China’s 2026 Labour Day holiday runs as a five-day stretch from Friday May 1 to Tuesday May 5. With Japan’s inbound Chinese visitors plunging -60.7% YoY in January and -55.9% in March, how are hotel prices and inventory consumption actually moving in the four major regions most exposed to Greater China inbound demand: Osaka, Kyoto, Hokkaido, and Tokyo? Drawing on MetroEngines Research data, this article analyses sales prices and sold-out rates of plans during the Labour Day period (5/1-5/5) to verify how far the “-60%” shock has propagated through the market, and whether other markets centred on Korea and Taiwan are filling the gap.

The “-60%” Macro Backdrop: Only China is Falling, Korea and Taiwan are Accelerating

First, let us frame the inbound macro picture that underpins this discussion. According to estimates from the Japan National Tourism Organization (JNTO), Chinese visitors to Japan in January 2026 fell -60.7% YoY, and -55.9% in March, meaning a near-halving level has now persisted for three consecutive months. The backdrop is a combination of the Chinese government’s “travel restraint advisory” for Japan issued following Diet remarks in November 2025, and the rebound effect from the Lunar New Year calendar shift.

However, it would be premature to read this “China -60%” as a contraction of inbound overall. In the same March, Korea was up +15.0% YoY and Taiwan +24.9%, both setting new monthly records. Cumulative inbound visitors for January-March reached 10.68 million, +1.4% YoY, breaking the quarterly 10 million threshold for the second consecutive year. Structurally, this means that the negative from China is being completely absorbed by other markets centred on Korea and Taiwan: it is not a case of “inbound as a whole collapsing” but rather a phase of “portfolio reshuffling”.

Source: Compiled by HotelBank Editorial Team from JNTO “Visitor Arrivals to Japan (March 2026 Estimate)”

The popularity of Japan as a Labour Day overseas travel destination is also showing signs of change. According to a Labour Day travel survey released by Dragon Trail in April 2026, Japan held its position as the fifth most popular overseas destination, but the share of travellers planning to visit fell 4.4 percentage points from 9.5% the prior year. Against this demand backdrop, we examine the actual movements in sales prices and inventory consumption in the four areas most exposed to Greater China inbound demand: Osaka, Kyoto, Hokkaido, and Tokyo, using granular OTA published price data.

5-Day Labour Day ADR: Only Osaka Down -10% YoY, Other 3 Areas Firm

According to MetroEngines Research data, ADR (the average of publicly available sales prices, double occupancy, tax inclusive) during the Labour Day period (May 1-5, 2026) compared with the same period last year (May 1-5, 2025) is as follows. The survey covers approximately 5,975 properties across the four areas, with a price data set of around 2.3 million points.

Source: Compiled by HotelBank Editorial Team from MetroEngines Research / N(2026)=5,975 properties, ~2.3M data points; N(2025)=5,712 properties

What stands out first is that Tokyo, Kyoto, and Hokkaido all maintained solid YoY gains. Hokkaido’s average Labour Day ADR was ¥41,800 (+11.3% YoY), Kyoto ¥54,000 (+8.3%), and Tokyo ¥46,100 (+6.5%), all posting growth rates in the high single to low double digits. Three areas that one would naively expect to drop given the China -60% number are instead pushing rates higher. This can be interpreted as clear evidence in the price data of the substitution effect from Korea, Taiwan, Southeast Asia, and domestic demand discussed in the previous section.

On the other hand, Osaka alone averaged ¥35,900, down -10.0% YoY, the only one of the four areas in negative territory. Osaka is in a structurally weaker position because 2025 was during the Expo 2025 Osaka, Kansai (Japan International Exposition), with demand peaking from the overlap of Labour Day and Golden Week, while 2026 faces a strong post-Expo rebound. The evaporation of Greater China demand, combined with this Expo rebound, is pressing Osaka’s repricing strongly downward.

Source: Compiled by HotelBank Editorial Team from MetroEngines Research

Daily ADR Reveals When “Labour Day Demand” Arrives

Decomposing the 5-day Labour Day ADR by day brings into sharp relief the differing demand patterns by area. The first day of Labour Day, Friday 5/1, and the second day, Saturday 5/2, are presumed to be the peak of Labour Day arrival flights, with domestic Golden Week back-end departure demand also overlapping.

Source: Compiled by HotelBank Editorial Team from MetroEngines Research

Hokkaido posted ¥47,000 on Saturday 5/2 (+36.4% YoY) and ¥37,800 on Friday 5/1 (+21.4% YoY), showing standout strength on the first two days of Labour Day. While Hokkaido is often cited as having high Greater China dependence, including in winter peaks (Niseko etc.), the early-May green-season transition tends to bring more European-American FIT and other Asian markets, which may be giving prices their resilience. Kyoto was strongest on Saturday 5/2 at ¥59,600 (+33.5%), and held mid-holiday peaks at high prices: ¥60,700 on Sunday 5/3 (national holiday) and ¥56,100 on Monday 5/4 (national holiday).

Tokyo shows the same pattern. Saturday 5/2 surged to ¥53,300 (+32.6%), with high levels continuing through ¥51,800 on 5/3 (Constitution Memorial Day) and ¥46,900 on 5/4 (Greenery Day). On the other hand, Monday 5/4 (national holiday) and Tuesday 5/5 (national holiday) edged slightly negative YoY. This suggests that for the mid-to-late dates where the “Labour Day departure peak” overlaps with the “domestic Golden Week return leg”, domestic demand-side repricing was somewhat weaker.

Osaka was negative YoY on every day. In particular, Sunday 5/3 at ¥40,900 (-17.5%) and Monday 5/4 (national holiday) at ¥40,600 (-15.6%) saw the high mid-Golden Week peak drop sharply from the prior year. This is considered to be the rebound from a prior year period when Expo attendance was at its peak and sales were near full capacity. Meanwhile, Saturday 5/2 alone turned positive at ¥39,400 (+14.6%), like the other cities, suggesting that the overlap of the Labour Day kickoff with domestic demand had a limited but real effect.

Real Demand Through Sold-out Rates: All 4 Areas Hold Above 30%

Since ADR (sales price) reflects only the property side’s repricing decisions, the sold-out rate of sales plans (the share of plans that have stopped accepting reservations) serves as a complementary indicator of actual demand traction. Looking at sold-out rates by day during the Labour Day period, it becomes clear that the picture is not the simple “Chinese guests evaporated, inventory is sitting unsold” narrative for any of the four areas.

Source: Compiled by HotelBank Editorial Team from MetroEngines Research / Survey results as of 4/25

Hokkaido’s sold-out rate on Sunday 5/3 reached 42.0%, the highest level among the four areas. The mid-Golden Week period in Hokkaido is when domestic family travel and early-departure Labour Day arrivals overlap, and the fact that a 40%+ sold-out rate was achieved while ADR held +2.1% positive shows that price upward pressure is being firmly absorbed by the demand side. Tokyo also secured high levels of 40.0% on Saturday 5/2 and 36.5% on Sunday 5/3.

What deserves attention is Osaka. Despite ADR being -10% YoY (the only one of the four in negative territory), the sold-out rate held at 39.0% on Monday 5/4 (national holiday) and 33.4% on Sunday 5/3, on par with Tokyo and Hokkaido in terms of inventory consumption. In other words, Osaka is in a “lowering prices to fill rooms” state: covering the Greater China demand gap by lowering prices a notch to open inventory to domestic and other overseas markets. Against the dual factors of post-Expo supply surplus and the China collapse, this is a textbook case of repricing behaviour where the market draws back demand through price cuts.

Kyoto’s sold-out rate was 31.3% on the central day Sunday 5/3, relatively low among the four areas. This is likely because the area has a larger total number of sales plans than the other cities, and because Kyoto has the highest Labour Day ADR level at ¥54,000, meaning that with prices staying elevated, a certain absolute amount of “unsold inventory” is being generated. That said, since ADR has been maintained at +8.3%, the repricing strategy centred on affluent FIT can be evaluated as functioning well.

Reinforced by REIT Monthly Data: March Operations Trending Strong

Since actual occupancy rates of individual hotels cannot be captured from OTA published data, we reinforce the directional signal of actual conditions using monthly operations data disclosed by listed hotel REITs. Looking at monthly operating conditions for the most recent month nearest the Labour Day period (March 2026), the two REITs holding many accommodation-focused properties both maintained YoY gains.

Source: Compiled by HotelBank Editorial Team from each REIT’s monthly operations data (March 2026 actuals)

Japan Hotel REIT Investment Corporation (8985)’s March 2026 portfolio-wide actuals were occupancy rate 85.1% (+3.1 pp YoY), ADR ¥20,800 (+5.0%), and RevPAR ¥17,700 (+9.0%). Invincible Investment Corporation (8963) posted occupancy 87.6% (+2.8 pp), ADR ¥14,500 (+6.0%), and RevPAR ¥12,700 (+9.0%) – both posting solid gains in occupancy and rates.

These two REITs hold their main properties in Osaka, Kyoto, Tokyo, and Hokkaido, giving them portfolio compositions that would normally be highly susceptible to Greater China inbound accommodation demand impact, yet as of March they were growing both occupancy and rates. The single-month impact of China -60% has been absorbed at the portfolio level, and we can confirm that the sustained high occupancy from 2025 and continued rate repricing remain ongoing at the REIT level. Operating conditions for individual properties heading into the Labour Day period will be progressively revealed in April monthly disclosures, but the directional signal as of March is consistent with this article’s OTA published price analysis.

*REIT portfolios are nationally diversified, so these results do not reflect performance only in Osaka, Kyoto, Tokyo, and Hokkaido. These figures should be referenced merely as an indicative gauge of “the single-month repricing direction of the hotel industry as a whole”. Other Japanese listed hotel-related REITs include Ichigo Hotel REIT Investment Corporation (3463), Japan Hotel & Residential Investment Corporation (3472), Kasumigaseki Hotel REIT Investment Corporation (401A), Hoshino Resorts REIT Investment Corporation (3287), and Mori Trust REIT Investment Corporation (8961).

Conclusion: “-60%” is Real, But Only Osaka Shows it in Prices

Let us summarise the conclusions drawn from OTA published price data for the Labour Day period (May 1-5, 2026).

First, the macro figure of “-60%” for inbound Chinese visitors is real. JNTO’s March estimate is -55.9%, January -60.7%, with the half-level having now persisted for three consecutive months. The Labour Day travel survey also shows Japan’s preference rate down 4.4 percentage points YoY. This fact itself cannot be denied.

Second, however, the Labour Day period ADR for the four areas with high Greater China exposure showed only Osaka at -10.0%, while Tokyo, Kyoto, and Hokkaido remained positive at +6.5% to +11.3%. The rises in three areas show that the substitution from other Asian markets such as Korea (March +15%) and Taiwan (March +24.9%), combined with domestic and European-American demand, is sufficiently absorbing the China-share capacity. On the Labour Day kickoff Saturday 5/2, ADR rose more than +30% YoY in three areas (Tokyo, Kyoto, and Hokkaido).

Third, Osaka’s -10% is not a sole effect of the China decline, but a result of “the Expo 2025 Osaka, Kansai rebound” and “the Greater China dependence structure” overlapping in a double whammy. Sold-out rates were rather firm at 33-39% on 5/3-5/4, indicating a “filling by lowering prices” state in which domestic and other Asian demand is being captured by reducing rates.

So, the answer to “Is the China -60% during Labour Day real?” becomes: “Yes, on a head-count basis, but the propagation to lodging rates varies hugely by region.” Even with high Greater China dependence, areas where Korea/Taiwan/Southeast Asia/domestic substitution demand is functioning have been able to maintain rates above the prior year, and the direct impact of the market reversal is limited to Osaka, where the Expo rebound overlaps. The focus going forward will be on whether this “China decline absorbed by other markets” scenario continues, as confirmed by on-the-ground data during the Labour Day period and monthly REIT disclosures from May onwards.

References / Sources:
· JNTO “Visitor Arrivals to Japan (March 2026 Estimate)”
· JNTO Inbound Visitor Statistics
· Japan Tourism Agency, Tourism Statistics & White Papers
· Honichi Lab “Japan Ranked 5th in China’s Labour Day Overseas Travel Destinations” (April 2026)