For international travelers planning a trip to Japan, a new report brings welcome news: hotel rooms in Osaka and the wider Kansai region remain remarkably affordable compared to other major global destinations. An analysis by real estate services firm JLL highlights that despite a nationwide surge in tourism, Japan’s hotel rates offer competitive value, making it a prime time to visit.
However, the report also sheds light on challenges ahead, suggesting this “golden window” of affordability may not last forever. Here’s what travelers need to know about the current hotel landscape in Osaka and what to expect in the near future.
The Global Context: Why Japan’s Hotels Are a Steal
The primary driver behind this value proposition is the historically weak yen, which provides foreign visitors with significantly increased purchasing power. This, combined with a post-pandemic travel boom, has led to a massive influx of tourists. According to the Japan National Tourism Organization (JNTO), the number of international visitors exceeded 3 million for the third consecutive month in May 2024, surpassing pre-pandemic levels.
Despite this soaring demand, JLL’s analysis confirms that average daily rates (ADR) for hotels in major Japanese cities, including those in Kansai, still lag behind those in other world-class cities like New York, London, and Singapore. This creates a unique opportunity for travelers to experience world-class hospitality and service at a fraction of the cost they might pay elsewhere.
The Flip Side: Construction Hurdles Limit New Hotel Supply
While visitors enjoy the competitive rates, the hotel industry faces a significant challenge: a sharp rise in construction costs. Soaring prices for materials and labor shortages are making it difficult and expensive to build new hotels.
This limitation on new supply means that as tourist numbers continue to grow, the pressure on existing hotel rooms will intensify. Hotel operators, while currently enjoying high occupancy rates, are described in the report as “cautiously optimistic” about future revenue growth. This signals a clear expectation that room rates will likely continue to rise to meet the booming demand, especially as the supply of new rooms remains constrained.
Spotlight on Kansai: What This Means for Your Osaka Trip
For those heading to Osaka, Kyoto, and Kobe, the JLL report confirms the Kansai region is a key beneficiary of this trend. The area offers a diverse range of accommodations, from luxury international brands to charming independent hotels and budget-friendly hostels, all at prices that are attractive to a global audience.
The Expo 2025 Effect
Looking ahead, the single biggest factor set to influence Osaka’s hotel market is the World Expo 2025. This massive international event, scheduled to run from April to October 2025, is projected to attract nearly 30 million visitors. This impending surge in demand will undoubtedly place immense pressure on the city’s hotel inventory.
While several new hotels are slated to open in time for the Expo, the limited pace of new construction suggests that demand will likely outstrip supply, particularly during peak periods of the event.
Final Takeaway for Travelers
The message from the JLL report is clear: Japan, and particularly the Kansai region, currently offers exceptional value for international travelers. The combination of globally competitive room rates and the favorable exchange rate creates a perfect storm for an affordable yet high-quality trip.
However, with rising operational costs, limited new hotel development, and the massive demand driver of Expo 2025 on the horizon, this period of high value is unlikely to last indefinitely. For travelers planning a visit to Osaka, the advice is simple: book your accommodations well in advance to lock in the best rates and secure your spot in this dynamic and captivating city.
