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Whether you are staying at a ryokan or visiting a day onsen (hot springs), the etiquette and customs for using the baths are the same—with a few additional things to note for the day onsen.
If you are staying in a ryokan you should have towels (bath towel and face towel), a yukata, and slippers in your room. Put on the slippers and yukata, and take the towels with you to the baths. Leave your valuables in the room because in most ryokan there will only be open baskets (no lockers) in the changing rooms.
Day Onsen & Sento
At the day onsen and sento, you will need to remove your shoes at the entrance and place them in small lockers that will be located near the reception. The day onsen are much like Japanese homes and some traditional restaurants in that they expect guests to remove outdoor shoes inside before entering the premises. Entrance tickets can be purchased at the baths at a machine or the reception. The entrance price does not normally include a towel and so regular onsen users will bring their own. If you don’t have a towel on your person, you can rent (or buy) a face-towel and/or a bath towel at the facilities. In 99% of onsen, shampoo, conditioner, will be provided free of charge, but in the few places where it isn’t provided you will be able to buy supplies. Hand over your ticket (if purchased from one of the machines) and you will be given a locker key for the changing rooms in exchange.
The baths are separated by sex (typically blue for men; red for women). The changing rooms themselves are like any other, with the exception that many onsen provide ear buds, hair dryers, and even skin lotion in the dressing area.
You enter the bathing room naked (no swim wear allowed), taking only the hand-towel with you. This is used to cover yourself as you wander around the baths, as well as to wipe the excess water from your body before you head back into the changing rooms afterwards. Near the entrance there will be a line of showers, where you wash yourself before entering the bath. These are not private shower cubicles like you would find at sports gym, but open lines of showers each with a small stool and plastic bowl. Japanese wash themselves while seated on the small stool. The faucet can be switched to work as a tap to fill the bowl (for shaving).
Once you’ve washed you are ready to enter the baths! The water temperature can vary considerably between onsen so if you’re sensitive to hot water then it’s best to enter the bath slowly. Place your hand-towel on the side when you are in the water (or, if you want to blend with the locals, on your head—which, incidentally, also has a nice cooling effect when you’re using the outside bath tubs).
Finally, if you use the sauna be sure to wash or rinse your body before you get back into the baths. Some places will have a barrel of cold water outside the entrance to the sauna for users to wash away the sweat from their body afterwards.
Please remember that onsen are places to that people go to relax and wind-down, and so kids jumping in the hot water or splashing about will not go down well with other bathers (some onsen do not allow children for this reason). That said, it is not at all uncommon to see fathers with young boys or mothers with young girls in the onsen.