With the winter sports season in full swing, skiers, snowboarders and those who just want to experience the snow are once again descending on Hokkaido. But the influx of so many visitors has highlighted a shortage of services to meet their needs, which cash-strapped cities, towns and villages that face declining populations and lower tax revenues are increasingly hard-pressed to finance.

A rising number of Hokkaido towns and villages are discussing the introduction of a local accommodation tax, following decisions by the prefecture and Sapporo to tax lodgers beginning in April 2026. Two such levies are already in effect on those staying at Japanese style inns, hotels and private lodging facilities in Niseko and Kutchan.

The Kutchan tax was introduced in November 2019. In fiscal 2023, it provided ¥200 million in funding for local projects related to tourism infrastructure. For the 2024 fiscal year, the levy is expected to bring in around ¥260 million.

Niseko became the second Hokkaido town to enact an accommodation tax in November 2024. Unlike Kuchan’s flat 2% rate — which is charged regardless of per-night lodging costs — Niseko’s tax has a five-tiered system.

It starts at ¥100 per night per person for those staying in places charging less than ¥5,000 a night and goes up to ¥2,000 per night per person for those staying in facilities charging more than ¥100,000 a night.

Niseko plans to use revenue from the accommodation tax to strengthen public transportation services, protect the local landscape and environment, improve energy conservation measures at lodging facilities to reduce their carbon emissions and to increase the number of tourism-related officials.

In the fiscal year that ended on March 31, 2024, Hokkaido saw around 47.8 million visitors, a 12.8% increase over 2022. Of this total, about 2.34 million were from abroad and about half of those were from just two countries: South Korea (659,200 visitors, 28.2% of total foreign visitors) and Taiwan (536,700 visitors, 22.9% of that total).

More than a quarter of foreign visitors came from mainland China (261,700, 11.2% of total), Hong Kong (192,000, 8.2%), and Thailand (136,000, 5.8%). There were about 86,000 American and 77,400 Australian visitors in 2023.

But while domestic and international tourists flock to Hokkaido, its population continues to shrink and age. The prefecture’s population was just over 5.2 million in 2023.

A 2024 estimate by the National Institute of Population and Social Security Research showed Hokkaido’s population is expected to decline to 4.32 million by 2040 and to 3.82 million by 2050, which has raised concerns about how local governments will raise taxes to not only service future visitors but also future residents.

In mid-December, Hokkaido's prefectural assembly passed an ordinance establishing a new accommodation tax. Beginning April 1, 2026, tourists at Japanese-style inns, hotels, basic lodging facilities and private lodging facilities will be charged a tiered rate, depending on their facility’s basic accommodation fee.

”There are great expectations for tourism in Hokkaido. So it’s important to create a virtuous cycle (of investment in the tourism infrastructure) by introducing the lodging tax in order to attract even more visitors,” Hokkaido Gov. Naomichi Suzuki said in November.

Those in rooms costing under ¥20,000 a night will be charged ¥100 per night. Rooms between ¥20,000 and ¥50,000 a night will charge ¥200 per night, and those above ¥50,000 a night will charge ¥500 per night. Students on school trips will be exempt from the tax.

Hokkaido’s accommodation tax is expected to put an additional ¥4.5 billion annually into prefectural coffers. The money will go toward developing tourist destinations that utilize local resources, improving Hokkaido’s public transportation system to make it easier to access more out-of-the-way places and strengthening measures to help visitors when natural disasters strike.

The fact that Kutchan’s accommodation tax is different from that proposed by the prefecture has been the subject of some controversy. Kutchan was opposed to a prefectural tax on top of its own.

But just before the prefectural assembly passed its ordinance, Suzuki and Kutchan Mayor Kazushi Monji agreed that Kutchan would be excluded from the prefectural tax. Instead, Kutchan will pay an equivalent amount of its lodging tax to the prefecture.

In addition, Kutchan will consider increasing its accommodation tax to further secure needed finances.

Other cities planning to enact their own accommodation tax separate from the prefectural tax include Sapporo.

The city's assembly approved a resolution in December to begin taxing lodgers from April 2026. They will be charged ¥200 per night at facilities costing less than ¥50,000 a night and ¥500 per night at places that charge more than ¥50,000 a night.

Other Hokkaido municipalities are also debating their own accommodation tax on top of the new prefectural tax. Some may settle on a system similar to Kutchan's levy. Others may choose something different from Sapporo, Niseko or other municipalities, and different from the prefectural accommodation tax.

That could make it confusing at times for lodgers who find themselves asked to pay different amounts of accommodation tax depending on where in Hokkaido they are staying. But Sapporo Mayor Katsuhiro Akimoto says that, unlike other prefectures, Hokkaido is quite large and a one-size-fits-all accommodation tax isn’t the way to go.

“Hokkaido is spread out over a large area and there is considerable distance between neighboring municipalities. Each municipality has the autonomy to levy its own tax. So each municipality will make its own decision based on its own situation and circumstances,” Akimoto said in late November, before the assembly agreed to the levy.