Japan’s travel industry is at a critical turning point. In March 2025, the country’s domestic tourism market suffered a surprising and severe drop, shaking the core of Japan’s travel economy.
While international travel to Japan continues to grow strongly, domestic travel sales have fallen sharply. Bookings disappeared, sales dropped by 16.6% compared to the previous year, and confidence in the market is weakening. The industry is now urgently searching for answers.
This sudden decline comes despite a booming inbound travel market. Overseas visitors are returning in large numbers, but the collapse of domestic travel is overshadowing these gains. The gap between rising international tourism and falling domestic travel is striking.
According to the Japan Tourism Agency, 43 major travel companies saw total monthly sales of 351.1 billion yen in March 2025, down from last year. Compared to March 2019, before the pandemic, the entire travel market is still 21.6% smaller, showing there is still a long way to go for full recovery.
This sharp downturn is not just a minor setback. It is a clear warning sign for Japan’s travel industry, one that could shape the future of the country’s tourism economy. Industry leaders are now navigating uncertain times, working to understand the causes and find a path forward.
