its population distribution as well.

Supply and Location — 2,426 Rooms Within 1km of the Three Stations; Only Hikone Grew

Within 1km of the three representative stations, operating lodging properties with 10+ rooms numbered 8 properties / 853 rooms at Otsu Station, 7 / 737 at Kusatsu Station and 8 / 836 at Hikone Station. Since 2017, Otsu Station has barely moved, from 840 to 853 rooms, and Kusatsu Station has stayed at 712. Hikone Station grew from 473 to 836 rooms, mostly from openings of 245 rooms in 2018 and 129 rooms in 2020. By opening date, 5 of Kusatsu Station’s 7 operating properties opened in the 1980s–90s, and 3 of Otsu Station’s 8 opened in the 1990s. A large stock around 30 years old means many candidates for rebuilding or repositioning. For the scale of new supply across the prefecture and price bands in the business segment, see also Shiga Hotel Development: 1.5% New Supply in 2026.

Room stock in this article covers lodging properties with 10+ rooms (excluding leisure hotels) within 1,000m of Otsu, Kusatsu and Hikone stations; “operating” means properties with a selling price confirmed on major booking sites in the last 3 months (August–October 2026) (as of October 29, 2026, compiled by MetroEngines Research).

Land prices are strongest in the south. Oji 1-chome in front of Kusatsu Station is ¥510,000/m² (+11.8% YoY), above Otsu Station’s ¥394,000/m² (+4.5%), while Daito-cho in front of Hikone Station is ¥125,000/m², flat for a third straight year. Flood risk should be checked site by site. Otsu Station lies outside the maximum-scale flood inundation area, but the Hama-Otsu lakeshore, about 800m downhill from the station toward the lake, falls in a 0.5–3.0m zone under the Lake Biwa scenario, and Hikone Station falls in a 0.5–3.0m zone under the Seri River scenario. For projects that sell lake views, placing electrical equipment on upper floors and assigning the ground floor to uses that can keep operating after flooding will matter for both insurance premiums and business continuity.

Positioning — Station Areas Cluster at ¥5,000–14,000; the Band Above Is Open

Plotting the 12-month estimated settled ADR of properties within 1km of the three stations against room count, 20 of 22 properties fall in the ¥5,000–14,000 band. Only one resort hotel on the Otsu lakeshore (175 rooms, ¥19,400) exceeds ¥15,000, and the ¥15,000–25,000 band is almost empty in station areas. The prefecture’s resort hotels average ¥21,000 over the last 12 months (N=11 properties) and ryokan ¥14,500 (Sep 2026, N=55 properties), so the demand to support this band does exist in the prefecture.

A real example of the upper band is Kamenoi Hotel Hikone (亀の井ホテル 彦根), acquired by Invincible Investment Corporation (8963) in July 2024 (41 rooms, acquisition price ¥2,603 million, about ¥63.5 million per room). Its 12-month estimated settled ADR is ¥24,700, holding at about 2.9x Hikone City’s 12-month average (¥8,500). It shows that a business model pairing Shiga’s lake and castle-town assets with upper-band pricing at 40–50 rooms works as a J-REIT acquisition target.

Development Scenarios — Required ADR for New Builds: Otsu ¥13,400, Kusatsu ¥12,500, Hikone Small ¥24,200

Next, assuming new builds in front of the three stations, we back-calculated the ADR needed to secure a 7% GOP yield (required ADR). Assumptions: construction cost of ¥2.405 million per tsubo, the 2025 average for steel-frame buildings based on MLIT’s Statistics on Building Starts; land at the official land price of the nearest commercial site to each station; 80% of the permitted floor-area ratio used; and ancillary costs such as pre-opening expenses at 10% of land plus construction. GOP margin is set at 50% for limited-service and 35% for small upscale, which includes F&B. Assuming a 2029 opening, the lower row shows values that factor in construction cost inflation during the build period (assumed +5.3% in 2026 and +5.0% in 2027).

For A, in front of Otsu Station, the required ADR is ¥13,400 against a city 12-month average of ¥12,500 — a gap of under ¥1,000. The November estimate of ¥15,300 is above the break-even line, so if the property can be run to capture rate during Kyoto’s peak seasons and the lakeshore leisure season, the yield reaches the 7% range. For B, in front of Kusatsu Station, the required ADR is ¥12,500 against a city average of ¥8,600, so a standalone new build would need to move up a full price band. In the south, realistic options are acquiring and renovating existing stock, or a limited-service hotel of around 40 rooms with lower construction cost. This reading is consistent with the fact that 3 of the 6 properties with 20+ rooms opened in the prefecture in 2024–2026 were suburban limited-service hotels of 38–47 rooms under a single brand (based on confirmed OTA listings; N=51 properties opened in 2024–2026).

For C, the small upscale property in Hikone, the required ADR of ¥24,200 exceeds the prefecture’s resort average of ¥21,000, but a listed-REIT property already achieves ¥24,700. With land under one-third of Otsu’s price and a small land-cost share, success depends on whether investment in the building and experience can be turned into price. Developments around Hikone Castle, which is aiming for World Heritage inscription in 2028, are covered in detail as a site evaluation of the area within 1.5km of the castle in Hikone Castle World Heritage 2028: 947 Rooms and Hotel Site Limits.

Sensitivity and Risks — Otsu Holds 5.9% Even at ADR −10%

Moving both rate and occupancy shows how the yield responds in front of Otsu Station. The table below is a two-axis sensitivity, starting from A’s reference level (ADR ¥12,500, assumed occupancy 80%, 6.5%) and scaled proportionally to ADR and occupancy. A 7% GOP yield is reached with a required ADR of ¥13,400+ at 80% occupancy, or 86%+ occupancy at the 12-month average of ¥12,500; capturing the foliage-season estimate (¥15,300) clears 7% even at 75% occupancy. Because ¥1,000 of rate and 5 points of occupancy carry almost the same weight, peak-season pricing drives the annual yield.

On the risk side, the first is demand volatility. In 2025, rates were lifted by the Expo effect, so autumn 2026 continues to be compared against a high prior-year base. Reading statistics carefully also matters. Shiga Prefecture’s Tourism Visitor Statistics show a record 4,101,588 overnight guests in 2025, but statistics with different scopes or methods can show different trends. On supply, MLIT’s list of large projects based on the Building Dynamics Statistics Survey showed no projects located in Shiga Prefecture at the time of the survey. *Based on building confirmation applications at the time of the survey. Counts and room numbers are expected to rise as applications are added, so treat this as a lower bound of the confirmed pipeline at present. Rising construction costs also act as an upside factor, deterring new entrants and easing competition for existing properties.

Summary — Room to Capture Rate as Kyoto’s Outer Ring

To sum up, Shiga’s lodging market matches Kyoto on occupancy but sits at only 50–60% of Kyoto on rate. The rate gap is widest in Kyoto’s foliage and cherry-blossom seasons; if station-area hotels in Otsu and Kusatsu can offer a price band one step up in those periods, existing high occupancy can be turned into revenue. By investment priority, a limited-service hotel in front of Otsu Station ranks highest given demand depth and how close the required ADR is, while in Hikone and Nagahama, 40–50-room upscale properties are candidates to fill the open band. In Kusatsu and Ritto in the south, the realistic path is to leverage stable business demand and raise price bands by acquiring and renovating existing properties.

*Estimated OCC (occupancy) is an estimate based on how inventory sold on OTAs is absorbed, and differs from a property’s actual overall occupancy. MetroEngines Research tracks about 168,000 properties in Japan and analyzes about 27,000 properties (about 1.26 million rooms) confirmed operating on OTAs.

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