Japan faces $1.6b tourism hit amid China row; trip bookings to S’pore, S. Korea rise
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Around 30 per cent of the 1.44 million trips to Japan from China planned through the end of December have been cancelled.
PHOTO: REUTERS
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TOKYO – Japan could lose out on as much as US$1.2 billion (S$1.6 billion) in visitor spending between now and the end of 2025, as would-be travellers from China cancel their trips because of a worsening diplomatic spat.
Around 30 per cent of the 1.44 million trips to Japan from China planned through the end of December have been cancelled since Beijing advised citizens to avoid travelling there, according to figures from China Trading Desk, a market researcher that specialises in travel data.
Roughly 70 per cent of the drop comes from near-term departures being cancelled or delayed, while new bookings have not materialised, it said.
That is set to remove at least US$500 million in spending from Japan, though the figure could rise to US$1.2 billion, said its chief executive Subramania Bhatt.
His calculations are based on estimates that Chinese tourists spend over US$900 million a month, as well as data on Chinese overseas spending from UnionPay and other financial services companies.
Japan is facing a major hit at a delicate time for its economy after remarks by Prime Minister Sanae Takaichi that linked the use of military force in any Taiwan conflict with the potential deployment of Japanese troops.
The retaliation from Beijing, which has suspended seafood imports from its neighbour, threatens to ripple through Japan’s economically significant tourism sector, which counts China as its biggest source of visitors.
“We’re seeing a very sharp shock to Japan demand out of China,” Mr Bhatt said, noting that the fallout of the current spat may differ from previous times of diplomatic strain.
“The current notice explicitly discouraging trips to Japan is a noticeably stronger stance than we have seen in recent years.”
While there has been a raft of cancellations, some travellers are choosing to re-route their holiday plans.
Singapore and South Korea have seen new bookings increase by as much as 15 per cent over the last few days, while Thailand, Malaysia and Vietnam are heading for growth of as much as 11 per cent week on week, he said.
Tour operators are already acting on the advice to stay away. China Trading Desk estimates group and package tours account for up to half of the lost travel volume, with individual leisure trips making up as much as 22 per cent.
Most Chinese airlines, as well as Cathay Pacific Airways, are waiving cancellation fees on tickets to Japan, accelerating cancellations.
At least two state-owned Chinese travel agencies have scrapped group bookings that were made months in advance, in a move aimed at protecting them against potential losses amid policy uncertainty and shifting sentiment, Bloomberg News reported, citing people familiar with the matter.
Before the travel warning, China-Japan bookings through the end of 2025 were up as much as 25 per cent from the same period in 2024. With the cancellations, it is now running behind the pace of 2024.
Some of Japan’s most popular tourist destinations are bearing the brunt, with routes from Shanghai, Beijing and Guangzhou into Tokyo and Osaka accounting for the majority of cancelled travel plans, Mr Bhatt said.
Record tourism
Japan’s tourism sector has logged record growth in part due to Chinese travellers flocking to the country. They account for about one in four visitors annually and were responsible for around 27 per cent of total inbound consumption from July to September, spending about 240,000 yen (S$2,000) on average during their stays, according to government tourism data.
The weak yen has given a particular boost to high-end shopping demand.
Chinese luxury spending abroad was about 120 per cent of pre-pandemic levels in 2024 in the Asia-Pacific, especially in Japan, according to consultancy firm Bain & Co.
The current bout of trip cancellations may see luxury purchases drop as much as US$600 million in 2025, according to China Trading Desk.
With no sign of tensions easing, the risk of the diplomatic spat extending into the new year would deal a particularly heavy blow.
If mainland Chinese visitors continue to stay away through 2026, the cumulative hit could reach as much as US$9 billion, said Mr Bhatt.
Still, trip cancellations so far have been largely contained to the final weeks of 2025, and January bookings are stable.
“That suggests many travellers still hope the situation will ease by then,” he added. BLOOMBERG
