Kyoto Implements Japan’s Highest Tourist Tax to Combat Overtourism

Japan’s Ministry of the Interior and Communications has given Kyoto final approval to implement the country’s highest-ever lodging tax, allowing the historic capital to charge guests up to 10,000 yen ($67) per person per night starting March 1, 2026, ten times more than the current maximum levy.

The approval, granted on October 3, removes the final bureaucratic hurdle after Kyoto’s municipal assembly approved the proposal in March 2025. The new tiered tax structure represents the first increase since Kyoto’s lodging tax was introduced in October 2018 and comes as the city grapples with unprecedented levels of tourism.

The new tax structure

The progressive taxation system is based on the price of accommodation per night and per person:

• Less than 6,000 yen ($40): The fee remains at 200 yen ($1.32)

• 6,000 to 20,000 yen ($40-133): The tax increases from 200 yen to 400 yen ($2.66)

• 20,000 to 50,000 yen ($133-332): The tax increases from 500 yen to 1,000 yen ($6.64)

• 50,000 to 100,000 yen ($332 to $665): The tax increases from 1,000 yen to 4,000 yen ($26.58)

• 100,000 yen and above ($665+): Tax skyrockets from 1,000 yen to 10,000 yen ($67)

The new tax applies per person per night, meaning a double-occupancy luxury hotel room could face a tax of $134 per night, on top of the standard 10% consumption tax and the usual 10% service charge that many hotels add.

The overtourism crisis

Kyoto’s tourism boom has reached staggering levels. The city welcomed 10.88 million foreign tourists in 2024, as well as 56 million domestic tourists. This increase follows a record 36.9 million international visitors to Japan in 2024, an increase of 15.6% compared to the previous record in 2019.

This influx has placed considerable strain on local infrastructure. Kyoto city officials cited overcrowded municipal buses, congested streets, long lines outside popular attractions and increasing pressure on historic sites as their main concerns. In their communication to the ministry, officials insisted that “tourists must also bear the cost of countermeasures against overtourism.”

Income and spending plans

Kyoto’s lodging tax revenue is expected to more than double, from 5.2 billion yen ($34.5 million) this fiscal year to about 12.6 billion yen ($83.6 million) annually once the new rates take effect.

The city plans to use the additional funding to introduce measures to ease pressure on infrastructure and improve the visitor experience, including expanding multilingual information services, launching etiquette campaigns and creating a new express bus connecting Kyoto Station to the Higashiyama district.

Will this really slow down tourism?

While Kyoto officials present the tax increase as a measure to combat overtourism, experts and industry observers express skepticism about its effectiveness in reducing visitor numbers.

“In practice, these taxes are rarely intended to discourage travel, they are designed to reinvest in what makes cities attractive: cultural preservation, public transport, cleanliness and better visitor management,” Nicholas Smith, digital director of holidays at Thomas Cook, told Euronews Travel.

The tax structure also raises several practical concerns:

The day trip flaw: The lodging tax only applies to overnight visitors, potentially encouraging more travelers to base themselves in nearby cities like Osaka, just 15-25 minutes away by train, and take day trips to Kyoto. This could actually increase traffic to popular sites during peak hours, without generating tax revenue for the city.

Impact on domestic tourism: The tax also applies to Japanese citizens coming from other parts of the country, not just international tourists. While the weakening Japanese yen is already reducing domestic purchasing power, this added burden could discourage Japanese travelers from staying overnight in Kyoto, potentially shifting more tourist pressure to neighboring destinations.

Neighboring towns under pressure: Budget-conscious visitors may choose to stay in smaller nearby towns, which could strain their infrastructure as they struggle to accommodate growing numbers of visitors without the resources or tourism management experience of Kyoto.

A growing trend

Kyoto is not alone in implementing tourist taxes. Other Japanese destinations are following suit, with Mount Fuji and Hokkaido considering introducing their own tourist taxes. Okinawa also adopted new lodging taxes in response to record tourist arrivals.

The trend extends beyond Japan. Cities like Venice and Barcelona have implemented similar measures to manage overtourism, while Bhutan charges international visitors $100 per night and Rwanda’s Volcanoes National Park charges $1,500 for an hour with mountain gorillas.

Conclusion

Kyoto’s dramatic tax increase sends a clear message that the city takes overtourism seriously and expects visitors to contribute to preservation and infrastructure costs. However, it remains an open question whether this will actually reduce the number of tourists or simply redistribute them.

The tiered structure ensures that budget travelers won’t be left out, while luxury visitors will shoulder most of the burden. But with the tax affecting Japanese tourists as much as international tourists, and the ability for visitors to simply stay elsewhere and take a day trip, the policy could generate much-needed revenue without solving the underlying problem of too many people crowding Kyoto’s temples, gardens and historic streets at once.

As the world follows Kyoto’s experiment, one thing is certain: The ancient capital’s struggle to balance cultural preservation and the economic benefits of tourism has become a warning for popular destinations around the world.