Japan has been choked by foreign tourism. And it is understandable. The weakness of the yen, the reactivation of demand after the pandemic stop and the enormous popularity that the country has achieved on social networks has triggered its flow of visitors to record levels, stirring up the debate about the oversight and generating discomfort in some particularly congested destinations, such as Kyoto, Nara or Osaka. To stop it, there is already talk of a tax increase. There are even cities looking for ways to reduce the flow of international tourists.
Now, for reasons that have little or nothing to do with the tourism market, Japan is encountering a collapse in demand in its large market: China. The question is whether that is a blessing or a threat to its economy.
Pack of tourists. The data is incontestable. Japan has become one of the most popular destinations among those planning their vacations. Last year the country received 42.7 million foreign visitors, an absolute record that shatters the figure for 2024, when it fell short of 37 million.
Beyond the year-on-year comparison, the data is interesting for two reasons. First, because never before had the Japan Tourism Organization (ONTJ) counted more than 40 million annual visitors. Second, because the data leaves the 31.9 million of 2019, the last year before the pandemic, far behind. If nothing changes, the Government plans to reach 60 million this decade, which will translate into a powerful injection of resources into the Japanese economy. In 2025 alone, foreign travelers spent more than $60 billion.
More than money. The problem is that this flow of tourists not only translates into full planes, hotels with the sign ‘no places left’ and hoteliers and merchants satisfied with their sales. The international tourism boom has generated tensions in some especially congested destinations, leaving almost surreal episodes, such as the one experienced in Kyoto. There the authorities have had to prohibit “paparazzi tourists” from accessing one of the most emblematic points of the city. The reason: so that they do not harass the geishas.
It is not the only proof of the tensions that are emerging due to tourist saturation. In Fujikawaguchiko the authorities, unable to contain the hordes of travelers eager to “hunt” the best selfiethey chose to install a fence that blocks the views of Fuji. In Fujiyoshida they just canceled their festival sakura because it saturates the city with visitors who clog traffic, sneak into homes and leave trash in parks. And in Yamanashi they decided years ago to start charging for ascending Fuji to preserve the mythical mountain.
And the Taiwan crisis arrived. Whims of geopolitics and international diplomacy, Japan has just found that this record flow of visitors could receive a severe setback. And all on account of something that has little or nothing to do with the tourist market: Taiwan. To understand it, we have to go back to November 7, when the Prime Minister of Japan, Sanae Takaichi, warned during a parliamentary debate that Japan would not hesitate to mobilize its self-defense forces in case China entered Taiwan by force.
Although the Japanese Government assures that its position remains the same as always, the truth is that Takaichi’s words broke the “strategic ambiguity” that Japan has maintained for decades. And that was not liked one bit in China. The relationship between Beijing and Tokyo was strained to such an extent that the Asian giant responded with more than just diplomatic complaints: it canceled concerts by Japanese artists, postponed the release of films, reclaimed pandas transferred to Japanese zoos and restricted its valuable exports of rare earths.
What does it have to do with tourism? That in its response to Japan, Beijing also played one of its great economic assets: tourism. Chinese authorities advised their citizens to avoid Japan and dozens of air routes with the country were even cancelled. In November the BBC reported that some Chinese airlines were offering customers refunds for flights to Japan. Such a movement would not have much importance if it were not for the fact that China is one of the main sources of the Japanese tourism sector. The Asian giant is one of its largest source markets, along with Korea.
According to the Japan National Tourism Organization, in 2024 China was the second largest source of tourists visiting Japan. It concentrated around 19% of all demand, only behind Korea (24%). The data is also completed with the 7.3% of Hong Kong and the high weight that Taiwan also has in Japanese tourism. The flow from the Asian giant is key, however, for another reason: as he recalls The New York TimesChina not only moves many tourists but its tourists spend a lot in Japan.
Goodbye Chinese tourists. Although the open conflict between China and Japan is recent, its effects have not taken long to be noticed in the tourism industry. TNYT assures that in December the flow of Chinese travelers already plummeted by 45% compared to the same month in 2024. And the situation does not seem to be improving in the coming months: Japan has fallen from the list of the most coveted destinations for the Chinese to enjoy their Lunar New Year holidays. There are those who already warn that Japanese hotels will welcome 60% fewer Chinese.
Why is it important? Beyond the percentages, this ‘puncture’ in the Chinese market represents a setback for a sector (Japanese tourism) that until recently seemed unbeatable. Despite how popular Japan continues to be in the rest of the world and the record data it is harvesting, its balance of incoming tourist spending registered a drop of 2.8% during the last three months of 2025.
It is not a high percentage, but it represents the first decline in more than four years. In November, Bloomberg already warned that a diplomatic row with China threatened to cost Japan’s tourism sector some 1.2 billion in revenue. If the data were not conclusive in itself, it comes at a sensitive time, in which Japan is looking for a way to boost its economy. Of course, the new scenario also has its beneficiaries. Neighboring South Korea is already emerging as the favorite destination for Chinese planning their vacations.
Images | Kian Hao Ng (Unsplash) and Ishaan Sen (Unsplash)
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