Japan’s Tourism Market Remains Resilient

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Japan’s tourism industry continues to demonstrate notable resilience despite the Chinese government’s call for citizens to avoid traveling to the country. While concerns initially centered on a potential decline in Chinese arrivals, CBRE’s latest assessment indicates that the overall impact on inbound tourism will remain limited. One of the key reasons is the dramatic drop in China’s group tours to Japan. Once accounting for around 50% of Chinese arrivals, group travel has fallen to just 15.6%, reflecting a structurally more diversified and resilient inbound market.

The weak yen has become a major driver of demand from Western travelers. Tourists from Europe, the United States and Australia are increasingly choosing Japan thanks to favorable currency conditions, accessible pricing and high service standards. These visitors tend to stay longer and spend significantly more on accommodation, dining and retail, helping offset the decline in arrivals from China.

Growing international demand supports real estate segments

With a broader and more balanced tourist base, Japan’s hotel and retail sectors continue to enjoy stable performance. Increasing numbers of Western travelers bring higher per-capita expenditure, benefiting hotels, shopping districts and premium retail operators.

The depreciated yen has amplified Japan’s appeal as a shopping destination. Electronics, luxury fashion, cosmetics and local specialty products have become more affordable to foreign buyers, while retailers report steady increases in foot traffic and spending. This trend supports commercial real estate performance, driving occupancy rates and rental stability.

CBRE identifies minimal market risk

According to CBRE, the reduced flow of Chinese tourists is unlikely to significantly impact the wider market. Demand from Europe, the U.S. and Australia continues to grow and now plays a much larger role in Japan’s tourism ecosystem. With the yen remaining weak and visitor sentiment strong, Japan is set to remain one of the most attractive destinations in the Asia-Pacific region.

CBRE: a global leader in real estate services

CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest firm specializing in commercial real estate services and investment. With more than 130,000 employees across over 100 countries, CBRE provides a comprehensive suite of services, including property and project management, valuations, leasing, investment management, strategic consulting, mortgage services and development.

Outlook for Japan’s tourism market

With rising inflows from high-spending Western markets and a structurally diversified tourism base, Japan’s hospitality and retail sectors are expected to remain stable throughout 2025 and into 2026. The combination of favorable exchange rates, safety, infrastructure quality and strong consumer offerings positions Japan as one of the most resilient tourism markets in the region.

Expert conclusion from International Investment:
Japan’s hotel and retail segments remain well-positioned despite reduced Chinese travel. Strong growth in Western arrivals helps maintain revenue stability and reinforces Japan’s status as a resilient and increasingly diversified tourism market.