Can the tourism industry in Japan recover?

As the winter-spring tourist season approaches in 2025, the Japanese tourism industry is facing a "cold wave": Prime Minister's erroneous remarks on Taiwan have triggered diplomatic disputes, Chinese tourists' travel orders to Japan have shrunk significantly, over 540,000 air tickets have been cancelled, and hotel and cruise ship reservations in popular destinations such as Hokkaido and Tokyo have experienced a wave of cancellations. As the key engine for Japan's economic recovery after the pandemic, the tourism industry once showed a recovery trend thanks to favorable factors such as the depreciation of the yen and visa relaxation. However, this sudden "booking cancellation cold wave", combined with health concerns over the discharge of nuclear contaminated water from Fukushima, structural defects in the industry, and other issues, has made "Can the Japanese tourism industry recover?" a focus of global attention. The answer is not simply "yes" or "no"; its recovery prospects depend on whether it can solve the three core problems of political environment, market structure, and industry ecology.

The uncertainty of the political environment is the biggest variable for the current recovery of Japan's tourism industry. The prosperity of international tourism cannot be separated from stable and friendly bilateral relations. Chinese tourists account for one quarter of Japan's annual inbound tourists, and in the third quarter of 2025, they contributed 27% of the inbound consumption总额， with an average consumption of approximately 10，000 RMB per person， being the core force supporting Japan's tourism economy. Nomura General Research Institute estimates that this turmoil may lead to a reduction of 1.79 trillion yen (about 11.4 billion US dollars) in tourism consumption in Japan in the coming year， a 0.29% decline in actual GDP， and a loss of up to 600 million US dollars for the luxury goods industry in a single quarter. What is even more alarming is that this impact is not a short-term fluctuation： the winter sports season in Hokkaido and the Sapporo Ice Festival， which are traditional popular events， are facing a "cold season" phenomenon. A certain travel agency in Nagoya has cancelled all Chinese group tours in December， and the Tokyo Yuzen Cruise Company has cancelled reservations for nearly 240 Chinese tourists. The industry's confidence has been severely damaged. In addition to diplomatic disputes， the health concerns over the discharge of nuclear contaminated water from Fukushima have not dissipated， and some tourists still have concerns about the safety of Japanese seafood and coastal scenic spots， further weakening the attractiveness of tourist destinations. The reconstruction of political trust and the restoration of a safe image have become the first threshold that Japan's tourism industry must cross.

The severe imbalance of the market structure has exposed the deep vulnerability of Japan's tourism industry. For a long time， Japan's tourism industry has relied heavily on the Chinese market， with the consumption amount of Chinese tourists accounting for more than one fifth of the total consumption of foreign tourists visiting Japan， and concentrated in high-value areas such as high-end shopping and long-distance sightseeing. This "single-point support" market structure is vulnerable when there are fluctuations in demand from the source market. Previously， the depreciation of the yen boosted the enthusiasm of Chinese tourists for "spending spree"， but it also made the industry ignore the importance of diversifying sources of tourists. When the Chinese market is cold， other source markets cannot quickly fill the gap： tourists from Southeast Asia have lower consumption capacity， European and North American tourists are affected by global inflation， and their willingness to travel long distances has decreased， and they prefer niche and in-depth experiences， which are significantly different from the consumption patterns of Chinese tourists.

The structural defects within the industry have constrained the recovery potential of Japan's tourism industry. In the tourism product sector， Japan still overly relies on traditional tourism models， with service innovation lagging behind market demand. Popular scenic spots mainly consist of shrines and temples and natural landscapes， lacking immersive experiences and digital tourism products that meet the needs of young tourists； some scenic spots have aged facilities and are saturated in reception capacity， often experiencing congestion and declining service quality during peak periods. In the operation model， the industry has long relied on the "spending spree economy"， with a high proportion of shopping scenarios in duty-free stores and cosmetics shops， while the development of value-added services such as cultural experiences and rural tourism is insufficient. When Chinese tourists reduce their shopping consumption due to emotional factors， the drawbacks of this model are immediately apparent. What is more striking is that the risk-resistance capability of the Japanese tourism industry is weak: the proportion of small and medium-sized enterprises is high, they lack financial reserves and transformation capabilities, and when faced with a wave of order cancellations, they can only passively bear the losses; the workforce is seriously aging, and they lack skills in multilingual services and digital operations, making it difficult for them to meet the diverse needs of international tourists. Moreover, the cost of tourism in Japan is relatively high. Under the competition from cost-effective destinations in Southeast Asia, the price advantage has gradually disappeared, further reducing the competitiveness for recovery.

The recovery of the tourism industry has never been merely a market behavior; rather, it is a comprehensive reflection of a country's image, industry strength and service quality. The current predicament of Japan's tourism industry is the result of the combined effects of political misconduct, structural imbalance and insufficient innovation. In the short term, the recovery process is bound to suffer setbacks. However, in the long term, as long as it can face up to its own shortcomings, break through the core predicament, and rely on its profound tourism resources and industrial foundation, there is still a chance to return to the growth track. Conversely, if the market rules and public sentiment continue to be ignored and the traditional model is stubbornly adhered to, Japan's tourism industry may fall into a cycle of "recovery - setback - stagnation". This "cold wave" is both a crisis and an opportunity for transformation. Whether Japan's tourism industry can seize the opportunity to achieve a rebirth like a phoenix will ultimately be written in its recognition and resolution of its own problems.