Chinese tourist cancellations for Japan's Lunar New Year surge past 50% as diplomatic tensions prompt Beijing to discourage travel, forcing Japanese retailers to pivot toward Southeast Asian markets.
Chinese tourist cancellations for Japan's Lunar New Year holiday have surged past 50%, creating significant disruption in Japan's tourism industry as diplomatic tensions between Tokyo and Beijing intensify.
According to data from hotel reservation platform Tripla, cancellation rates for hotel bookings made from China for the nine-day Lunar New Year period reached 53.6%, a 14.9 percentage point increase from the same period in 2025. Overall cancellation rates across all markets stood at 25.1%.
Hotel Industry Impact
The decline is particularly acute in Osaka, where Chinese guests at central hotels have fallen to just 8% of occupancy this January, down from nearly 30% in 2025. Revenue has dropped approximately 10%, with hotel representatives noting that "room prices are falling across Osaka hotels, depressing revenues."
An inn near Osaka's Dotonbori district reported only 76% of rooms booked for the holiday period as of Tuesday, February 18, 2026.
Flight Reductions
Air travel between Japan and China has seen substantial reductions. Flights during the Lunar New Year period are down 31% compared to 2025, with available seats shrinking 26%, according to British aviation analytics firm Cirium. The decline is especially pronounced at western Japan airports, with Kansai International Airport experiencing a 60% year-over-year drop in passenger flights connecting to China in January.
Diplomatic Context
The tourism downturn follows Japanese Prime Minister Sanae Takaichi's November 2025 comments regarding a potential Taiwan crisis, which angered Beijing. China has since repeatedly urged its citizens to avoid traveling to Japan.
A Tripla representative suggested that some travelers may be canceling after facing flight cancellations and significant airfare increases, compounding the diplomatic factors.
Economic Impact
Chinese travelers accounted for 21% of foreign visitors to Japan in 2025 and commanded 20% of all travel spending, the largest share among international tourists. Sompo Institute Plus senior economist Masato Koike predicts the number of Chinese tourists during the Lunar New Year period will fall by half compared to 2025.
Koike estimates this will decrease spending by 48.5 billion yen ($317 million), depressing Japan's nominal gross domestic product by 0.01%.
Shifting Travel Preferences
Japan has dropped to third place as the preferred overseas travel destination for Lunar New Year, chosen by only 15% of respondents in a January survey from Tokyo-based IntaSect Communications. Southeast Asia and South Korea now occupy the top two spots at 39% and 17%, respectively.
The survey, conducted on WeChat among 2,869 people living in China, marks a significant shift from 2025 when Japan was the top destination for both the Lunar New Year and National Day holidays.
Retail Sector Response
Japanese retailers are actively pivoting to offset the decline in Chinese visitors. Preliminary estimates for January duty-free sales at department stores run by Isetan Mitsukoshi, Takashimaya, and Daimaru Matsuzakaya all showed declines exceeding 10% compared to the previous year.
Takashimaya has begun issuing VIP cards to high-value clients at Thai and Vietnamese locations, providing priority access for processing tax-free purchases in Japan. Tsuruha Group estimates duty-free sales will shrink roughly 10% during the Lunar New Year holiday and is rearranging product displays and changing language options to appeal to Southeast Asian and Western tourists.
Bic Camera, despite a 40% year-over-year decline in duty-free sales to Chinese customers in December, achieved record overall sales by expanding its selection of general merchandise and non-electronic goods popular among Southeast Asian and Western visitors.
Southeast Asian Tourism Growth
Preliminary data from the Japan National Tourism Organization shows approximately 330,000 travelers from China visited Japan in December 2025, down 45% year-over-year. This was far outstripped by the 650,000-plus visitors from six key Southeast Asian countries—Thailand, Singapore, Malaysia, Indonesia, the Philippines, and Vietnam—representing a 14% increase.
Sony Financial Group senior economist Takayuki Miyajima predicts the decline in Chinese visitors will likely continue until at least mid-2026, noting that this shift "will help diversify inbound tourists, prompting a structural change in the inbound tourism market."
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