An increasing number of municipalities have raised the “bathing tax” rate on overnight visitors at “onsen” hot spring resorts as a quick and fairly easy way to raise revenues.

The standard rate is 150 yen ($0.98) per day.

Local governments can hike the bathing tax rate by simply amending a municipal ordinance, a much lower hurdle than introducing a new tax.

Many municipalities are now doing so to deal with surges in foreign visitor numbers and to counter declining spring water levels.

The bathing tax was established by the Local Tax Law shortly after World War II.

The use of revenue from the bathing tax was originally limited to maintenance of mineral spring sources, bathhouses and firefighting facilities.

During the Heisei Era (1989-2019), tourism promotion was added to the uses.

Until recently, municipalities were cautious about raising the tax rate because many small-scale hot spring resorts lacked management strength.

But such caution is disappearing.

Hokkaido has the largest number of onsen resorts in Japan.

According to the fiscal 2022 financial statements of 179 municipalities, nine brought in bath tax revenues exceeding 50 million yen. Six of them had increased the rate.

In 2015, Kushiro city, host of the Lake Akan Hot Spring, became the first municipality in Hokkaido to raise the bathing tax rate.

It now charges a bathing rate of 250 yen for overnight stays at some hotels and ryokan inns in the resort.

The change was prompted by the desire of lodging operators in the resort to increase both the attractiveness of the site and the number of days visitors can stay.

The city initially considered a new non-statutory purpose tax. However, the internal affairs ministry refused to approve it, so the city raised the bathing tax.

But Kushiro decided to keep the bathing tax unchanged at 150 yen for hot spring resorts other than Lake Akan.

Revenue from the higher tax rate has been used to build a parking lot at a shuttered hotel and to improve Wi-Fi access.

The city will soon propose an ordinance amendment to make the tax rate permanent at 300 yen.

In fiscal 2020, four municipalities in Hokkaido raised their standard bathing tax rate to 300 yen. They are: Noboribetsu city, which hosts the Noboribetsu Hot Spring; Sobetsu town and Toyako town, which host Lake Toya Hot Spring and Toya Hot Spring; and Date city, which hosts the Kitayuzawa Hot Spring.

The four municipalities share the Toya-Usu UNESCO Global Geopark and have been working together to promote tourism in the region.

Since the COVID-19 pandemic died down, the number of visitors to each hot spring in the region has been recovering.

Noboribetsu city’s tax revenue in fiscal 2023 was about 311 million yen, the highest since fiscal 2005, when such data became available.

The city has been using the added bathing tax revenue to make JR Noboribetsu Station barrier-free.

The Noboribetsu government will decide how to spend the tax revenue next fiscal year and beyond through discussions with the tourism industry.

Oita Prefecture in Kyushu has the largest number of sources for hot springs in Japan.

In onsen-rich Beppu in the prefecture, the bathing tax was raised in fiscal 2019 to protect hot spring resources following a noticeable decrease in the level and temperature of the water.

It was the first time Beppu raised the bathing tax since 1978.

The bathing tax jumped from 150 yen to 250 yen at hot spring facilities with a daily room and board charge ranging from 6,001 yen to 50,000 yen.

The tax rate surged to 500 yen for those with a daily room and board charge exceeding 50,000 yen.

The 500-yen rate is the highest among municipalities in Japan.

But a Beppu city representative said, “No particular complaints have been received from customers.”

Shizuoka Prefecture in central Japan has the most hot spring accommodations in the nation.

Ito city in the prefecture, home of the Ito Onsen, also decided to raise the bathing tax. The city has been suffering from a decline in the amount of onsen water.

In September this year, the city assembly amended its ordinance to raise the standard bathing tax amount to 300 yen in October 2025, compared with the current flat rate of 150 yen.

Higashi-Izu town in the prefecture, which hosts the Atagawa Onsen and Inatori Onsen, has also amended its ordinance to raise the bathing tax to 300 yen starting from March 2025.

However, it remains to be seen whether higher bathing tax rates will spread nationwide because of recent introductions of a non-statutory purpose tax called the “lodging tax.”

The scope of the lodging tax is wider than that of the bathing tax, and the tax revenue is larger.

Because of that, more municipalities are looking at the lodging tax to secure financial resources for tourism.

In Hokkaido, three municipalities have already introduced or decided to introduce the lodging tax. Sixteen others are considering the tax.

Raising both the bathing tax and introducing the lodging tax would create a double burden on hot spring resort guests.

Sapporo city, the capital of Hokkaido and home to the Jozankei Onsen, gains the most bathing tax revenue in Hokkaido, at about 313 million yen.

The city is considering introducing a lodging tax in fiscal 2026.

Sapporo had discussed raising the bathing tax, but that move was shelved because the facilities subject to the tax would be limited to hot springs.

“For the time being, we cannot think of raising” the bathing tax, a city official said.

Hakodate, a city in southern Hokkaido, which is also considering introducing a lodging tax, plans to lower its bathing tax rate for general visitors from the current 150 yen to 100 yen.

Initially, the city wanted to keep the tax rate at 150 yen. But it decided to lower the rate after taking into account the opinions of lodging business operators.

The reduction in revenue from the lower bathing tax rate is expected to be about 80 million yen a year.

The city said it expects to absorb that loss through an increase in revenue from the lodging tax to about 400 million yen annually.

(This article was written by Morikazu Kogen, Osamu Hiura and Ichiro Noda.)