Localization Shortfalls Limit Japanese Hotels as Asian Visitor Numbers Rise, Agoda Finds

Agoda’s latest report finds that only 34% of Japanese hotels have adopted advanced localization strategies, limiting their ability to fully capitalize on the growing influx of Asian travelers, who now make up over 80% of Japan’s international visitors.

Rising Intra-Asia Travel to Japan

Japan’s tourism sector is experiencing significant growth, with the Japan National Tourism Organization (JNTO) reporting over 42 million international visitors in 2025—a 16% increase from the previous year. Asian travelers account for more than 80% of these arrivals, underscoring the importance of regional tourism to Japan’s hospitality industry. The majority of these visitors come from five key markets: South Korea, China, Taiwan, Hong Kong, and Thailand.

Localization Strategies: Current State and Impact

Agoda’s report, “Tailored to Win: Mastering Localization to Capture Asia’s Travelers in Japan,” examines how Japanese hotels are responding to this shift in traveler demographics. The findings show that only 34% of surveyed hotels have moved beyond basic localization—such as providing translated materials or accepting a limited range of payment methods—toward more advanced, market-specific strategies.

Despite this, even early-stage localization efforts are delivering positive results. Among hotels in the initial phases of localization, 71% report improved revenue outcomes. However, the report indicates that a more comprehensive approach—integrating language support, culturally relevant experiences, and localized payment options—can further maximize commercial benefits. Hotels that have implemented advanced localization strategies report improved bookings, with about 80% reporting positive changes.

Key Barriers to Advanced Localization

Japanese hotels face several challenges in advancing their localization efforts. The report identifies two main obstacles: limitations in payment integration systems and insufficient marketing resources, each cited by 51% of surveyed hoteliers. Additionally, 49% cite gaps in foreign-language capabilities and a lack of awareness of cultural norms as significant barriers. These factors are slowing the adoption of more sophisticated, market-specific localization strategies.

Opportunities for Market-Specific Approaches

With a high concentration of visitors from a small number of Asian markets, the report emphasizes the need for Japanese hotels to move beyond “one-size-fits-all” solutions. Instead, hotels are encouraged to tailor their offerings to the preferences of each market segment. For example, South Korean travelers are interested in cultural exploration and unique local experiences, while Chinese travelers tend to spend more on activities and dining rather than accommodation. Taiwanese visitors prioritize culinary and wellness experiences; Hong Kong travelers value flexibility and convenience; and Thai tourists often travel in families and seek budget-friendly, short-haul trips.

Agoda’s report provides targeted recommendations, or “Quick Wins,” to help hotels better address these market-specific needs. These include expanding digital payment options, enhancing multilingual support, and designing culturally relevant guest experiences.

Industry Perspective and Future Outlook

Tadashi Ikai, Senior Country Director for Japan at Agoda, notes that the real opportunity for Japanese hotels lies in accelerating the adoption of advanced localization across all aspects of the guest experience. According to Ikai, bridging gaps in payments, language, and cultural understanding can help hotels better connect with Asia’s growing traveler base and create a sustained competitive advantage.

As regional travel continues to shape Japan’s tourism landscape, the ability to deliver tailored and culturally attuned experiences is becoming a key differentiator for hotels. Overcoming existing barriers and adopting more advanced localization strategies may