Toshiyuki Izawa 
The popular Nasu Onsen area. Preparations are underway in Nasu Town to introduce a lodging tax by next fall (Courtesy of the Nasu Town Tourism Association).
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Nasu Town in Tochigi Prefecture is a popular tourist destination that attracts around five million visitors annually. Renowned as a "royal resort," the town is home to an Imperial villa used by the Imperial family.
Starting in the fall of 2026, the town is planning to introduce a "lodging tax" on overnight guests. The goal is to secure a stable source of funding for tourism promotion. It plans to propose an ordinance for the lodging tax at the regular June session of the town assembly. If implemented, it would be the first such tax among municipalities in the prefecture.
A Six-Tier Flat-Rate System
In February 2025, Nasu Town explained the lodging tax proposal to an all-member meeting of the town assembly. At the assembly, it announced its intention to begin collection in October 2026.
According to the town's proposed framework, the tax will be levied in six flat-rate tiers based on the lodging fee per night (excluding meals, consumption tax, and bathing tax). The breakdown is as follows:
- Less than ¥10,000 ($66 USD): ¥100 ($0.67)
- ¥10,000 to less than ¥20,000: ¥300
- ¥20,000 to less than ¥30,000: ¥500
- ¥30,000 to less than ¥50,000: ¥800
- ¥50,000 to less than ¥100,000: ¥1,500
- ¥100,000 or more: ¥3,000
This tax will apply to hotels, inns, guesthouses, and pensions within the town. To ensure clarity, the town has opted for a flat-rate system. Children under 12 and students on school trips (excluding universities), along with their chaperones, will be exempt.
Planned uses for the tax revenue include improvements to tourism infrastructure and the local environment, such as roads, walking paths, secondary transportation, and environmental conservation. Incentives will also be provided to accommodation providers who are responsible for collecting the tax.
Additionally, subsidies will help cover the costs of upgrading or implementing new point-of-sale systems for the tax's introduction.
More than Fourfold Increase in Foreign Visitors
In August 2024, the Nasu Town Tourism Association submitted a request to the town government calling for the introduction of the lodging tax. In response, the town formed an internal project team to study the proposal.
Amid growing concerns over shrinking tourism promotion budgets, the request was submitted. Seeking stable, long-term funding for sustainable tourism development, the association highlighted the need for a new revenue source.
Tourist numbers in Nasu are now rebounding to pre-COVID-19 levels, surpassing five million in 2023 — the highest in 13 years since 2010. Notably, the number of foreign overnight guests surged to approximately 15,000 — more than four times the previous year. This sharp increase has made improved services for international visitors an urgent priority.
Meanwhile, projections by the Nasu Tourism Strategy Council suggest that the town's population will decline by about 4,000 people by 2030. Currently, the population is around 24,000. If annual consumption per resident is set at ¥1.3 million ($8,663), the projected population decline could lead to an economic loss of around ¥5.2 billion ($34.6 million), potentially threatening the sustainability of the town's economy.
Annual Revenue to Reach ¥300 Million
The tourism association, which covers much of its operating expenses through town subsidies, warned that it may become difficult to sustain its own operations in the future. This growing sense of urgency led it to highlight the lodging tax as a new source of revenue and to formally request the town to adopt it.
Nasu town is currently conducting a public consultation and will submit the proposed ordinance at the June session of the town assembly. If approved, it will proceed with the necessary steps. These include discussions with the Minister for Internal Affairs and Communications, with the goal of starting tax collection in October 2026.
Annual revenue from the tax is estimated at around ¥300 million ($1.9 million). Mayor Yukihiro Hirayama stated, "By uniting the administration and local businesses, we hope to offer services that exceed the value of the tax paid by guests. Our goal is to work toward becoming a sustainable, world-class tourist destination."
Lodging Tax
A non-statutory purpose tax levied on hotel and inn guests. It can be imposed independently by municipalities through local ordinances. It is primarily used as a funding source for regional tourism promotion. Currently, it is in place in areas such as Tokyo, Osaka Prefecture, Kyoto City, and Kanazawa City.
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Author: Toshiyuki Izawa, The Sankei Shimbun
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