Kyoto will introduce a steep new occupancy tax for luxury hotels from March 2026, with nightly charges reaching ¥10,000 per person. The move aims to curb overtourism and fund infrastructure improvements across the city.
Kyoto’s municipal government has confirmed a major overhaul of its hotel tax structure, introducing a five-tier occupancy tax system that will see the highest nightly charges rise tenfold for luxury properties. The new rates, effective from 1 March 2026, are designed to address overtourism and generate additional funding for local infrastructure and visitor services.
Under the revised scheme, guests staying in rooms priced at ¥100,000 or more per night will face a ¥10,000 occupancy tax per person—equivalent to approximately £66. For double occupancy, this amounts to £132 per night, excluding the city’s existing 10% consumption tax and typical 10% service charge. Even points-based bookings will be subject to the new tax.
The current three-tier system, introduced in 2018, levies a maximum of ¥1,000 per person per night. The new structure expands to five tiers, starting at ¥200 for budget stays and scaling up sharply for premium accommodations. The change is expected to more than double Kyoto’s annual hotel tax revenue, from ¥5.91 billion (£39.2 million) to ¥12.6 billion (£88.6 million).
While the move targets high-spending international visitors, it will also affect domestic travellers, many of whom are already grappling with reduced purchasing power due to the weak yen. Critics argue that the tax may encourage more day-trippers and push overnight guests to neighbouring cities like Osaka or Kobe, potentially diluting the intended impact on crowd control.
Kyoto officials have outlined plans to reinvest the additional revenue into multilingual information services, etiquette campaigns, and a new express bus linking Kyoto Station with the Higashiyama district. However, questions remain about whether these measures will meaningfully improve quality of life for residents or simply enhance the tourist experience.
For business travellers, the implications are clear: Kyoto’s luxury hotel rates are set to climb even higher, and corporate travel planners may need to reassess accommodation strategies for meetings, incentives, and executive stays in the region. With the city’s popularity showing no signs of waning, the new tax regime marks a bold attempt to balance tourism growth with local sustainability.