In an effort to curb overtourism, Kyoto, Japan is instituting a massive increase in hotel taxes. While the tax will be calculated based on the room rate, it also applies to bookings using points. Based on some estimates, this could represent a 10x increase in occupancy taxes, giving Kyoto some of the highest hotel taxes anywhere in the world.
In this post:
Kyoto’s New Hotel Tax Structure
Japan has become extremely popular with tourists in recent years. The post Covid boom has seen travelers, including myself, flock to the island nation to experience the country’s rich history and culture.
As a result of this, places like Kyoto have seen a dramatic increase in tourism (along with nearby Osaka and Tokyo). In an effort to curb overtourism, the city has recently approved a new occupancy tax structure which will drastically raise the cost to stay in the city.
Currently, there are two types of taxes that guests pay when visiting a hotel in the city. The first is a nightly consumption tax of 10% of the room rate. The second is a variable occupancy tax depending on the nightly room rate. The latter is what is changing under the new structure. Currently, the variable occupancy tax rate is as follows:
- Rooms under 20,000 JPY ($131) are subject to a 200 JPY ($1.31) occupancy tax per person.
- Rooms between 20,000 ($131) and 49,999 JPY ($327) are subject to a 500 JPY ($3.28) occupancy tax per person.
- Rooms over 50,000 JPY ($327) are subject to a 1,000 JPY ($6.55) occupancy tax per person.
These all sound like reasonable tax rates for a city like Kyoto and most guests will probably glance right past this when looking at an itemized bill. However, that is all about to change.
Beginning March 1, 2026, there is a significant occupancy tax increase coming for guests visiting the city. The new structure keeps the same tier system as before but adds more tiers. The most expensive hotels in the city will see the greatest impact in tax percentage increases. The new structure is as follows:
- Rooms under 6,000 JPY ($39) will incur a nightly occupancy tax of 200 JPY ($1.31) per person.
- Rooms between 6,000 ($39) and 19,999 JPY ($131) will incur a nightly occupancy tax of 400 JPY ($2.62) per person.
- Rooms between 20,000 ($131) and 49,999 JPY ($327) will incur a nightly occupancy tax of 1,000 JPY ($6.55) per person.
- Rooms between 50,000 ($327) and 99,999 JPY ($655) will incur a nightly occupancy tax of 4,000 JPY ($26) per person.
- Rooms over 100,000 JPY ($655) will incur a nightly occupancy tax of 10,000 JPY ($65) per person.
This is obviously a massive increase, especially as you move into a higher priced room. Prior to the change a double occupancy room in a $700 per night hotel would have incurred an occupancy tax of roughly $13. Beginning in March, that same room would be upwards of $130, representing a 10x increase in the occupancy tax.
My Thoughts
The real question here is whether this will actually help curb overtourism. In my opinion, the answer is maybe. Mrs. ATX and I recently returned from a trip to Japan and spent one night in Kyoto. Our room was $430 and we paid $13 in occupancy tax. Under the current system, we would have paid $52 per night, a $39 increase.
For a single night stay, I would have been surprised at the high taxes but the cost alone wouldn’t deter me. However, if we had been planning a longer stay this cost definitely would have been factored in. We would either look for a lower priced hotel option or, book our stay in nearby Osaka and take the train into Osaka each day. The ride can be as short as 12 minutes on the Shinkansen.
If anything, this massive increase in occupancy taxes will likely somewhat limit visitors but, with hotel prices in Kyoto already at sky high rates, pricing alone won’t do much to deter visitors.
I’m curious as to how the occupancy tax changes will impact your opinions on travel to Kyoto.
Summary
Kyoto, Japan has agreed to raise the occupancy tax on hotel guests beginning March 1, 2026. In some cases, on the most high end properties, guests could see their occupancy tax rate increase 10x over the current rate. This is all being done in an effort to curb overtourism.