Nagano lodging tax to drive resort area infrastructure investment

On March 26th, the Nikkei Shimbun reported that Nagano Prefecture will channel revenue from its lodging tax, set to be introduced in June, into areas with a high concentration of accommodation facilities.

The initiative is designed to support both local communities and lodging operators by strengthening regions as hubs for tourism circulation and longer stays. Officials aim to accelerate “accommodation reform” across the prefecture through targeted use of the tax.

Under the scheme, a flat tax of ¥200 per night will be levied on stays costing ¥6,000 or more, rising to ¥300 from June 2029. The prefecture estimates total revenue of approximately ¥10.8 billion over the first five years, with ¥4.2 billion allocated to improving the environment for receiving tourists.

A prefectural tourism official said the most effective way for visitors to feel that “Nagano’s destinations have changed” is through urban development in areas where accommodations are concentrated, such as hot spring towns. The prefecture will allocate more than ¥2 billion - the largest share among individual programs - to these initiatives.

Subsidies will fund improvements in key lodging clusters that serve as tourism bases, including upgrades to waiting areas and incentives to attract restaurants. In fiscal 2026, municipalities, tourism associations, and Destination Management Organizations (DMOs) will be invited to apply. Eight regions are expected to be selected, with subsidies of either ¥400 million or ¥200 million per region.

The program is expected to benefit hot spring resorts as well as destinations such as Karuizawa and Hakuba. With private-sector hotel development and renovations already underway, the prefecture aims to enhance shared public spaces to raise overall regional appeal.

Shiraito waterfall near Karuizawa. Photo by sabari nathan on Unsplash

An additional ¥500 million has been earmarked to support capital investment by accommodation operators. Subsidies will target projects aligned with prefectural priorities, including value-added upgrades, universal design improvements, and initiatives to enhance visitor satisfaction. More than 200 facilities are expected to receive support.

As a key policy benchmark, the prefecture has set a Key Goal Indicator (KGI) of increasing tourism spending by 29% from 2024 levels to ¥1.3 trillion by 2030. The target also incorporates residents’ perceptions of tourism’s contribution to their communities, reflecting a broader goal of sustainable regional development.

In addition to the prefectural tax, municipalities including Matsumoto City, Karuizawa Town, Hakuba Village, Achi Village, and Nozawa Onsen Village will introduce their own lodging taxes starting in June. To support municipalities without independent taxes, the prefecture will redistribute part of its revenue: one-third as general grants with flexible use, and one-sixth as targeted grants aligned with prefectural policy.

However, some experts argue that greater consideration should be given to municipalities that rely heavily on day-trip tourism. Professor Shu Tamura of Nagano Prefectural University, who has participated in lodging tax advisory panels in Achi and Karuizawa, noted that tourism spending and accommodation often occur in different locations.

For example, visitors touring the Kiso region may stay in areas such as Matsumoto or Suwa, meaning municipalities hosting day visitors bear the cost of tourism infrastructure without benefiting proportionally from lodging tax revenue. This risks leaving day-trip destinations underfunded despite rising tourism-related costs.

Local governments and accommodation providers are increasingly working to extend visitor stays through broader regional tourism strategies. As “accommodation reform” progresses, travel patterns are shifting, with more visitors staying in one area while exploring others across the prefecture.

Source:

Nikkei Shimbun (Japanese only; paywalled)