The “Accommodation Travel Statistics Survey 2025 Annual Figures (Preliminary)” released by the Japan Tourism Agency on February 27, 2026, may appear at first glance to be an unremarkable result showing a slight overall decline. Total guest nights reached 653.48 million, a year-over-year change of -0.8%. However, the breakdown tells a story of tectonic shifts in the industry. Domestic guest nights fell -3.8% YoY for the second consecutive year of decline, while foreign guest nights surged +8.2% to a new all-time high. This article cross-references the survey’s microdata with operational results from major hotel REITs to quantitatively dissect what this structural change of “slight overall decline but foreign growth offsetting domestic contraction” means for hotel operations on the ground.

1. 2025 Full-Year Headlines: Domestic -3.8%, Foreign +8.2%, Foreign Share Hits Record 27.2%

Let us begin with the overall picture. Total guest nights for full-year 2025 reached 653.48 million, a marginal decline of -0.8% YoY. While this figure appears largely flat on the surface, the breakdown reveals a dramatically different picture. Domestic guest nights totaled 475.61 million (-3.8% YoY), a clear contraction, while foreign guest nights reached 177.87 million (+8.2% YoY), setting a new all-time record. In other words, 2025 can be defined as “the year foreign demand partially offset the decline in domestic demand.”

The foreign share of total guest nights reached 27.2%, far exceeding 19.4% in 2019 and 19.1% in 2023. This means Japan has entered an era where more than one in four people checking into hotels and ryokan nationwide is a foreign visitor. This structural change should not be viewed merely as an extension of the inbound recovery — it is critical to note that a clear retreat in domestic demand is occurring simultaneously on the opposite side.

Source: Japan Tourism Agency “Accommodation Travel Statistics Survey” 2025 Annual Figures (Preliminary), compiled by HotelBank Editorial Team

2. Prefecture-Level Drill-Down: Tokyo Domestic -12.0%, Okinawa Foreign +25.2%

Behind the national average lies significant variation across prefectures. Particularly notable is Tokyo, where domestic guest nights recorded a double-digit decline of -12.0% YoY. Meanwhile, Tokyo’s foreign guest nights saw only a modest increase of +4.9%, resulting in an overall -3.3%. In other words, Tokyo can fairly be characterized as “a city where domestic travelers are rapidly departing.” The background factors include persistently high room rates and price aversion among domestic travelers.

In contrast, Hokkaido saw domestic nights decline -4.9% while foreign nights surged +24.3% in double digits, securing an overall +1.8% gain. Okinawa recorded domestic -3.0% and foreign +25.2%, for an overall +3.2%. The contrast between “regions where foreign demand more than compensated for domestic decline” and “urban areas where it could not” is strikingly clear. Kyoto saw domestic nights plummet -11.9%, second only to Tokyo, but foreign growth of +10.7% cushioned the blow, limiting the overall decline to -0.7%.

A noteworthy finding is that the prefectures with the highest foreign guest growth rates were, surprisingly, rural areas such as Tottori (+68.0%), Niigata (+55.3%), and Mie (+54.3%). The Japan Tourism Agency’s announcement also confirms this pattern: the three major metropolitan areas saw only +4.9% growth, while regional areas recorded +15.5%, corroborating the accelerating dispersal of inbound demand to regional Japan.

Source: Japan Tourism Agency “Accommodation Travel Statistics Survey” 2025 Annual Figures (Preliminary), compiled by HotelBank Editorial Team

3. Monthly Trends: Every Month Negative in H2 2025, Seasonal Peak Structure Has Changed

Comparing monthly data side by side with 2024 reveals that 2025 showed distinctly different patterns in the first and second halves. The first half (January-June) started strong with January at +7.4%, but from February onward fluctuated within a range of -1.6% to +2.3%. The problem emerged in the second half: from July onward, every month turned negative YoY, with the deteriorating trend becoming pronounced at -3.6% in September, -3.7% in November, and -4.2% in December.

The primary driver of this downward trend was the deceleration in domestic guest nights. Domestic numbers were negative or flat across every month of the year, particularly running in the -1.5% to -5.0% range during the July-December period. Meanwhile, foreign guest nights showed strong growth of +14.5% to +35.2% in the first half, but decelerated sharply to +1.3% to +3.8% in the second half. This is attributable to the high base effect from the prior year (2024). In other words, while the absolute level of inbound remains high, growth rates should be interpreted as entering a deceleration phase.

August 2025 saw an overall -0.4%, with domestic at -1.5% and foreign at +3.8%, highlighting the weakness of domestic demand during the summer vacation period. Domestic numbers going negative in August — which includes the Obon holiday — is an important signal suggesting a contraction in the breadth of domestic travel.

Source: Japan Tourism Agency “Accommodation Travel Statistics Survey” 2024-2025 Monthly Data, compiled by HotelBank Editorial Team

4. Occupancy by Property Type: Business Hotels 75.3% vs. Ryokan 38.4% — A Polarized Market

Next, let us examine the operational reality through occupancy rates. The full-year 2025 room occupancy rate improved to 61.8% overall, up +2.2 percentage points YoY, but the contrast by property type remains substantial. Business hotels maintained high occupancy at 75.3% (+1.6pt YoY) and city hotels at 74.2% (+1.9pt), while ryokan (traditional Japanese inns) remained below the 40% threshold at 38.4% (+2.3pt). Resort hotels registered 56.9% (+2.8pt) and guesthouses 29.6% (+0.6pt).

A notable point is that Osaka maintained its position as the national leader in overall occupancy at 78.8%. Osaka’s business hotel occupancy was 83.0% and city hotel occupancy 79.4%, operating at near-full capacity. Even as the city braces for post-Expo 2025 effects, supply-demand conditions remain tight. In contrast, rural prefectures with tourist and hot spring destinations such as Nagano (39.9%), Yamanashi (44.7%), and Niigata (46.4%) continue to see occupancy below the national average.

What emerges from this data is a widening occupancy gap between “urban business hotels and city hotels with channels to capture inbound demand” and “regional ryokan and resort hotels dependent on domestic travel demand.” Ryokan occupancy was 39.6% in 2019 and 38.4% in 2025 — essentially unchanged over six years. This fact needs to be understood not as a temporary demand issue but as a structural problem.

Source: Japan Tourism Agency “Accommodation Travel Statistics Survey” 2025 Annual Figures (Preliminary), compiled by HotelBank Editorial Team

5. REIT Data Reveals Operational Reality: 85%+ Occupancy and Diverging Pricing Strategies

From here, we use monthly operational results from listed hotel REITs to examine the operational reality at a higher resolution. The analysis covers seven REITs: Ichigo Hotel REIT (3463), Invincible Investment (8963), Nippon Hotel & Residential Investment (3472), Japan Hotel REIT Investment (8985), Hoshino Resorts REIT (3287), Mori Trust REIT (8961), and Kasumigaseki Hotel REIT (401A).

As of February 2026, occupancy rates for each REIT were: Nippon Hotel & Residential 86.8%, Ichigo Hotel REIT 86.7%, Invincible 86.6%, and Japan Hotel REIT 85.2% — all four midscale/business hotel-focused REITs maintaining occupancy above 85%. In contrast, the resort/luxury-oriented Hoshino Resorts REIT and Kasumigaseki Hotel REIT posted 76.5%, while Mori Trust REIT with its high share of large resort properties stood at 71.1%.

However, the hierarchy reverses when viewed through ADR. Mori Trust REIT led at ¥31,102, followed by Kasumigaseki Hotel REIT at ¥26,304, Nippon Hotel & Residential at ¥25,001, and Hoshino Resorts REIT at ¥20,771 — clearly demonstrating the rate premium of the resort/luxury segment. In contrast, business hotel-centric Ichigo Hotel REIT was at ¥10,650 and Invincible at ¥13,473. On a RevPAR (revenue per available room) basis, Mori Trust REIT at ¥22,339, Nippon Hotel & Residential at ¥21,239, and Kasumigaseki Hotel REIT at ¥20,100 formed the top tier, demonstrating that pricing strategy directly translates to RevPAR leadership.

The key insight is that segments with high foreign guest ratios have room for further ADR increases, while segments with high domestic guest ratios are prioritizing occupancy maintenance as their primary strategy. Japan Hotel REIT Investment (8985) projected RevPAR growth of +8.9% YoY in its full-year forecast for the December 2025 fiscal period, with distribution per unit expected to reach a new all-time high since listing.

Source: Monthly operational data from each REIT, compiled by HotelBank Editorial Team

6. Why Are Domestic Travelers Declining? The Triple Squeeze of Prices, Wages, and Demographics

The decline in domestic guest nights is not a one-year anomaly but the result of intertwined structural factors. The first factor is the surge in accommodation prices. According to analysis by the Japan Research Institute, current accommodation costs have risen to approximately 1.3 times pre-COVID levels, and price increases are being cited as a potential drag on domestic demand. Rising accommodation costs amid stagnant real wages effectively mean that travel is “becoming a luxury” for domestic travelers.

The second factor is price competition with inbound demand. In major tourist cities like Tokyo and Kyoto, foreign visitors’ willingness to pay exceeds that of domestic travelers, and hotels are optimizing their inventory allocation and pricing toward higher-spending inbound guests. As a result, domestic guest nights in Tokyo plummeted -12.0% YoY. Kyoto saw a -11.9% decline. In urban areas, it is less that domestic travelers are “not being chosen” and more that they are “choosing not to stay.”

The third factor is demographics. The 50-60 age demographic — the core of travel demand — has entered a declining phase, and disposable income among younger generations remains stagnant. JTB Tourism Research & Consulting’s 2025 outlook projected travel numbers at 102.7% of the prior year, but the full-year accommodation statistics came in at -3.8%, significantly undershooting initial expectations. This suggests that price factors eroded travel demand beyond what had been anticipated.

Source: Japan Tourism Agency “Accommodation Travel Statistics Survey,” Cabinet Office “Consumer Price Index,” and others, compiled by HotelBank Editorial Team

7. Key Issues for 2026: Methodology Changes and Statistical Discontinuity

An important point for industry stakeholders is that starting with the January 2026 survey, the Japan Tourism Agency changed its survey stratification criteria from “number of employees” to “number of rooms.” Previously, survey forms were stratified into three tiers by employee count, but from 2026 onward they will be classified by room count (Form No. 1: 1-19 rooms, Form No. 2: 20-199 rooms, Form No. 3: 200+ rooms). The Agency itself explicitly notes that “year-over-year comparisons may be affected by the methodology revision,” and any interpretation of 2026 figures should assume structural noise is embedded in the data.

The greatest impact is expected for properties with few employees but many rooms (such as lean-staffed business hotels) and conversely, properties with few rooms but many employees (such as upscale ryokan). These weighting changes could create discontinuities in year-over-year comparisons for occupancy rates by property type and regional data. In practice, when directly comparing 2026 full-year figures with 2025 and earlier, it will be necessary to check whether the Tourism Agency publishes adjusted or estimated bridging values.

Another issue is the effective response rate for the 2025 full-year survey. The number of surveyed establishments gradually declined from 22,347 in January 2025 to 20,395 in December, with effective response rates ranging from 47.9% to 51.8%. Response rates for establishments with fewer than 10 employees were relatively low at 34.6% to 39.4%, and challenges remain in accurately capturing the reality of small-scale properties. The 2026 methodology change can also be seen as an attempt to address this issue.

8. Implications for Operations: Redesigning Segment-Specific Strategies

Based on the analysis above, we present three specific implications for industry stakeholders. First, urban business hotels and city hotels have occupancy rates at ceiling levels (above 75%), making ADR improvement the primary battleground. The key lies in optimizing revenue management on inventory with high inbound ratios while gauging price sensitivity of domestic demand.

Second, regional ryokan and resort hotels must redesign their guest acquisition channels, premised on the structural retreat of domestic demand. Long-haul markets that recorded double-digit growth — including the United States (+19.3%), China (+20.6%), India (+42.9%), and Russia (+105.3%) — have strong affinity with regional dispersal. Strengthening OTA distribution channels and multilingual capabilities is likely to be effective.

Third, from a REIT and investor perspective, the coexistence of two distinct revenue models — near-90% occupancy midscale properties and luxury/resort properties with ADR exceeding ¥30,000 — is expected to continue. As REITs such as Japan Hotel REIT and Hoshino Resorts REIT continue to revise distribution guidance upward, operator pricing power is becoming the decisive factor in stock selection.

Conclusion: The Numbers Reveal “Two Accommodation Markets”

What the Japan Tourism Agency’s 2025 full-year statistics reveal is that Japan’s accommodation market is bifurcating into two independent markets: inbound demand and domestic demand. The headline figure of -0.8% masks this divergence, but the opposing movements of domestic -3.8% and foreign +8.2% are large enough to compel a strategic redesign across the industry.

Furthermore, the 2026 methodology change will temporarily obscure the continuity of statistical data. Revenue managers, hotel operators, and investors will need to triangulate market conditions at high resolution by combining multiple sources — OTA actual pricing, REIT monthly disclosures, and nationality-specific inbound data — rather than relying on official statistics alone. Looking back, 2025 was “flat by the numbers, but a turning point by structure.”

Related Resources

• HotelBank Top
• Japan Tourism Agency “Accommodation Travel Statistics Survey” Official Page
• Accommodation Travel Statistics Survey 2025 Annual Figures (Preliminary) Press Release