Sapporo’s Hotel Shortage and Rising Costs: The Root Cause

Even business hotels exceed 30,000 yen

The continued rise in hotel prices across the country is becoming a serious issue for domestic travelers. Among the areas experiencing what can only be described as abnormal price hikes is Sapporo.

In mid-January, while searching for a hotel for a business trip to Sapporo, a reporter from this magazine was shocked by the prices. Even though the reporter deliberately avoided peak seasons such as the Snow Festival and Chinese New Year, business hotels were charging over 30,000 yen per night. A regular hotel, which had previously been affordable, had increased in price by more than four times.

By early February, when searching on major travel websites, prices were still in the high 30,000 yen range. Even capsule hotels were priced over 20,000 yen, and city hotels were exceeding 60,000 yen in some cases. However, according to a hotel employee in Susukino, “It’s still better than having no vacancies at all.”

“When the idol group ‘Snow Man’ held a concert in Sapporo last November, hotels in Sapporo and nearby cities were fully booked, and accommodation refugees were overflowing. We even had to arrange hotels in Asahikawa, three hours away. With the growing number of tourists and large events coinciding, the capacity is completely overwhelmed. This winter, especially, is abnormal. Other popular tourist spots in Hokkaido are facing similar situations,” the employee explained.

Currently, there are about 200 accommodations in Sapporo, with a total capacity of around 74,000 people.

An official from the hotel and ryokan association explained the reason behind the price hikes.

“Simply put, it’s the increase in inbound tourists. Normally, the period from late November to the Chinese New Year in January is a quiet period, but since last year, the off-season has shortened, and the price range has started to rise. I’ve heard that hotels are receiving complaints that the cost exceeds what company employees can pay as expenses.”

The cry of nighttime establishments

New Chitose Airport, the gateway to Sapporo, is crowded with inbound travelers.

Sapporo, with its sharp contrasts between the off-season and peak season, faces challenges that prevent businesses from easily expanding hotels. As mentioned by the employee earlier:

“From April to June, and September to December, it’s truly a quiet period with very little movement. Essentially, we need to earn enough in the busy season to cover the entire year’s revenue. However, costs for labor, utilities, and maintenance are soaring, making it difficult for many businesses to stay afloat. There have been discussions about foreign chain hotels opening, but most of them are luxury hotels targeting foreign tourists. Just adding more hotels in response to the shortage during peak season is not that simple.”

The situation is currently one of no viable solutions, and it seems that the difficulty for Japanese travelers to visit Sapporo will persist until the end of March, when the peak season ends.

On a visit to the area, the reporter observed that nearly 70% of hotel guests were foreign tourists. Large buses arrived at the hotels early in the morning, and taking an elevator was a struggle. Walking through Susukino or Odori, long lines could be seen outside popular ramen and jingisukan restaurants until around 11 PM.

A travel agency employee, whose main focus is accommodating foreign tourists, revealed some of the circumstances:

“Hokkaido has many repeat visitors, there’s no doubt about that. Of course, famous tourist spots are always popular, but recently, we’ve seen more specific requests. For example, this year, many Asian guests have asked to enjoy the snow. Requests for visiting filming locations of popular dramas and movies, local cuisine favored by residents, and nightlife activities have become more diverse.”

However, on the other hand, nightclub owners in Susukino, including pubs and snack bars along “Shinjuku Street,” are not benefitting from the bubble of foreign tourism. One of the street’s touts lamented:

“Foreign tourists rarely visit places with women. Furthermore, with hotel prices soaring, there has been a clear decrease in Japanese tourists this winter. Susukino is a region with significant revenue from tourists. Everyone is worried, saying, ‘This winter is tough.'”

Hokkaido Tourism Organization has outlined a goal to increase total tourism consumption by 2.9 times to 1.25 trillion yen by 2030. While the region has seen some excitement, it’s important to reconsider whether this situation is truly welcome, as the challenges and concerns of the local businesses suggest a more complex reality.