Otaru Spotlight: A Hidden Gem for Skiers, Investors, and Travelers

This is the first in a series of deep dives into ski towns across Japan that I believe are not only great places to visit, but also smart long-term investments. First up the town we own our house in. Otaru.

Otaru is a coastal city in Hokkaido with a population of around 100,000. The name "Otaru" is derived from the Ainu language, one of Japan’s few surviving indigenous cultures, and means “river running through the sandy beach.” The Ainu people are believed to be descendants of those who have inhabited northern Japan since as early as 10,000 BCE. You can still see glimpses of this ancient history at places like Temiya Cave, which contains petroglyphs dating back to around 400 BCE. In the late 1800s through the early 1900s, Otaru transformed into the economic and cultural center of Hokkaido, serving as the island’s main international port during the herring boom. During this period, it earned the nickname “Wall Street of the North” due to the concentration of financial institutions and trading companies that set up shop here. At its peak, over 25 banks had offices in Otaru.

Although the economic center of Hokkaido eventually shifted to Sapporo, Otaru’s golden age left behind a rich architectural legacy. Unlike much of southern Japan, which was heavily impacted by a combination of WWII, rapid postwar development and Japan’s laisse fair style housing market, Otaru’s buildings have remained largely intact. You’ll find an eclectic mix of Meiji- and Taisho-era stone warehouses, Victorian-style Western architecture, and traditional Japanese homes all within walking distance of the city's famous canal district. Even one of Frank Lloyd Wrights Pupil’s designed a home here.

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Now Otaru isn’t your classic ski town in the Western sense. It only has one small resort within city limits, Otaru Tenguyama, which is decently steep and receives an ungodly amount of snowfall but its tiny with only 2 lifts and a handful of runs. But Otaru’s location makes it an exceptional base for ski lovers. Within a 30-minute drive, you have access to several world-class ski areas including Kiroro, Sapporo Teine, Sapporo Kokusai. All three of these resorts are small compared to US standards (much bigger then Tenguyama) but are steep, deep and have a relaxed out-of-bounds policy and most importantly are low on the gajin scale. The backcountry just above Otaru and surrounding Kiroro are world famous, just be sure to hire a guide.

What makes these mountains special? Geography. The peaks surrounding Otaru are the first landmasses that moisture-laden winds from the Sea of Japan slam into, resulting in some of the highest average snowfall totals in the country, averaging 65 feet of snow per year. All you need is a NW wind and it’s snowing. And because were located so far north, thaw days are rare.

What really sets Otaru apart from other Japanese ski towns is that it’s a proper city. Many, arguably most, ski towns in Japan are one-horse towns. It’s not uncommon when booking an Airbnb in these areas to receive a message from your host months in advance urging you to make restaurant reservations due to the limited dining options. And they’re not wrong, these towns often revolve around a single main street, and by the time you arrive, everything’s already booked.

That’s not the case in Otaru, this is a city with a population of 100,000, a working port, and a vibrant mix of locals and tourists. It’s full of character, history, culture, and, most importantly, infrastructure. You’re not just visiting a resort town, you’re experiencing a place where people live, work, and eat out year-round. For travelers, this means more spontaneity. Some of my best meals have come from chatting with locals at bars or coffee shops and getting real recommendations, something that’s nearly impossible to do in smaller towns when there are only a handful of places open. And if you plan on bringing your entire family there’s a lot to do without leaving the city from spas, to shopping, to glass blowing to architectural tours and for the little ones, multiple arcades.

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From an investment perspective, that year-round activity is important. While Otaru sees a huge influx of visitors during the winter months, summer has higher occupancy rates. And with Japan’s Agency for Cultural Affairs recently designating Otaru as a Japanese Heritage site, tourism is expected to grow.

Otaru’s food scene is remarkably diverse, especially when you consider its geographic location. Despite being a city, Otaru retains a distinct frontier character, framed by rugged mountains on all sides and the vast, storm-fed expanse of the Sea of Japan. And whether you’re after high-end sushi at Michelin-rated Isezushi, New York–quality pizza at The Coast, or one of the many cozy, no-English-menu izakayas were you’ll be stuck Google Translating your way through the night, you’ll have plenty of options to choose from.

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There are dozens of traditional onsen’s in and around the city. Just a word of advice, Otaru has a history of racially profiling guests coming to the public onsen’s, even going as far as banning all foreigners at one point. This was in part due to issues involving Russian sailors allegedly disrespecting local customs. Be quiet, respectful, and aware of the cultural norms when visiting public baths. And if you have tattoos, they likely won’t let you in to any of the public onsens.

The city also offers great shopping, a walkable downtown, and even a bit of nightlife, something rare outside of places like Niseko or Hakuba. All of this combines to make Otaru not just a great ski hub, but a city you’ll want to keep coming back to, or even invest in. And if Otaru is getting stale, your only an hour train ride to downtown Sapporo, which unlike Nagano, the major city close to other popular ski areas, isn’t completely devoid of life.

While Short term rentals are allowed in Otaru, there’s specific zones mainly around the Canal that are designated for Minpaku or Ryokan license’s. I do not recommend just buying a house you find and hoping you’ll get approval. While you can technically get a license outside this zone you’ll need the approval of your neighbors and it’s a lot less unlikely to happen. If you work with us we can steer you in the right direction. We regularly see people get there full investment back in 30 months, which is unheard of in the states and with the planned Shinkansen extension coming some time in the next 10 years, i think Otaru’s place in Japan as a relatively unknown historic port town is going to change.

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