It is indoor and separated for both male and female. There is no outdoor onsen at Lakeside Hotel. If this is the first time you are trying a onsen, this one is small and cosy. My feel is that, in the Kawaguchiko area, more people would be going for there for the breathtaking lake scenery and many outdoor activities, rather than onsen experience. Probably due to fact that it only recently became an onsen town, compared to the more famous inner Yamanashi area and the quality of the water is not so therapeutic yet. :)