The impact of Osaka City's suspension of private lodging in special zones and the trends of local governments within the prefecture on the local economy
The impact of Osaka City's suspension of private lodging reservations in special zones
Osaka City has stopped accepting new applications for "special zone private lodgings" under the National Strategic Special Zone Act. This could have a major impact on the tourism industry and real estate market. Not only has the special zone private lodgings supported the growth of the city's accommodation infrastructure, It has also played an important role in stimulating land price increases.
The role and economic effects of private lodging in special zones
According to estimates by the Osaka Tourism Bureau, approximately 1,459 million inbound tourists (foreign visitors to Japan) will visit Osaka Prefecture in 2024. This has increased by approximately 3.9 times since 2014. The new system of private lodging in special zones, which began in 2016, has become a receptacle for this growth.
As of the end of August 2024, the number of certified rooms will be 18,833 (double the number four years ago).
This is equivalent to approximately 20% of the total number of hotel and inn rooms in the city (102,553 rooms).
The existence of relatively inexpensive private lodgings in special zones has helped to curb the rise in hotel prices and stabilize occupancy rates. If there were no special zone private lodgings, the number may have risen even further. By July 2025, when the Osaka-Kansai Expo will be held, the occupancy rate of accommodation facilities will reach 80%.
Challenges of inbound demand and accommodation supply
The amount of spending by foreign tourists visiting Osaka Prefecture in 2024 is expected to reach 1.2935 trillion yen, a 70% increase from 2018. Tourism demand is expected to continue to grow in the future. However, if the resumption of reservations for private lodgings in the special zones is delayed, it could lead to missed demand for accommodation and a rise in hotel prices.
Response status of local governments in Osaka Prefecture
Osaka Prefecture conducted a survey on intentions regarding "special zone private lodging" among 34 local governments within the prefecture and has updated the results. Following Osaka City's policy, changes are also being seen in the responses of each local government.
Local governments wishing to suspend new applications across their entire area: 7 cities and towns → 27 cities, towns and villages
Local governments wishing to restrict the implementation area: 4 cities and towns → 2 cities
Respondents who responded that they would continue as before: 20 municipalities → 3 cities
Kawachinagano City: Considering its own strengthened regulations and requests to the prefecture
Katano City: Has not been implemented in the past
Municipalities that responded that they would expand the areas where implementation is possible: None
Summary
Osaka City's special zone private lodgings are not only a place to accommodate inbound tourism demand, It has also had a major impact on revitalizing the local economy. However, many local governments in the prefecture, including Osaka City, have begun to shift their focus to suspending or restricting new applications. With the Osaka-Kansai Expo being held, it remains to be seen whether the rules for operating private lodgings in the special zone will be established and whether they will resume accepting reservations. This can be said to be an important issue that is directly linked to the growth of the tourism industry.
