Right after Japanese Prime Minister Sanae Takaichi suggested in November last year that Japan might intervene in the event of a Taiwan contingency, Japan's tourism industry appears to have begun shaking from the ground up.
According to the Asahi Shimbun and others on the 14th, Japan's Ministry of Finance announced that the travel balance surplus in November 2025 totaled 452.4 billion yen (about 4.2 trillion won). That was down about 19% from the same period in 2024 (558 billion yen). Nominally, it remained a large surplus, but signs of a slowdown in profitability were clear.
Monthly statistics from the Ministry of Finance show that Japan's tourism industry performed well throughout the summer peak season. With the yen weak throughout the year, the surplus widened year over year during the peak season. But in November, the surplus shrank sharply from a year earlier. The timing precisely coincides with when Takaichi said Japan could face an existential crisis that would allow the exercise of collective self-defense in the event of "a cross-strait contingency."
After this remark on Nov. 7 last year, the Chinese government issued a message reminding its citizens to be cautious about travel to Japan. Demand for travel from China to Japan then slowed sharply. China has previously pressured counterpart countries during diplomatic tensions through measures such as restricting group tours or administrative steps related to travel. The Senkaku Islands dispute in 2012 and the controversy over the Fukushima wastewater release in 2023, when a "ban on Japan" was imposed, are representative examples.
This time, with all-around pressure blocking air routes themselves, Japan's tourism industry as a whole is wobbling. According to the local Chubu Shimbun on the 15th, the flight cancellation rate on Japan-China routes this month stands at 40.4%.
Regional airports sustained by Chinese tourist demand are on the brink of withering. Sendai Airport and Shizuoka Airport have seen all China routes wiped out. The situation is also serious at Chubu Centrair International Airport, the gateway to central Japan. The number of weekly Nagoya-to-China flights, 72 through November last year, fell to 56 in December. This month it plunged to 26. Sixty-four percent disappeared in two months. As a result, the number of international flights at Chubu airport has remained below the 300-per-week line for two consecutive months.
The sharp drop in flights immediately led to a plunge in prices at tourist destinations. Japan National Tourism Organization (JNTO) statistics show that the number of Chinese visitors to Japan, 715,000 in October, fell to 562,600 in November, when Takaichi made the remark. In just a month, more than 150,000, or 21%, stopped coming.
Lodgings in scenic spots with a high share of Chinese tourists, such as Kyoto and Kamakura, are feeling the slowdown in demand. Hotel room rates in central Kyoto, which averaged 20,000 yen (about 180,000 won) per night, have now fallen below 10,000 yen (about 90,000 won). In some less popular areas, rooms priced at 3,000 yen (about 27,000 won) have even appeared. Even so, booking rates remain low. The South China Morning Post (SCMP), citing an industry source, said, "It's not so much that the average booking price itself has collapsed, but that temporary discounts and special promotions have increased to fill the demand gap."
According to a Japan Tourism Agency survey on spending trends of foreign visitors to Japan, as of the first quarter last year, the average amount a Chinese tourist spent on shopping during a visit to Japan was 106,000 yen (about 989,000 won). That was the highest among major source countries.
By contrast, South Korean tourists tend to have shorter stays and spend more on food and experiences, resulting in relatively lower per-capita spending. During the same period, spending per South Korean visitor was around 50,000 yen (about 460,000 won), about half that of Chinese visitors.
Looking at total spending by foreign visitors to Japan as of the third quarter last year, Chinese accounted for the largest share at 27.7%. South Koreans were at 9.7%, or one-third of the Chinese level. That means it is difficult to fully fill the gap left by Chinese visitors with tourists from other countries such as South Korea or Taiwan.
The retail sector is also feeling the impact of fewer Chinese tourists. At Takashimaya, Japan's largest department store group, Chinese customers account for 58% of total duty-free sales. At Daimaru Matsuzakaya Department Stores, the figure rises to 66%. With Chinese visitors gone, duty-free sales at these department stores fell more than 10% from a year earlier.
A Daimaru Department Store official told the Japan Times, "The number of South Korean consumers has increased, but they mainly buy clothing and food rather than high-priced items such as luxury watches or jewelry," adding, "In terms of sales aggregates, it is close to impossible for South Koreans to fill the gap left by Chinese consumers."
Experts said this situation is unlikely to be resolved in the short term. Takahide Kiuchi, chief economist at Nomura Research Institute (NRI), predicted, "If the mood of refraining from travel to Japan in China continues for a year, Japan's nominal GDP could shrink by about 1.79 trillion yen (about 16.6 trillion won)." He added, "A freeze in China-Japan diplomacy will be a factor dragging down Japan's economic growth rate by more than 0.3 percentage points in 2026," and, "This situation shows how great the expense can be when political conviction overwhelms economic interest."
The Japanese government is rushing out a policy to diversify tourists. The plan is to reduce dependence on China by expanding efforts to attract visitors from Southeast Asia and Europe. Many in the industry point to practical limits. An airline industry official said, "There is no country that can replace the Chinese market in the short term in terms of geographic accessibility, population size and spending power," adding, "European tourists face limits on the number of visits because of the long flight time, and Southeast Asian tourists do not have spending power on par with China."