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Nikko is famous for its hot springs. I was planning to visit it with the intention of enjoying some good onsens.

Are there different kind of onsens available there i.e for instance some are there in a ryokan or some are free for the public etc?

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The town of Nikko itself, where the Toshogu shrine is located, is not in a volcanic area and thus does not have any onsen hot springs. You have three choices in the vicinity:

  1. Kinugawa. Once a beautiful river valley, now a festering shithole scarred by the hulks of rusting, shuttered concrete hulks left over from the bursting of the bubble. It's probably the ugliest place I've been to in Japan, but if you don't want to take my word for it, see what Shigeru Itou and Spike Japan have to say.
  2. Chuzenji. Perched by Lake Chuzenji and the gateway to Nikko National Park, this would be my pick of the three.
  3. Yumoto Onsen. Haven't been here, so no comment. Beware that "Yumoto" means "hot water source" and there's approximately 100 other onsen with the same name in Japan; "Nikko Yumoto" is less ambiguous,

All three are major tourist areas and have accommodation running the gamut from Western-style hotels to fancy ryokan to simple B&B/minshukus. I don't believe there are any free baths, but many ryokan/hotels open their door to visitors during the day for a small fee (around ¥500 is common).

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Maybe Yumoto Onsen? It's a bit more than an hour by bus from Nikko. For an Onsen in a Ryokan, check Kinugawa Onsen, which is around 30 minutes by train from Nikko.

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