‘Limited alternatives’: why Japan will struggle to replace China’s tourists

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By Ralph Jennings

Published November 22, 2025

Japan will find it hard to replace the revenue lost if Chinese tourists keep avoiding the country amid a diplomatic row over Taiwan, a subsidiary of the data provider Fitch Solutions warned on Friday.

A sustained drop-off in visitor numbers from China would “significantly impact” Japan’s retail and tourism industries, as Chinese tourists were not only Japan’s largest source of overseas visitors but were also higher-than-average spenders, subsidiary BMI said in a research note.

In the short term, Japan’s tourism industry has “limited alternatives” and “will find it difficult to fill the gap left by Chinese tourists”, BMI said, adding that “airport duty-free shops and large department stores will suffer direct impacts”.

Tensions between China and Japan have escalated since early November, when Japanese Prime Minister Sanae Takaichi suggested that Tokyo could deploy military forces in the event of a conflict in the Taiwan Strait.

Beijing has since issued several travel warnings urging Chinese tourists to avoid Japan, while several Chinese airlines have offered full refunds for any Japan-bound flights until the end of the year.

By Monday, China’s airlines had received 491,000 cancellations on flights to Japan, according to an aviation industry analyst. A steep drop in Chinese tourists could cost the Japanese economy about 1.49 trillion yen (US$9.59 billion) over the next year, an economist at the Tokyo-based Nomura Research Institute estimated.

Chinese travellers in Japan spent an average of US$1,622 per person during the third quarter of 2025, higher than the average per capita spend of US$1,488 for international tourists visiting the country, according to BMI.

In the medium to long term, Japan might be able to partly offset any decline in Chinese tourism thanks to “incremental demand” from the United States, Australia, South Korea, Taiwan and Southeast Asia, BMI said.

“But a full recovery of the high-value retail structure driven by Chinese tourists is unlikely”, it added.

Travel industry sources, including a hotel operator in Japan, told the Post it was still too early to gauge the impact of the spat on airlines, booking agencies and accommodation providers.

Airlines would likely take a few weeks to adjust seating capacity to accommodate any lapse in bookings on China-Japan routes, said Mayur Patel, Asia head at the travel intelligence firm OAG Aviation.

He expected that by Christmas, Japan would have largely offset any temporary tourism losses through increased bookings from third countries and Chinese travellers who were undeterred by the political tensions.

Searches by Chinese travellers for trips to Singapore had risen about 15 per cent by November 18, compared with the previous week, said Subramania Bhatt, CEO of the travel marketing and technology firm China Trading Desk.

Singapore rated highly for family travel in China due to its proximity, safety and widespread use of the Chinese language, according to Bhatt. Trips to South Korea and tours of Malaysia, Singapore and Thailand were also popular with Chinese travellers, he added.