Chinese Tourists Gone? Kyoto Hotel Prices Plunge, Tourism Faces New Challenges!

Beneath a decade of “prosperity miracle” lies a structural dependence.
As 2025 draws to a close, global travel enthusiasm is soaring—but hotel prices in Kyoto, Japan, have nearly hit rock bottom. In previous autumns, this city, surrounded by centuries-old temples and stunning red maple leaves, saw hotel rates soar to tens of thousands of yen per night, often fully booked. Last year, the average price even reached a record high of 20,195 yen (approximately 909 RMB).

Today, on major booking platforms, hotels under 10,000 yen (around 450 RMB) per night are plentiful, with some even plunging to 3,000 yen (about 135 RMB). Travel analyst Tori notes that this dramatic drop is not limited to Kyoto but also affects Osaka, Nagoya, Hiroshima, Fukuoka, Kanazawa, and other cities traditionally popular among Chinese tourists or with direct flights to China.

The turning point came in mid-November 2025. Following an official advisory from China’s Ministry of Culture and Tourism urging travelers to avoid Japan temporarily, several major travel agencies suspended or reduced Japanese tour packages. MBS News reported that Chinese arrivals to Japan dropped to 560,000 in November, the lowest monthly figure of the year, in stark contrast to nearly 1 million visitors in January—a 135% year-on-year increase. Nomura Research Institute estimates that this shock could cost Japan 1.79 to 2.2 trillion yen in annual tourism revenue, effectively stalling a major growth engine of the industry.

The “crash” in Kyoto hotel prices vividly exposes Japan’s deep reliance on Chinese tourists. They dominate not only in numbers but also in spending power, preference for cultural hotspots like Kyoto, and demand support during off-peak seasons, making them irreplaceable “high-value clients.”

The shift was rapid: the official warning triggered hesitation among travelers and tightened tour packages, cooling market sentiment. In November, Chinese arrivals plunged to the year’s lowest, many trips were canceled, and hotel bookings were slashed. Facing low occupancy, automated pricing systems triggered chain-wide discounts, culminating in a collective plunge in Kyoto’s hotel market.

The broader impact? The shift of Chinese tourists is sparking a global “customer race.” South Korea, Thailand, Singapore, and Malaysia quickly optimized services and added flights to capture this high-spending segment. Domestic Japanese tourists may fill some gaps, but cannot match the lost spending power.

Professor Kazuo Takahashi of Kinki University emphasizes that Chinese visitors are key to Kyoto’s winter tourism, staying longest on average, and driving high-value sectors like dining and accommodation. For Japan’s tourism, what appears as a short-term hotel price plunge reveals a harsh reality: the decade-long “inbound miracle” largely depended on Chinese tourists.

The question now: with this crucial market on pause, can Japan’s tourism sustain prosperity for the next decade?