Japan’s inbound tourism momentum showed signs of strain in January 2026, as the continued absence of Chinese tourists significantly impacted overall visitor numbers and spending patterns.

While Japan remains one of Asia’s most attractive destinations, industry data and regional reporting suggest that the recovery remains uneven — particularly in high-spend segments traditionally dominated by mainland Chinese travelers.

Chinese Outbound Weakness Still a Drag

According to regional tourism data and industry commentary, arrivals from mainland China remain well below pre-pandemic peaks. Before 2020, Chinese tourists represented Japan’s single largest inbound market and were the biggest contributors to retail and duty-free spending.

In January 2026:

• Overall inbound numbers softened month-on-month.

• High-spend retail corridors such as Ginza and Shinsaibashi reported lower luxury footfall.

• Average per-visitor spending dipped in categories historically favored by Chinese travelers (luxury goods, cosmetics, electronics).

While visitors from South Korea, Taiwan, Southeast Asia and the United States helped cushion the decline, they have not fully replaced the spending power previously driven by Chinese tour groups and high-end independent travelers.

Retail, Luxury & IR Exposure

The impact is particularly visible in:

• Department stores and duty-free operators

• Luxury boutiques in Tokyo and Osaka

• Regional destinations reliant on group tours

For Japan’s integrated resort (IR) ambitions — especially developments in Osaka — the absence of Chinese outbound momentum carries strategic implications.

Unlike Macau, where premium mass remains anchored to Greater China flows, Japan’s tourism strategy is built on diversification. However, Chinese visitors historically delivered outsized contribution in:

• Retail spend

• Premium accommodation

• High-end entertainment consumption

This creates a recalibration moment for future IR operators planning capital deployment and marketing strategies.

Implications for Japan’s IR Strategy

Japan’s flagship IR development in Osaka — led by a consortium including MGM Resorts International — is structured around long-term diversification rather than pure gaming reliance.

Key strategic questions now include:

• Will Japan pivot more aggressively toward Southeast Asian and US VIP segments?

• Can non-gaming attractions offset Chinese retail softness?

• How resilient is the IR financial model without a full mainland rebound?

For policymakers, the situation reinforces the importance of:

• Diversified source markets

• Aviation partnerships

• Premium tourism branding

• Domestic tourism integration

Regional Context

Compared to:

• Macau, which has seen premium mass resilience supported by Chinese travel normalization.

• Singapore, where high-yield visitation remains stable due to diversified visitor mix.

Japan’s tourism trajectory remains promising — but not yet fully normalized.

Industry Takeaway

From a regional gaming and hospitality perspective, January’s data serves as a reminder:

Recovery is not uniform across Asia.

For investors, developers and IR policymakers, the absence of Chinese travelers is not merely a tourism statistic — it is a revenue mix recalibration factor that could shape capital allocation decisions across 2026–2027.

Japan’s long-term fundamentals remain strong. However, the short-term recovery curve will likely depend on when — and how strongly — mainland Chinese outbound travel reaccelerates.