Men wearing protective masks, amid the coronavirus disease (COVID-19) outbreak, walk past empty tables at restaurants underneath Miyashita Park at Shibuya in Tokyo, March 9. Reuters

Toshiko Ishii spent $180,000 renovating her traditional Japanese inn in expectation of a flood of tourists for the Tokyo Olympics, but now she won't be hosting a single overseas fan.

After Olympics organisers announced a ban on spectators from abroad, those working in Japan's tourism industry are counting their losses.

Experts say the impact will be limited compared to the much larger blow brought by the pandemic, adding there is hope that tourism will rebound as life moves towards normality.

But it is a big setback for an industry that had high hopes for the Games after a dizzying upswing in business during the 2019 Rugby World Cup.

"I am guessing foreign visitors won't be allowed until at least September.

You have to look ahead and plan ahead to run a business," said Ishii.

"If you react emotionally at every turn of events, then you cannot sustain yourself," she added.

In preparation for the influx, Ishii doubled the size of her hotel's restaurant and upgraded the antique decor and kitchen.

"I was thinking, 'Next year with the Olympics, everything is going to be going up and up'," she told AFP. "Now all of a sudden everything has evaporated."

Bolstered by the Rugby World Cup, Japan welcomed a record 31.9 million foreign visitors in 2019, and was on track to achieve its goal of 40 million in 2020.

But last March strict virus border rules were imposed, all but barring foreign tourists, and the Tokyo Olympics were postponed for a year.

A person look toward the National Stadium, the main venue of the Tokyo 2020 Olympics and Paralympics, in Tokyo, Dec. 4, 2020. EPA

'Major economic loss'

Yui Oikawa, a manager at Tokyo Rickshaw, which operates tours in the historic Asakusa district, had assumed the Olympics, now starting in July,