Ozu Castle in Ehime prefecture's Ozu town is the first and only castle keep in Japan to allow travelers to stay overnight. With a history dating from 1617, it's also one of only a handful of timber castles left in Japan.

'Little Kyoto'

Once a political center in the Edo era (1603-1868), it flourished during the Meiji (1868-1912) and Taisho (1912-1926) periods thanks to wax and silk production and trade.

But the fortunes of Ozu, like many other rural towns in Japan, have drastically dropped in recent decades.

Since the 1950s, the town has witnessed a substantial population decline, going from 79,000 residents in 1955 to about 42,000 in 2020.

"With this, comes the closure of businesses and abandoning of houses, which increases the chances of young people leaving to find better prospects," says Diego Cosa Fernandez, director of the Architecture and Culture Research Department at Kita Management, an offshoot of the city's Tourism and City Planning bureau.

"Lacking young couples, fewer children are born, and the snowball grows bigger."

Scenic Ozu is famous for its 400-year-old castle.

Kita Management / Seki Co Ltd

Under these trying circumstances, many landlords have decided to demolish their old houses due to a perceived lack of economic value.

"In most cases, former houses became vacant lots or are used as parking lots," Fernandez tells CNN Travel. "There was a sense among locals that this trend shouldn't go on. Something had to be done."

Kita Management has become part of the solution.

An organization that strives to preserve the old houses "that were disappearing at an alarming rate," its team repurposes them sustainably and respectfully for the community.

Born and raised in Spain, Fernandez studied in Kyoto for a year after completing a degree in architecture in the early 2000s. He returned to Japan while working on his PhD on "water, architecture and history" in 2012. It was then that he stumbled upon Ozu.

"The area became the spine of my research," says Fernandez, "Little by little my local network expanded.

"All over Japan, rural settlements -- and the Japanese government -- are trying to come up with the 'magic' formula, or the right policies, to stop the bleeding. We are part of this trial-and-error scheme."

Staying in Ozu Castle

The current Ozu Castle, with its newly opened accommodation option, has been reconstructed -- which explains why officials permitted it to be turned into a hotel.

Japan's Laws for the Protection of Cultural Properties include strict restrictions on alterations to tangible heritage buildings, including many of the country's castle keeps.

After the demolition of the original Ozu Castle structure in 1888, the town decided to rebuild their sorely missed symbol in the 1990s from the ruins -- using timber instead of concrete.

One of Ozu Castle's guestrooms.

Kita Management / Seki Co Ltd

"Timber construction was several times more expensive and post-war construction law did not allow timber structures taller than 13 meters," says Fernandez. "Ozu Keep is 19-meter high."

Ozu Castle opened its doors to hotel guests in July, giving guests a chance to enjoy the castle building privately after the gate is closed to public visitors at 5 p.m.

For the first year, only 30 stays will be permitted, with up to six guests allowed during each stay.

The rate is a million yen (or $9,469) per night for two guests -- and 100,000 yen, or $946, for every extra guest.

As the castle keep features no shops, toilets or air-conditioning, a luxury bath and an attached lounge have been built in a hidden corner of the compound for hotel guests.

So what is a stay in the castle like?

Upon arrival, guests -- who can choose to dress up in traditional kimonos and medieval warrior outfits -- will be welcomed by the sound of shell trumpets, waving flags and a gunpowder squadron.

They'll then be treated to a local kagura, a traditional dance performance that's registered as an important intangible folk cultural property of Japan.

Dinner is served at one of the four turrets in the castle compound, followed by a moon-viewing session with sake drinking and poetry recitation.

The turrets are original, having survived the last four centuries.

After spending the night at the compound, guests have breakfast at Garyu Sanso, a historical cliffside villa with a teahouse overlooking the Hiji River.

The Castle Town Hotel

But the Castle Hotel isn't the only new accommodation option in town. The entire Nipponia Hotel Ozu Castle Town project includes multiple locations around Ozu.

Eleven more hotel rooms are scattered in three restored houses across town.

Inspired by the names of three ancient Ozu lords, the houses -- called SADA, OKI and TSUNE -- each has an interesting back story.

SADA was owned by a doctor in the early 20th century and might have been used as a clinic. It now serves as the hotel complex's front desk and features a restaurant that is open to both hotel guests and the public.

The Nipponia Hotel Ozu Castle Town project also offers rooms in three beautifully restored houses.

Kita Management / Seki Co Ltd

TSUNE was once occupied by a 400-year-old restaurant that was left vacant in early 1980s. It now has two rooms and a banquet and event hall.

"OKI is the jewel among the old houses," adds Fernandez.

"It belonged to Murakami, a very rich industrialist who made his fortunes producing Japanese wax. Oki was the main residence so they spent many efforts displaying their status. It's also one of the oldest residences still standing in Ozu."

A stay in one of the castle town houses starts at 17,000 yen ($160) per night.

While the first phase focuses only on hotel rooms, additional venues will open in the second phase, including a microbrewery.

"Our goal is to identify fragile houses, convince the owner to lease them to us, engage them in the renovation processes, find a suitable use (and a suitable tenant) and keep them for 15 years," says Fernandez.

After the 15 years, the renovated house will be returned to the original owners for them to decide whether they would continue to run the business or not.

"In the end, we aim to generate a more livable city center where young couples will be deciding to move in because they have jobs, bars and cafes where they can eat, nurseries that take care of their kids and attractive houses to sleep in -- and residents are deciding to stay because of the same reasons," says Fernandez.

For the Spaniard, Ozu's biggest attraction is its contrasting elements.

"There is a castle, zen temples, nice shrines, teahouses, merchant houses, samurai residences, pottery making, silk making, Japanese washi making and festivals," he says.

"Albeit beautiful, none of them may deserve superstardom but the ensemble is charming and convenient -- and it's packed within a short distance. It feels like a small or handy encyclopedia of Japanese art and history."

Getting there: Ozu is located about 60 kilometers from Matsuyama, Ehime Prefecture's capital city, and its airport.