Amidst Japan's extended Golden Week holiday in 2025, economic shifts are dramatically altering tourism patterns, reshaping both domestic and inbound travel behavior. Traditionally a peak travel season, this year's Golden Week reflects how macroeconomic forces are influencing individual decisions in a period of uncertainty and adjustment.
For Japanese residents, the twin pressures of inflation and a weakening yen are significantly affecting travel affordability.
Consumer prices continue to rise, with Japan’s core inflation rate hovering around 2.5% in early 2025, while the yen recently dipped to a 34-year low against the US dollar, trading at approximately ¥155 to $1.
These dynamics are putting strain on household budgets, prompting a widespread pullback from costly overseas vacations. According to the Japan Association of Travel Agents, outbound travel bookings for Golden Week have declined by roughly 18% compared to the previous year.
In contrast, domestic tourism is showing signs of resilience, though preferences are shifting. Shorter excursions, day trips, and local travel within one's own prefecture are gaining popularity, as people aim to limit expenses on accommodation and transportation.
On the other hand, Japan’s weakening currency is acting as a powerful magnet for international visitors.
With the yen down more than 20% from 2023 levels, tourists from countries with stronger currencies are finding Japan increasingly affordable. This has translated into a surge in inbound travel: the Japan National Tourism Organization (JNTO) reported that foreign arrivals during April surged to over 3.1 million visitors—a record high for the month—driven especially by tourists from South Korea, Taiwan, and the United States. The influx has pushed up demand for hotels and ryokan (traditional inns), with average nightly rates in major cities like Tokyo and Kyoto rising by 12–15% year-over-year.
This shifting landscape is creating a compelling opportunity for alternative lodging formats such as guesthouses and vacation rentals.
These accommodations, often more affordable than hotels, are especially appealing to younger travelers and families seeking budget-conscious options. Many offer added benefits like kitchenettes or full kitchens, allowing guests to prepare their own meals and reduce food costs—an increasingly attractive feature in the current inflationary environment.
Booking platforms such as Airbnb and Rakuten STAY have reported a 22% year-on-year increase in bookings for Golden Week, particularly in suburban or semi-rural areas that offer a mix of accessibility and authenticity.
In sum, the 2025 Golden Week is highlighting a clear bifurcation in Japan’s travel trends: domestic austerity meets international enthusiasm. As Japanese households trim expenses, foreign tourists are spending freely, buoyed by favorable exchange rates. The hospitality sector is rapidly adapting, with flexible, cost-effective lodging emerging as a critical growth area in response to the economic realignment.
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