Opinion: China vs Japan – a geopolitical ‘rift’ set to re-wire Asia tourism in 2026

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By Subramania Bhatt

Published December 05, 2025

From a travel retail perspective, the China–Japan rift isn’t just a geopolitical story – it’s an abrupt re-wiring of where Chinese luxury and duty-free spend will land over the next 12–18 months.

In the space of days after Beijing’s mid-November advisory, Chinese travellers cancelled roughly 491,000 Japan-bound air tickets, about one-third of Chinese airline bookings to Japan. Our own data at China Trading Desk suggests that around 30% of the 1.44 million trips originally planned from mid-November to end-December have already disappeared, implying a loss of US$0.5–1.2 billion in Chinese spending by year-end. For travel retail in Japan – from airport duty-free to downtown department stores – that is a sudden, sharp hole in the P&L.

What makes this different from past dips is that capacity is being structurally pulled. Chinese authorities have asked airlines to keep reduced Japan schedules in place through March 2026, cutting about one-third of planned seats. According to recent flight data, Chinese carriers have already cancelled over 900 flights on 72 routes, with Kansai Airport the epicentre – 626 inbound flights scrapped, including 80 from Nanjing, 71 from Shanghai and 58 from Beijing. For the big duty-free boxes at Kansai, Narita and downtown Osaka, that means less Chinese footfall not just this winter, but potentially through next spring and beyond.

The good news, from a regional perspective, is that Chinese demand has not vanished – it has moved. Qunar data show South Korea has jumped to the top spot for Chinese outbound bookings, with Seoul the most searched city. Flight bookings to Thailand, Malaysia, Singapore, Vietnam and Indonesia have “increased substantially” in the same period. Chinese cruise lines are also stripping Japanese ports out of their itineraries and extending calls in Jeju, Incheon and Busan. For travel retailers, that translates into more Chinese shoppers flowing through Incheon, Jeju, Changi, Suvarnabhumi and KLIA – often with the same budgets they once reserved for Ginza or Shinsaibashi.

Two nuances matter for brands and landlords. First, the high-income segment is holding up best. Affluent Chinese travellers who still choose Japan are largely maintaining their luxury baskets; the problem for Japanese travel retail is volume, not basket size. Meanwhile, other high-spend customers are re-routing to Korea, Singapore or even Russia for winter and ski trips rather than downgrading their spend. Second, the shift is fastest in channels that can re-price and re-allocate inventory quickly: airport duty-free, cruise retail and major downtown flagships.

My view is that travel retail needs to treat this less as a shock and more as an accelerated rebalancing:

• For operators in Japan, the priority is yield per passenger. With fewer Chinese visitors, there’s even more pressure to convert non-Chinese travellers and to deepen spend from the high-end Chinese who still come – via better data capture, tailored offers and omnichannel selling that continues after they leave Japan.

• For Korea and Southeast Asia, this is an opportunity but also a stress test. Incheon, Jeju, Singapore and Bangkok should assume a structurally higher share of Chinese travel-retail spend for as long as the rift lasts. That means planning for capacity, Chinese-language service, digital payments and brand activations that used to sit in Tokyo or Osaka.

• For brands, the lesson is clear: don’t anchor your Asia travel-retail strategy to a single political relationship. Follow the Chinese traveller, not the old map – and be ready to pivot your assortments, campaigns and staff training as quickly as they pivot their flight bookings.