This paper takes up hotel location in Higashihiroshima City, a local urban center that has been growing rapidly, and analyses whether this city has sufficient urban functions according to its rank and growth. It also considers the possibilities for further hotel location and the influence this would have on the area. For this research, two aspects were examined : the situation of the supply side, hotels and other institutions that provide similar services within Higashihiroshima City, and of the demand side, companies and universities that create demand for hotels. To this purpose, mainly three types of key-person interviews and four types of questionnaires were conducted (Table 1). The results can be summarized in three points. First, within the city there exists a common perception that hotel supply is insufficient, and that something should be done to solve that problem. Second, there are currently about 600 hotel rooms available, but hotels are scattered around the city and are not sufficiently providing information through the Internet or other media, so the accommodation market doesn't appear to be very competitive. Third, the demand situation can be characterized by three factors. Demand culminates more or less regularly a few times a year during university entrance exams, academic conferences or city events (Fig. 8-A). During these periods, demand by far outstretches supply. A more long-term demand pattern arises from the fact that Higashihiroshima City is an industrial city. When any of the factories renew or improve their factory lines, personal from other regions will stay for a few months (Fig. 8-B) and accommodation capacities will be used to their limit; however, such a renewal takes place only once in a few years. As a third factor, it is possible that visitors who come to Higashihiroshima City for work or to visit friends and relatives will use the city as a base for tourism to Hiroshima City or Miyajima, but as public transport within the area is very inconvenient, this might not lead to an increase in demand for hotels within the city. Although the administration and the chamber of commerce have high expectations for the location of a city hotel that provides not only accommodation but also space for events and other services, an analysis of demand pattern showed that a simple business hotel would better match the needs of the market. However, highly unstable demand has so far been the major handicap for the location of a new hotel in the city. When actively promoting hotel location in Higashihiroshima City, it is also necessary to consider the sharing of urban functions with Hiroshima City, the higher ranking urban center.
