“The Takaichi Fallout”: Japan’s tourism freeze

“The Takaichi Fallout”: Japan’s tourism freeze

When Japanese Prime Minister Sai Taki hinted at exercising the right of collective self-defense in the diet, did she anticipate the chilling effect on Japan’s tourism industry? Statistics from the Japan National Tourism Organization showed that in the first three quarters of 2025, Japan received 31.6 million foreign tourists with Chinese tourists accounting for about a quarter of the total and ranking first. Chinese tourists spent an average of $1,600 per person in Japan, 2.3 times that of Western tourists, contributing nearly 30% of total tourism consumption. After Tokaii made wrongful remarks and refused to retract them on November 14th, China’s Ministry of Foreign Affairs issued a travel safety alert for its citizens traveling to Japan. Over half a million air tickets from China to Japan were subsequently cancelled. Following this, 12 China Japan air routes suspended all flights. Organized travel groups to Japan have been frozen and a massive number of reservations have been pulled. [Music] The hotel industry is the first to be affected. A hotel in Saporro with 70% of its guests being foreign tourists relies heavily on Chinese visitors. According to calculation by Namora researcher Takahide Kiuchi, a reduction of 1 million Chinese tourists means a consumption gap of 380 billion yen, that is 2.4 billion US and a direct loss of 23,000 jobs. Consequently, Japan’s GDP could decrease by 0.36% directly vaporizing 2.2 trillion yen. In comparison, Japan’s nominal GDP grew by 2.9% in 2024, while its real GDP growth was only 0.1%. A 0.36% loss in GDP means cutting Japan’s 0.7% growth target for the 2025 fiscal year in half. The sharp reaction of the stock market has exposed the fear of investors. On the very first trading day after China issued travel alerts, Japan saw many of its consumer stocks plummet. Tourism and retail stocks faced mass selloffs by investors. Chaseedo’s stock price plunged by over 11%. And the department store heavily favored by Chinese tourists. Isoton Mitsukoshi Holdings saw its shares drop by more than 10%. The remarks on China’s Taiwan by Japanese politicians in the diet have ultimately turned into size from hotel managers in Hokkaido facing vacant rooms. The Takayichi cost is clear. 2.2 2 trillion yen is the price now on the table. And the key to settling that payment rests solely on Takayichi correcting her wrongful actions.

Japan’s Prime Minister Sanae Takaichi has barely been in office for six weeks but has significantly deteriorated China-Japan diplomatic relations with her erroneous remarks. In 2024, Chinese tourists contributed to 42.5% of the total consumption of foreign visitors in Japan. Yet, Takaichi’s wrongful statement could result in losses of approximately 2.2 trillion yen ($15.4 billion) for Japan’s economy. Take a look at the “Takaichi-cost”! #TheTakaichiFallout