Japan’s accommodation sector reported mixed performance in July 2025, as the latest figures issued by the Japan Tourism Agency indicate. Total overnight stays rose to roughly 56.40 million, yet the aggregate represents a 1.4% decrease year on year. The diminished figure was mainly attributable to a 2.5% contraction in non-resident arrivals, while domestic overnight visits experienced a more modest 1.1% slide. Counterbalancing these aggregate reductions, specific sub-sectors delivered guardedly encouraging results; business hotels, resort complexes, and traditional ryokan properties registered higher occupancy rates than the corresponding month of 2024.

NAV, the figures further disclose, longstanding behavioural adaptations within the lodging landscape, emerging as slow but unmistakable modifications. Within these structural alterations, a gradual strengthening of domestic, as well as leisure-oriented markets, counters the lingering headwinds impeding inbound growth. Elevated occupancy in target segments, therefore, constitutes an encouraging indicator for the long-term evolution of the sector.

Persistent domestic demand

Domestic visitation retains strategic relevance for Japanese lodging markets. Although visitor numbers have eased, Japanese travellers continue to underpin demand for an array of accommodation formats nationwide. Noticeable gains are reported across the business and resort hotel segments, reflecting the constrained yet improving resurgence of corporate travel, in tandem with lingering traveller interest in leisure and wellness-oriented escapes.

The enduring strength of domestic tourism is evidenced by the sustained patronage of traditional ryokan—Japanese inns—by Japanese travellers intent on deepening their engagement with the nation’s cultural heritage. In this pursuit, domestic visitors have gravitated toward these venerable establishments, drawn by the sophistication of curated experiences, including the time-honoured rituals of onsen bathing, the refinement of the tea ceremony, and the artistry of kaiseki cuisine.

Examining the Concurrent Decline of Foreign Arrivals

Although domestic tourism exhibits remarkable stability, the inflow of foreign travellers remains under duress, with a reported contraction of 2.5% in July 2025. This contraction underscores the persistence of recovery impediments within the international tourism landscape, which shows no sign of recapturing the occupancy indices characteristic of the pre-pandemic era. In parallel, the Japan Tourism Agency continues to orchestrate stratified promotional campaigns and policy instruments directed at prime outbound markets, attempting to rekindle transnational demand. Nonetheless, the observed withdrawal of foreign travellers may well be a dispersed derivative of wider trans-regional tendencies and systemic variables, encompassing uneven global economic shifts and enduring, if attenuated, travel constrictions that modulate international movement and visitation patterns.

Performance of Business Hotels and Resort Properties

In Japan’s urban centres—most notably Tokyo, Osaka, and Kyoto—business hotels report a marked improvement in occupancy, a trend underpinned by the resumed cadence of corporate travel. Executives and support personnel alike are once more commuting for meetings, negotiations, and symposiums, and this reinvigorated flow of in-person engagements has steadily elevated the demand for economical, efficiently managed lodgings designed to meet the pragmatic needs of the transient workforce.

Concurrently, the nation’s resort hotels located within the most attractive leisure and wellness corridors are recording comparable occupancy gains, driven predominantly by a surge in longer-duration, leisure-focused visitation. Hokkaido, Okinawa, and the Hakone corridor remain dominant in the domestic and, to a lesser extent, regional markets, leveraging curated wellness programmes, stunning natural vistas, and elevated service protocols that cater to corporate and leisure blend clientele alike.

Properties situated within Japan’s mountainous and coastal zones are reaping additional returns from the ascendant appetite for outdoor recreation and wellness-themed ambient fortification. Signature programmes—ranging from therapeutic spa treatments and outdoor yoga to integrated sustainable practices—speak precisely to the aspirational traveller in search of restorative distance from urban neighbourliness. The surging preference for properties along Kyushu’s coastal strands, the volcanic highlands of Hokkaido, and the mountainous reaches of Shizuoka evidences an accelerating alignment of domestic consumer sentiment with asset offerings that recast landscape immersion and tranquillity as strategic leisure and wellness deliverables.

Ryokan Renaissance: Upholding Heritage and Cultivation

Recent occupancy indicators for ryokan properties—particularly those nestled within the historic cores of Kyoto and Nara—show an enduring reverence not merely for accommodation but for ongoing custodianship of Japan’s intangible legacy. Such establishments transcend the conventional hotel narrative, courting the visitor with understated elegance. They choreograph an encounter with the country’s nonstop, 1,200-year-old traditions through meticulously arranged local cuisine, subdued mineral-water baths, and quiet introductions to daily etiquette, extending the historical present well into the guest’s evening.

The observed uptick—certain statistical and qualitative surveys continue to reaffirm—aligns travel sentiment with an aspiration to experience the concomitant global desire for authenticity and deep engagement. Ryokan remain paragons of architectural and sensorial sincerity: restrained wooden frames, carefully laid tatami, and the soft inhale of sheep-wool futons invite the contemporary explorer to the lowered encounter of centuries.

Simultaneously, the ongoing recovery of Japan’s broader tourism sector programmes the future through the undiluted lens of sustainability. Ryokan, in particular, serve a dual adaptive mandate: they continue custodianship of narrative and are accountable stewards of the living environment. Enhanced energy audits, localised food sourcing, and the restriction of single-use products, driven by central governmental advising and by compelling dialogue among regional hoteliers, signal a sector approaching the ambit of eco-tourism with a diligence that translates broader intentions into operable, regional, and tacit, guest-inclined action.

Japanese lodging operators are progressively adopting eco-conscious frameworks, enabling travellers to engage in sustainable conduct during their stay. Investments in energy-efficient technologies, comprehensive waste diversion protocols, and locally-sourced culinary programs create a green framework that is attractive to environmentally Minded visitors and, importantly, safeguards the long-term viability of the nation’s travel economy.

Conclusion: Projections for the Recovery of Japan’s Tourism Landscape

Even as international inbound demand faces continued constraints, the domestic travel market displays an enduring capacity for adaptation, providing a secure base for the revival of Japan’s lodging infrastructure. Rising occupancy ratios across business hotels, resort properties, and traditional ryokan are signifying a rapid resurgence in select leisure, wellness, and nature-oriented segments.

Concurrently, coordinated efforts between public authorities and sector constituencies are concentrating resources on upgrading Japan’s destination product and market positioning, thereby creating strong confidence that the industry will maintain a resilient trajectory as we advance toward 2025 and the following decade.