The Japanese government has recently approved a proposal by Kyoto to introduce what will be the highest hospitality tax in Japan’s history. Effective from March 2026, this new tax will require luxury hotels to charge up to $68 per person per night.

This measure is part of ongoing efforts to combat the negative effects of overtourism in the region. According to the South China Morning Post, the Japanese Ministry of Internal Affairs and Communications green-lit the tax proposal on October 3rd.

What’s the cost?

Reports from the Asahi Shimbun indicate that the tax will range from 200 yen for budget accommodations to 10,000 yen for more luxurious stays exceeding 100,000 yen per night, significantly surpassing the current maximum fee of 1,000 yen.

However, the revenue generated from this tax is designated to support the sustainable development of Kyoto, focusing on its cultural heritage. Mayor Koji Matsui stated, “Tourists also must bear the cost of countermeasures against overtourism. Kyoto is going to use revenue from the accommodation tax to build a sustainable tourism city, which must be good for both tourists and Kyoto citizens.”

Translation: “Tourists also must bear the cost of countermeasures against overtourism. Kyoto is going to use revenue from the accommodation tax to build a sustainable tourism city, which must be good for both tourists and Kyoto citizens.”

Nonetheless, the tax has drawn mixed reactions, with some critics arguing it could deter travelers from visiting Kyoto, pushing them to neighboring cities like Osaka. Despite these concerns, city officials assert that the new tax structure is fair, maintaining the lowest rates for budget travelers while increasing costs for luxury options.

Projected estimates suggest that the tax will double Kyoto’s annual revenue from 5.91 billion yen to approximately 12.6 billion yen, funding initiatives to alleviate the impact of overtourism and enhance the visitor experience in the city.