Japan risks losing nearly 40 billion baht as Chinese tourists cancel trips amid diplomatic tension

Escalating diplomatic tensions between China and Japan are hitting Japan’s tourism sector hard, with mass cancellations by Chinese travellers threatening to wipe out up to USD 1.2 billion in revenue by the end of this year. Meanwhile, Chinese tourists are rapidly shifting their travel plans to Thailand, Singapore, South Korea, Malaysia and Vietnam, which are already seeing a sharp surge in new bookings.

According to a Bloomberg report, data from China Trading Desk shows that around 30% of the 1.44 million scheduled Chinese trips to Japan from now until late December have already been cancelled. This followed Beijing’s travel advisory urging Chinese citizens to avoid travelling to Japan amid worsening political friction.

Around 70% of the decline has come from last-minute cancellations or deferrals, with the firm noting that “new bookings have virtually collapsed.”

Losses could reach USD 1.2 billion this year

Subramania Bhatt, CEO of China Trading Desk, said the cancellations alone would cost Japan at least USD 500 million (around 16 billion baht) and could rise to USD 1.2 billion (39 billion baht) depending on how the situation unfolds.

His calculation is based on Chinese tourists’ overseas spending patterns, which regularly exceed USD 900 million per month, drawing from UnionPay transaction data and other financial-service providers.

Diplomatic rift at a sensitive moment for Japan

The cancellations come at a particularly fragile time for Japan’s economy. The rupture followed comments by Prime Minister Sanae Takaichi, who said Japan might consider military deployment in the event of a Taiwan crisis—prompting an angry response from Beijing. China has already suspended imports of Japanese seafood, and now tourism—one of Japan’s most important industries—is being dragged into the fallout.

“We are seeing Chinese travel demand to Japan plunge suddenly,” Bhatt said, calling the travel advisory the “strongest stance in years” taken by Beijing.

Despite the cancellations, many Chinese tourists are not abandoning travel altogether—they are changing destinations.

According to booking data:

• Singapore and South Korea saw up to a 15% jump in new bookings in recent days.
• Thailand, Malaysia and Vietnam saw increases of up to 11% week-on-week.

This shift is expected to benefit Thailand significantly during the high-season period.

Hotels in Japan report immediate impact

Japanese media report that hotels are already feeling the strain:

Gamagori Hotel in Aichi prefecture, which relies on Chinese guests for 60% of its bookings, saw 28 tour groups (about 1,000 people) cancel their November stays.

Sapporo Stream Hotel, which normally hosts around 3,000 Chinese guests per month, reported about 40 cancelled room-night bookings, equating to losses of around 800,000 yen (160,000 baht).

Before the travel warning, bookings for Chinese trips to Japan through the end of the year were running 25% higher than the same period last year. Now, with widespread cancellations, bookings are below last year’s levels, particularly on popular routes from Shanghai, Beijing and Guangzhou to Tokyo and Osaka.

Risk of prolonged economic fallout

Analysts warn that if Chinese travellers continue avoiding Japan into 2026, cumulative losses could reach USD 9 billion (approximately 290 billion baht).

For now, most cancellations are concentrated in the remaining weeks of 2025, while bookings for January 2026 appear stable—suggesting many travellers remain hopeful that tensions may ease soon.

“That shows many people expect the situation to stabilise by the new year,” Bhatt said.

Source: Bloomberg