Japan Tourism Faces $1.2 Billion Hit as Trip Cancellations Spike on China Rift

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By K Oanh Ha

Published November 20, 2025

Japan could lose out on as much as $1.2 billion in visitor spending between now and the end of the year as would-be travelers from China cancel their trips due to a worsening diplomatic spat.

Around 30% of the 1.44 million trips to Japan from China planned through the end of December have been canceled since Beijing advised citizens to avoid traveling to their Asian neighbor, according to figures from China Trading Desk. Roughly 70% of the drop comes from near-term departures being canceled or delayed, while new bookings haven’t materialized, according to the market researcher that specializes in travel data.

That’s set to remove at least $500 million in spending from Japan, though the figure could rise to $1.2 billion, said Subramania Bhatt, chief executive office of China Trading Desk. His calculations are based on estimates that Chinese tourists spend over $900 million a month as well as data on Chinese overseas spending from UnionPay and other financial service companies.

Japan has been left 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 also suspended seafood imports from its neighbor, now threatens to ripple through its 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,” 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’s been a raft of cancellations, some travelers are choosing to re-route their holiday plans. Singapore and South Korea have seen new bookings increase as much as 15% over the last few days, while Thailand, Malaysia and Vietnam are heading for growth of as much as 11% week-on-week, according to Bhatt.

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%. Most Chinese airlines, as well as Cathay Pacific Airways Ltd., 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 that was aimed at protecting them against potential losses amid policy uncertainty and shifting sentiment, Bloomberg News has reported, citing people familiar with the matter.

Before the travel warning, China-Japan bookings through the end of the year were up as much as 25% from the same period last year, he said. With the cancellations, it’s now running behind last year’s pace. 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 canceled travel plans, Bhatt said.

Record Tourism

Japan’s tourism sector has logged record growth in part due to Chinese travelers flocking to the country. They account for about one in four visitors annually and were responsible for around 27% of total inbound consumption from July to September, spending about ¥240,000 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% of the pre-pandemic levels last year 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 $600 million this year, 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 $9 billion, said Bhatt.

Still, so far trip cancellations are largely contained to the final weeks of this year and January bookings are stable.

“That suggests many travelers still hope the situation will ease by then,” said Bhatt.