The transformation of Kusatsu Onsen spa resort in Gunma prefecture, at the margins of the Tokyo metropolitan area, is elucidated. The use of the Internet by the accommodation industry is analyzed based on the dependence of the area on travel agencies in both information distribution and supply and demand phases. These specifically identify the possibilities and limits of region-led tourism development. The results are as follows. Many accommodations at Kusatsu Onsen independently use travel agencies in the information distribution phase. On the other hand, in the supply and demand phase, both dependence on and independence from travel agencies are confirmed. Through the use of the Internet in the accommodations, the possibility of promoting region-led tourism development at Kusatsu Onsen is increasing as a whole in the information distribution phase. This possibility in the supply and demand phase is due more than ever to the management conditions and management abilities of the each accommodation. Using the Internet as an opportunity, each accommodation tries to overcome the disadvantages of its management conditions and create tourism services. Individual tourists with diverse and advanced tourism demand gather at spa resorts at the margins of the Tokyo metropolitan area. The area responds to tourism demand in the Tokyo metropolitan area, given changing relations of dependence between travel agencies and the areas they serve against the backdrop of the development of personal travel and information socialization. On the other hand, local organizations are attempting to form the functions of travel agencies; however, they are not succeeding. Accommodation owners call for organizations to act as the cores of local networks to promote the management and marketing activities of each accommodation. As described above, at Kusatsu Onsen, a situation is created for continuously providing non-daily life services to the tourism market in the Tokyo metropolitan area, and local accommodations and organizations produce tourism resources independently. In the information distribution phase, the accommodations and local organizations form an environment where each can effectively communicate its own attractions, and the possibility of region-led tourism development is widely acknowledged. On the other hand, in the supply and demand phase, such a possibility can be somewhat recognized. Some accommodations have a trend of great dependence rather than a tendency of becoming independent of travel agencies, and it is also difficult for local organizations to play the roles of a travel agency. These factors suggest the limits of region-led tourism development.
