China’s travel ban intensifies, causing Japan to suffer significant losses

China’s travel boycott has canceled a lot of flights, wiped out all bookings, and could cost Japan’s tourist industry billions of dollars.

China told its people not to travel to Japan, which has quickly caused a lot of cancellations, hurt tourism stocks, and made diplomatic tensions between Asia’s two biggest economies worse. Japan is bracing for a big hit to its economy.

Within days of Beijing’s travel warning, 80% of the plans for the rest of the year for the Tokyo-based tour company East Japan International Travel Service, which depends a lot on Chinese group clients, were canceled.
The company’s vice president, Yu Jinxin, said, “This is a huge loss for us.” He added that past diplomatic problems had never caused such an immediate shock.

After making controversial comments, Japanese Prime Minister Sanae Takaichi told lawmakers that a military reaction could be needed if China attacked Taiwan and put Japan’s survival at risk. Chinese state media and officials strongly condemned the comments, which led Tokyo to tell its own citizens in China to stay away from crowded places and take more safety measures.

The World Travel & Tourism Council says that tourism makes up about 7% of Japan’s GDP and has been a key driver of growth. Official numbers show that about 20% of all visitors come from mainland China and Hong Kong. According to figures from the Nomura Research Institute, the boycott could cost Japan 2.2 trillion yen ($14.23 billion) a year.

More than ten Chinese airlines have already said they will return tickets for flights to Japan until December 31. Around 500,000 tickets have been refunded so far, according to experts in the field. Japan’s stocks that are linked to tourism have dropped sharply since the warning was sent out.

In the meantime, the political problems keep happening. China has stopped showing upcoming Japanese movies, and well-known Japanese performers in China have quickly distanced themselves from the issue.
Japanese singer MARiA wrote on Weibo, “China is like my second home. I will always support One China.”

The unknown is scary for tour operators like Yu. Her company has been through worse situations before, like a fight over island nationalization in 2012 that led to violent protests across China. This time, things look more dangerous.

She said, “If this lasts for one or two months, we can handle it.” “But if things keep getting worse, it’s clear that it will have a big effect on our business.”