Sharp decline in Chinese tourists but overall visitors to Japan exceed record

The number of Chinese tourists to Japan grew by just 3.0% year-on-year in November, a sharp drop from October's 22.8% increase. The Japan National Tourism Organization's data suggests deteriorating Japan-China relations played a role in this slowdown. Meanwhile, total inbound visitors from January to November hit 39,065,600, surpassing the 2024 annual record of 36,870,148.

According to statistics released by the Japan National Tourism Organization on Wednesday, the number of Chinese visitors to Japan in November rose by only 3.0% compared to the previous year, down sharply from a 22.8% increase in October. Analysts attribute this slowdown to strained relations between Japan and China, which may be dampening travel enthusiasm.

In contrast, overall inbound tourism remains robust. From January to November, Japan welcomed 39,065,600 foreign visitors, marking a 17.0% rise from the same period last year. This total already exceeds the full-year record of 36,870,148 set in 2024, positioning 2025 for a second straight year of highs. Factors include post-COVID recovery and a weaker yen, enhancing Japan's appeal as a destination.

By nationality, China topped the list with 8,765,800 visitors, followed by South Korea and Taiwan. While tourism continues to bolster the economy, the dip from China could influence future trends.

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Tokyo shopkeepers cheerfully serve Japanese customers in a bustling store, shrugging off fewer Chinese tourists amid diplomatic tensions.
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Japanese businesses brush off worries over fewer Chinese tourists

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A diplomatic spat over Japanese Prime Minister Sanae Takaichi's remarks on Taiwan prompted China to warn its citizens against traveling to Japan, leading to fewer Chinese tourists, but Tokyo business owners largely dismiss concerns about sales impacts. Managers report that increased Japanese shoppers have offset the drop. In China, group tour cancellations are surging.

Geopolitical tensions leading to Beijing's travel advisories caused a sharp drop in duty-free sales at major Japanese department stores in December. This decline underscores Japan's vulnerability to shifts in Chinese tourism, a vital engine for economic recovery.

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South Korea is poised to surpass Japan as the top destination for Chinese travelers during the upcoming Lunar New Year holiday, marking the first time since the COVID-19 pandemic. Booking estimates indicate 230,000 to 250,000 mainland Chinese visitors to South Korea, a potential increase of up to 52% from last year. This shift highlights Seoul's visa relaxations amid tensions with Tokyo.

Government data showed Japan's household spending rose 2.9% year-on-year in November, defying forecasts of a 0.9% decline. The increase, driven by automobile-related expenses and dining out, indicates a steady recovery in private consumption.

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Hong Kong welcomed 10% more visitors during the Christmas period than in 2024, while residents took nearly 1.7 million outbound trips, up 22% from last year. Despite the influx of tourists, merchants warn that the absence of New Year's fireworks could deter visitors and hurt the retail sector. Consumer sentiment has been dampened by last month's deadly Tai Po fire, which killed 161 people.

China's retail sales grew by just 1.3 percent in November, missing forecasts and slowing for the sixth straight month. Investment from January to November fell 2.6 percent as the property slump persisted. Officials recognize ongoing challenges and urge more proactive macroeconomic policies.

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The Japan-China Economic Association, comprising Japanese business groups including Keidanren, has announced the postponement of a planned delegation to China in January. The decision stems from China's heightened opposition to Prime Minister Sanae Takaichi's remarks on a Taiwan contingency, complicating arrangements for meetings with officials. This marks the first such disruption in over 13 years due to political tensions between Asia's two largest economies.

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