Japan Tourism Spending Hits Record High Amid Labor Shortages

Japan welcomed a record 42.68 million international visitors in 2025, while inbound tourism spending approached the ¥10 trillion mark for the first time. As travel demand continues to surge, however, the country’s accommodation sector faces mounting challenges, including labor shortages and productivity constraints. The Japanese government plans to address these issues through digital transformation (DX), generative AI adoption, and improved working conditions to support the sustainable growth of the tourism industry.

TOKYO, JAPAN (MERXWIRE) – Japan’s Tourism Agency has released its 2026 Tourism White Paper, revealing that the country welcomed 42.68 million international visitors in 2025, up 15.8% from the previous year and the highest figure on record. Inbound tourism spending also reached a record ¥9.4549 trillion, an increase of 16.4% year-on-year, underscoring the sector’s continued expansion beyond pre-pandemic levels.

The report noted that while Asian markets remain a major source of visitors, the share of travelers from Europe, North America, and Oceania has steadily increased, reflecting a more diversified inbound tourism market.

The tourism boom has also fueled domestic travel. In 2025, Japanese residents made approximately 550 million domestic trips, generating ¥26.8 trillion in travel spending. Combined domestic, inbound, and outbound tourism consumption totaled ¥37.6 trillion, another record high that highlights the strong recovery of Japan’s travel sector.

Despite these positive results, the White Paper identified labor shortages as one of the most pressing issues facing the tourism industry. Foreign visitor overnight stays reached a record 177.87 million nights in 2025, yet roughly 70% of accommodation operators reported staffing shortages. Many businesses have been forced to reduce services or postpone expansion plans due to insufficient manpower. Increased workloads during peak periods remain a common concern across the sector.

According to the Tourism Agency, wages in the accommodation industry continue to lag behind the national average, while annual leave remains comparatively limited. The sector also relies heavily on non-regular employees, making recruitment and retention increasingly difficult. In addition, labor productivity in the accommodation industry remains only about 70% of the average across all industries, partly due to limited investment in workforce training and digital technologies.

To strengthen competitiveness, the government is accelerating tourism DX initiatives and the adoption of generative AI. The White Paper highlighted several successful examples, including the city of Atami in Shizuoka Prefecture, which uses generative AI to analyze overseas social media trends and traveler preferences, significantly reducing market research time while improving multilingual marketing efforts. Meanwhile, a hotel in Gamagori, Aichi Prefecture, has improved profitability and employee satisfaction through scheduled closure days, multi-skilled workforce training, and high-value service offerings.

The Tourism Agency stated that future policies will focus on regional tourism promotion, digital transformation, labor-saving investments, and workforce development. Efforts will also be made to address overtourism-related issues such as congestion and visitor etiquette, while improving accessibility and maintaining a balance between tourism growth and residents’ quality of life.

In addition, Japan raised its International Tourist Tax from ¥1,000 to ¥3,000 per traveler in July 2026. The additional revenue will be invested in regional tourism development, transportation infrastructure, smart tourism initiatives, and overtourism management measures as part of the government’s goal of attracting 60 million international visitors and generating ¥15 trillion in tourism spending by 2030.

The continued growth of Japan’s tourism industry is also shaping visitor experiences. Ms. Lin, a traveler from Taiwan who visits Japan almost every year, said she has noticed a significant increase in the number of foreign visitors compared with previous trips.

“Popular destinations are definitely more crowded now, but transportation, accommodations, and public facilities remain well organized,” she said. “Many hotels have introduced self-check-in systems, and multilingual services are more widely available than before. Traveling around Japan is still very convenient, although reservations at popular restaurants often need to be made well in advance.”

Michael Schmidt, a visitor from Germany, said Japan’s efficient transportation network, clean urban environment, and high-quality service continue to make the country an attractive destination.

“I noticed that hotel and restaurant staff seem busier than before, and many businesses have introduced self-service technologies such as automated check-in systems and digital ordering,” Schmidt said. “I believe technology can reduce workloads while maintaining service quality, which benefits both travelers and tourism operators.”

The Consumer Aesthetics and Cultural Tourism Society Japan noted that the country is entering a new phase of tourism development, shifting from a focus on visitor numbers to an emphasis on the quality of travel experiences.

“As inbound tourism continues to reach record levels, the key challenge will be maintaining high-quality services while ensuring sustainable tourism and preserving residents’ quality of life,” the organization said.

The association also observed that international travelers are increasingly seeking cultural immersion, local cuisine, traditional crafts, nature-based experiences, and sustainable tourism rather than conventional shopping-focused itineraries. It recommends that local governments and tourism operators leverage AI, big data, and smart tourism technologies to encourage travelers to explore regional destinations, easing pressure on overcrowded hotspots while generating broader economic benefits.

Furthermore, the association suggested that accommodation providers continue improving employee compensation and workplace conditions while adopting technologies such as self-check-in systems, multilingual customer support, AI-powered translation tools, and digital tour services. These measures would allow frontline staff to focus on delivering personalized hospitality experiences.

By combining local cultural assets, high-quality travel experiences, and smart tourism strategies, Japan can move closer to achieving its 2030 tourism goals while building a sustainable tourism model that balances economic growth, cultural preservation, and community well-being.

Media Contacts:
The Consumer Aesthetics and Cultural Tourism Society Japan

PR Agency:
MERXWIRE INC.
Ada Huang
pr@merxwire.com

SOURCE: The Consumer Aesthetics and Cultural Tourism Society Japan