Right after Japanese Prime Minister Sanae Takaichi hinted last November at the possibility of Japan's involvement in 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). In nominal terms, it was still a large surplus, but signs of a slowdown in profitability were clear.
Monthly data from the Ministry of Finance show that Japan's tourism industry performed well throughout the peak summer season. With the yen weak all year, the surplus widened year over year throughout the peak season. But in November, the surplus shrank sharply from a year earlier. That coincides exactly with when Prime Minister Takaichi said, "In the event of a cross-strait contingency, Japan could face an existential crisis that would allow the exercise of the right of collective self-defense."
After this remark on Nov. 7 last year, the Chinese government issued a message reminding its citizens to exercise caution when traveling to Japan. Since then, demand for travel from China to Japan has slowed sharply. China has previously pressured counterpart countries during diplomatic disputes by restricting group tours or taking travel-related administrative measures. The 2012 Senkaku Islands dispute and the 2023 Fukushima contaminated water discharge controversy, when a limit-on-Japan order was imposed, are representative cases.
This time, with sweeping pressure cutting off air routes themselves, Japan's entire tourism industry appears to be shaking. According to the regional Chubu Shimbun in Japan on the 15th, as of this month, the cancellation rate on Japan–China routes stands at 40.4%.
Regional airports sustained by Chinese tourist demand are on the brink of withering. Sendai Airport and Shizuoka Airport have lost all China routes. The situation is also serious at Chubu Centrair International Airport (Nagoya), the gateway to Japan's Chubu region. Weekly flights from Nagoya to China, which numbered 72 through November last year, fell to 56 in December. This month they have plunged to 26. Sixty-four percent disappeared in two months. As a result, the number of international flights at Chubu Airport has stayed below the 300-per-week mark for two consecutive months.
The sharp drop in flights immediately led to a plunge in prices at tourist destinations. According to Japan National Tourism Organization (JNTO) data, 715,000 Chinese tourists visited Japan in October, but that fell to 562,600 in November, when Prime Minister Takaichi made the remark. In one month, more than 150,000 people, 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. Room rates at downtown Kyoto hotels, 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) quoted an official as saying, "It's not so much that the average booking price itself has collapsed, but rather that temporary discounts and special offers have increased to fill a demand gap."
According to a Japan Tourism Agency survey on spending trends of foreign visitors to Japan, as of the first quarter last year, Chinese tourists spent an average of 106,000 yen (about 989,000 won) on shopping per visit to Japan. That was the highest among major visitor countries.
By contrast, Korean tourists have shorter stays and a higher share of spending on food travel and experiences, so per-capita spending is relatively low. During the same period, per-capita spending by Korean tourists was around 50,000 yen (about 460,000 won), about half that of China.
Looking at total spending by foreign visitors to Japan as of the third quarter last year, Chinese accounted for 27.7%, the highest share. Koreans came in at 9.7%, about one-third of China's level. That means it is difficult to fully fill the gap left by Chinese tourists with other countries such as Korea or Taiwan.
The retail sector is also feeling the impact of the decline in Chinese tourists. At Takashimaya, Japan's largest department store group, Chinese account for 58% of total duty-free sales. At Daimaru Matsuzakaya Department Stores, that share rises to 66%. With Chinese tourists no longer coming, duty-free sales at these department stores have fallen more than 10% from a year earlier.
A Daimaru Department Store official told the Japan Times, "The number of 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 Koreans to fill the gap left by Chinese."
Experts said the situation is unlikely to be resolved in the short term. Takahide Kiuchi, chief economist at Nomura Research Institute (NRI), predicted, "If the mood to refrain from traveling 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)." Kiuchi added, "A freeze in China–Japan diplomacy will drag down Japan's 2026 economic growth rate by more than 0.3 percentage points," and, "This situation shows how large the expense can be when political convictions outweigh economic interests."
The Japanese government is rushing out a policy to diversify tourists. The plan is to expand efforts to attract tourists from Southeast Asia and Europe to reduce dependence on China. In the industry, many 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 long flight times, and Southeast Asian tourists do not have spending power on par with China."