For the past six months, Osaka has played host to the World Expo, a quinquennial event that brings together people and innovations with a focus on key global challenges. The event has historically generated substantial gains in hotel performance, a pattern that was evident in Osaka and neighboring markets in Japan.
Expo 2025 ran from mid-April through mid-October on Yumeshima, a manmade island just off the coast of Osaka. The market’s hotel industry maintained double-digit growth in revenue per available room (RevPAR) for the entire six-month run of the month. Gains in average daily rate (ADR) peaked during the closing week, and RevPAR increased nearly 100% year over year for those final days.
Occupancy growth, while more moderate, remained impressive. Osaka held occupancy above 80% during the Expo period, which is notable given the market boasts more than 98,000 hotel rooms. That’s roughly 28% fewer rooms than prior host Dubai but well ahead of the 35,000 rooms 2015 host Milan had on offer.
Unlike Milan, Osaka had a modest development boom ahead of Expo, increasing supply roughly 14% over the past two years.
At the class level, ADR remained the primary driver of RevPAR growth, which is to be expected. Most events impact rates far more than occupancy levels, especially when a market runs relatively high occupancy during normal demand periods.
For Luxury hotels, however, occupancy growth was the standout. Luxury hotel occupancy increased 24% year over year with an average occupancy of 73% for the past six months. While that may seem low compared to overall market occupancy, it’s not unusual. Luxury hotels typically report the lowest occupancy of all hotel classes, both in Osaka and across many global markets.
Expo over time
While Osaka sits somewhere in the middle in terms of supply, the market outpaced the last two Expo hosts with an impressive 83% occupancy over the last six months.
Rates fell short in comparison, as Osaka reported the lowest ADR among Expo hosts both nominally and in inflation-adjusted figures.
Market dynamics play the biggest role in this outcome. Osaka normally reports the lowest ADR of the three host markets, running roughly 47% below Milan and 38% below Dubai in 2024.
In year-over-year growth, however, Osaka once again shines. Recall that Dubai hosted Expo from October 2021 – March 2022, so year-over-year growth figures are inflated by the incredibly low pandemic-era figures of the prior year.
With that in mind, Osaka posted impressive 31% ADR growth, just ahead of Milan’s 27%. While Milan had highest occupancy growth, Osaka reported actual occupancy several points higher.
In fact, Osaka was the only market to avoid the fourth-month dip in occupancy, with remarkably consistent demand for the last six months.
A dive into monthly ADR growth trends reveals Expo markets typically report the strongest growth in the first two and final month of the event.
Osaka’s strong rate growth in the first month is notable, as Expo 2025 started mid-month, compared to the start of the month in 2015. Osaka rate growth outpaced Milan, despite fewer event days in the first month.
Expo impacts beyond Osaka
Kansai International Airport’s strong regional connectivity meant that Expo attendees didn’t need to transit through Tokyo to attend, though undoubtedly some attendees enjoyed a multi-city trip.
Expo certainly drew demand into Osaka, pushing occupancy within one point of Tokyo year to date, though rates in the Japanese capital remain higher.
Both occupancy and ADR have increased in Tokyo this year as well, though at the monthly level, the pace of growth has slowed as the year progressed. It’s possible Tokyo has lost some demand to Osaka, but a multitude of factors beyond Expo have influenced Tokyo hotel performance this year.
ADR declines in July and August were caused in part by international outbound leisure travel, unfounded rumors of a tsunami, poor weather, and shifting international source markets. These months are also noticeably slower growth months in Osaka as well, meaning it’s possible that fewer Expo attendees during these months had a negative impact on Tokyo hotels.
Conclusion
Osaka has proved that World Expos continues to have monumental impact on hotel performance for the full six-month event run. Host markets can expect occupancy near-to-over 80%, and double-digit ADR growth for the length of the event. Riyadh will play host to the next Expo, which will open in October 2030.
About CoStar Group, Inc.
CoStar Group (NASDAQ: CSGP) is a leading provider of online real estate marketplaces, information, and analytics in the property markets. Founded in 1987, CoStar Group conducts expansive, ongoing research to produce and maintain the largest and most comprehensive database of real estate information. CoStar is the global leader in commercial real estate information, analytics, and news, enabling clients to analyze, interpret and gain unmatched insight on property values, market conditions and availabilities. Apartments.com is the leading online marketplace for renters seeking great apartment homes, providing property managers and owners a proven platform for marketing their properties. LoopNet is the most heavily trafficked online commercial real estate marketplace with thirteen million average monthly global unique visitors. STR provides premium data benchmarking, analytics, and marketplace insights for the global hospitality industry. Ten-X offers a leading platform for conducting commercial real estate online auctions and negotiated bids. Homes.com is the fastest growing online residential marketplace that connects agents, buyers, and sellers. OnTheMarket is a leading residential property portal in the United Kingdom. BureauxLocaux is one of the largest specialized property portals for buying and leasing commercial real estate in France. Business Immo is France’s leading commercial real estate news service. Thomas Daily is Germany’s largest online data pool in the real estate industry. Belbex is the premier source of commercial space available to let and for sale in Spain. CoStar Group’s websites attracted over 163 million average monthly unique visitors in the third quarter of 2024. Headquartered in Washington, DC, CoStar Group maintains offices throughout the U.S., Europe, Canada, and Asia. From time to time, we plan to utilize our corporate website, CoStarGroup.com, as a channel of distribution for material company information. For more information, visit CoStarGroup.com.
This news release includes “forward-looking statements” including, without limitation, statements regarding CoStar’s expectations or beliefs regarding the future. These statements are based upon current beliefs and are subject to many risks and uncertainties that could cause actual results to differ materially from these statements. The following factors, among others, could cause or contribute to such differences: the risk that future media events will not sustain an increase in future occupancy rates. More information about potential factors that could cause results to differ materially from those anticipated in the forward-looking statements include, but are not limited to, those stated in CoStar’s filings from time to time with the Securities and Exchange Commission, including in CoStar’s Annual Report on Form 10-K for the year ended December 31, 2023 and Forms 10-Q for the quarterly periods ended March 31, 2024, June 30, 2024, and September 30, 2023, each of which is filed with the SEC, including in the “Risk Factors” section of those filings, as well as CoStar’s other filings with the SEC available at the SEC’s website (www.sec.gov). All forward-looking statements are based on information available to CoStar on the date hereof, and CoStar assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
