Kyoto to Introduce Nation’s Highest Hotel Tax to Address Overtourism, Charging Up to 10,000 Yen Per Night at Luxury Hotels by 2026 in Japan

Published on October 9, 2025

In a bold move to address its growing overtourism crisis, Kyoto, Japan’s historic capital, is set to implement the highest hotel tax in the nation’s history, effective from March 2026. The new measure, approved by the Japan Ministry of Internal Affairs and Communications, will levy a tiered tax ranging from 200 yen for budget accommodations to 10,000 yen per person, per night for high-end luxury hotels, a stark contrast to the current national tax cap of 1,000 yen. The decision comes amid growing concerns over the city’s crowded streets, strained local resources, and rising frustrations among residents and businesses affected by mass tourism.

The new tax will help generate additional revenue, which will be earmarked for sustainable tourism initiatives aimed at alleviating some of the pressure on the city’s infrastructure. Local government officials are hopeful that the funds raised will be used to implement practical solutions to manage visitor numbers more effectively, improve public amenities, and preserve Kyoto’s cultural integrity. The move is designed not only to curb the negative impacts of overtourism but also to ensure that the tourism industry contributes more equitably to the local economy.

Kyoto, a city known for its temples, traditional tea houses, and stunning landscapes, saw 56 million visitors in 2024, nearly reaching pre-pandemic numbers. While the influx of visitors brings economic benefits, the city has been grappling with issues like overcrowding in popular tourist districts like Gion, where tourists often violate local customs by trespassing on private lanes and disturbing geisha and apprentice maiko. This high hotel tax initiative is part of a larger strategy to strike a balance between maintaining the cultural charm of Kyoto and meeting the demands of a thriving tourism market.

Details of Kyoto’s New Hotel Tax System

Kyoto’s new hotel tax, the highest-ever in Japan, will be levied on tourists staying in accommodations ranging from budget hotels to luxury establishments. The tiered tax system has been designed to ensure that those who stay in high-end hotels contribute more toward mitigating the impact of their visits. Here are the key details of the tax system:

• Tax Rates: The tax will range from 200 yen for budget accommodations to 10,000 yen for rooms costing more than 100,000 yen per night.
• Effective Date: The tax is scheduled to be implemented starting in March 2026.
• Revenue Usage: The funds generated will be used for local tourism management efforts, including multilingual visitor support, etiquette education campaigns, and the creation of public transport solutions like an express bus linking Kyoto Station with the Higashiyama Temple District.
• Projected Income: The tax is expected to nearly double Kyoto’s annual hotel tax revenue from 5.9 billion yen to 12.6 billion yen (approximately US$40 million to US$85 million).

Addressing Overtourism Challenges

Kyoto has long struggled with the negative effects of overtourism, particularly in districts such as Gion, a famous area known for its geisha culture and historical significance. Locals have voiced frustration over the increasing number of visitors crowding the narrow streets, disturbing the cultural heritage, and trespassing in restricted areas. To curb these issues, the city has already implemented measures like fines for trespassing in private lanes in Gion, with penalties of up to 10,000 yen for offenders.

Despite these challenges, tourism remains a cornerstone of Kyoto’s economy, and balancing the needs of both visitors and residents has become increasingly difficult. The new hotel tax aims to address this by generating the necessary funds to support sustainable tourism practices, improve infrastructure, and ensure that the city remains a thriving destination for future generations.

Revenue Allocation: Supporting Sustainable Tourism

The new hotel tax is designed not only to raise revenue but also to address the increasing strain placed on Kyoto’s infrastructure and cultural heritage. The funds will be directed toward a variety of initiatives, including:

• Multilingual Support: Enhancing services for international visitors, ensuring that tourists can navigate the city more easily and respectfully.
• Visitor Etiquette Education: Running campaigns to raise awareness about local customs and etiquette, helping to reduce instances of inappropriate behavior by tourists.
• Public Transport Improvements: Funds will go toward creating an express bus service connecting Kyoto Station with key attractions, such as the Higashiyama Temple District, improving accessibility and reducing congestion.

These initiatives aim to preserve Kyoto’s unique character while ensuring that tourism continues to benefit both residents and businesses. The city’s commitment to managing its visitor numbers and improving the overall tourism experience highlights its proactive approach to sustainable tourism.

Balancing Tax Impact on Visitors

While some critics argue that the new hotel tax could deter high-spending tourists or push them toward nearby cities like Osaka, city officials have stressed that the tax system will be tiered, with budget travelers facing minimal additional costs. The 200 yen tax for budget accommodation remains the same as current levels, ensuring that the measure does not disproportionately affect low-budget tourists.

Officials argue that the new tax system is fair, with the highest tax rates applying to visitors who stay in luxury hotels, where the average nightly rates are much higher than those at budget establishments. This ensures that those who benefit the most from their stays in expensive accommodations contribute more toward addressing the impacts of their tourism.

Kyoto’s Continued Popularity as a Global Destination

Despite the challenges posed by overtourism, Kyoto remains one of Japan’s most sought-after destinations, attracting millions of international visitors annually. The city’s rich cultural heritage, stunning temples, and beautiful gardens continue to draw tourists from around the world, contributing significantly to Japan’s broader tourism industry.

In the first half of 2025, Japan welcomed a record 21.5 million international visitors, and Kyoto’s share of that figure is substantial, with the city drawing 56 million visitors in 2024. As international tourism rebounds, the need for effective management strategies like the new hotel tax becomes even more crucial to ensure that Kyoto remains an attractive and sustainable destination for future generations.

The Future of Kyoto’s Tourism Landscape

Kyoto’s decision to implement this significant hotel tax is part of a broader trend across Japan, where cities are seeking new ways to address the growing pressures of overtourism. While the country’s tourism boom shows no signs of slowing down, measures like these are critical to maintaining the delicate balance between economic growth and the preservation of cultural heritage.

The introduction of the hotel tax is also likely to set a precedent for other cities in Japan facing similar overtourism challenges. As the world’s tourism dynamics shift, destinations like Kyoto will need to continue innovating and finding ways to manage the influx of visitors while ensuring a positive experience for both tourists and local communities.

Conclusion: Ensuring Sustainable Tourism for Kyoto

Kyoto’s implementation of the highest-ever hotel tax in Japan marks a significant shift in the country’s approach to managing overtourism. By introducing a tiered tax system and earmarking the funds for sustainable tourism initiatives, the city is taking concrete steps to protect its cultural heritage while still benefiting from the economic contributions of tourism. This bold move is aimed at creating a more balanced, sustainable tourism model that benefits both visitors and residents alike, ensuring that Kyoto remains a premier destination for years to come.

Key Takeaways:

• New Hotel Tax: Kyoto will introduce Japan’s highest-ever hotel tax, ranging from 200 yen to 10,000 yen per night, effective March 2026.
• Purpose: The tax aims to combat overtourism, with revenue directed toward sustainable tourism initiatives, public transport improvements, and etiquette education.
• Impact on Tourists: The system is tiered, ensuring that budget travelers are minimally affected, while luxury visitors contribute more to mitigating tourism impacts.
• Kyoto’s Popularity: With 56 million visitors in 2024, Kyoto continues to be a leading destination for international tourism in Japan.
• Sustainability: The hotel tax is part of Kyoto’s broader strategy to ensure tourism benefits both visitors and residents while preserving the city’s cultural integrity.