Japan’s Booming Tourism Economy At Risk Of Slowing Down As New Dual Pricing Policies And Currency Strengthens Push Costs By 60% For International Visitors

Japan’s tourism surge could slow down as rising costs, a dual pricing system for tourists, and a strengthening yen drive up travel expenses by 60% for international visitors.

The surge in Australian tourists heading to Japan has been extraordinary, with numbers increasing by 60% in 2024. However, this trend could slow if tourism costs rise.

Several factors are threatening to make Japan a more expensive destination. The once-affordable dream of a budget trip to Japan may soon be a thing of the past due to rising costs, including a stronger yen and increased tourist and accommodation fees.

From July, Japan will introduce a dual pricing system for international tourists. This move, aimed at managing overtourism and funding infrastructure, will charge foreign visitors more than locals at top tourist spots. Some examples of the price disparity include:

• At Junguria Okinawa, tourists will pay JPY 8,800 (AU$94), while locals pay JPY 6,930 ($74).
• Niseko Ski Resorts in Hokkaido will charge tourists JPY 6,500 ($70) per day compared to JPY 5,000 ($53) for locals.
• Himeji Castle charges non-residents JPY 2,500 ($26) and residents JPY 1,000 ($11).

Although it’s common in countries like Thailand and India, this marks a significant policy shift for Japan.

Additionally, Japan is expanding its accommodation tax. Nine new cities and two prefectures have been approved to impose this tax, which will help combat overtourism. The tax, ranging from JPY 100 ($1) to JPY 500 ($5) per night, will be collected in 24 areas, including Kyoto, where high-end hotels could see a lodging tax of JPY 10,000 ($106) for rooms over JPY 100,000 ($1,000) starting in March 2026.

The strengthening yen, which has recently improved after hitting record lows, is also contributing to rising costs. Thanks to intervention from the Bank of Japan (BOJ) and increasing interest rates, the yen has gained value, and inflation in Japan is driving the economy toward stronger currency, making it a less affordable destination for tourists.