TOKYO – The anticipated hit to Japan’s tourism sector from a sharp decline in Chinese visitors hasn’t materialized as severely as feared, according to interviews with businesses at key tourist destinations. While the number of Chinese tourists has fallen significantly following a travel advisory issued by Beijing, spending patterns had already begun to shift prior to the recent diplomatic tensions, mitigating the impact on overall revenue.
Foreign visitors to Japan surpassed 40 million in 2025, a record high, even as December saw a 45% drop in Chinese tourist numbers after the Chinese government cautioned its citizens against travel to the country, according to the Japanese tourism ministry. This advisory followed remarks by Japanese Prime Minister Sanae Takaichi regarding potential military involvement in a Taiwan conflict, which Beijing deemed unacceptable.
The decline in Chinese tourism initially sparked concerns about a significant downturn for Japanese businesses reliant on high-spending visitors. However, the shift in spending habits observed prior to the diplomatic fallout has softened the blow. Previously, Chinese tourists were known for “explosive buying” – large purchases of luxury goods, and electronics. This trend, however, had already begun to moderate, with visitors increasingly focusing on experiences and more moderately priced goods.
The impact has been felt unevenly across the tourism and retail landscape. Companies heavily reliant on Chinese spending have experienced the most pronounced declines. Shiseido, a beauty and cosmetics firm, saw its stock price plunge 9.08% following the travel advisory. Isetan Mitsukoshi Holdings, the parent company of two major department store chains, lost over 11% of its value. Oriental Land, which operates Tokyo Disney Resort, declined by 5.68%, and ANA Holdings, the airline operator, fell 3.35%. Hankyu Hanshin Holdings, a diversified rail, retail, and hotel operator, was down 1.99%.
The diplomatic spat deepened in November 2025, prompting Japan to dispatch a senior foreign ministry official to China in an attempt to ease tensions. Masaaki Kanai, a director-general at Japan’s Ministry of Foreign Affairs, met with his Chinese counterpart, Liu Jinsong, in an effort to de-escalate the situation. However, the travel advisory remained in place, continuing to affect inbound tourism.
The Chinese government’s advisory has not only impacted sales at department stores but has also led to a surge in hotel cancellations in popular tourist areas. This has raised concerns among tourism businesses about the potential for a prolonged downturn in Chinese visitor numbers. While the exact duration of the advisory remains uncertain, the industry is bracing for continued challenges.
Despite the decline in Chinese visitors, the overall tourism numbers remain relatively strong, buoyed by increased travel from other countries. This suggests that Japan’s appeal as a tourist destination remains robust, even in the face of geopolitical headwinds. The shift in spending patterns among Chinese tourists, from large-scale purchases to experiential travel, also indicates a potential long-term change in the dynamics of the tourism market.
The situation highlights the vulnerability of Japan’s tourism sector to geopolitical risks and the importance of diversifying its tourism base. While the industry has shown resilience in the face of the current challenges, continued diplomatic efforts will be crucial to restoring confidence and attracting Chinese visitors back to Japan. The impact of the travel advisory is being closely monitored by the Japanese government and industry stakeholders, who are exploring strategies to mitigate the negative effects and ensure the long-term sustainability of the tourism sector.
The decline in Chinese tourism also underscores the broader economic implications of the deteriorating relationship between Japan and China. Beyond the tourism sector, other industries that rely on Chinese demand, such as automotive and electronics, could also be affected by the ongoing tensions. The situation serves as a reminder of the interconnectedness of the global economy and the potential for geopolitical events to disrupt trade and investment flows.
As of , the full extent of the economic impact remains to be seen. However, the initial indications suggest that the Japanese economy is proving to be more resilient than initially anticipated, thanks in part to the diversification of its tourism market and the changing spending habits of Chinese visitors. The coming months will be critical in determining whether the current situation represents a temporary setback or a more fundamental shift in the dynamics of the Japan-China relationship and its impact on the Japanese economy.
