Beppu has seen better days. Once upon a time, it was THE place to go on vacations. In the early part of the 20th century, rich people built exquisite villas in this town and took rides in biplane flying boats in the bay. Back in the days when gyoza and ramen were exotic meals, Manchurian and Chinese chefs competed to be the best in Beppu. The fabled nightclub Bon Tsurumi was to Japan what the "Lido" was to Cuba. The city's main draw were the hot springs, or onsens. It is still what draws people to this place. Most of the old buildings have been torn down, but you can still find remnants of the Taisho era cityscape here and there. The old city was the inspiration for the ghostly onsen town in Hayao Miyazaki's "Spirited Away".

The earliest record of the hot springs of the area is in Kojiki, or "The Record of Old Things", a collection of ancient Shinto myths edited into a book in the 8th century. The place became a major entertainment center during the Taisho and early Showa eras. The high-class brothels were requisited as "comfort houses" during the Second World War, which switched to servicing American GIs after the surrender. Former "comfort women" worked as pimps into the 1980s. As the fortunes of the city turned downwards in the 60s and 70s, gangsters violently feuded over the ever shrinking pie. Many of the incidents were recreated in the gangster movies of the era.

Although the tourism business was booming during the Bubble Period, the city never recaptured its former glory. Its position as the number one holiday destination for Japanese celebrities was gradually taken over by Hawaii since the mid 60s. Bon Tsurumi closed its doors in the 70s.

After the opening of the Ritsumeikan Asia Pacific University, a group of college students have started a volunteer group to revive some of the historic landmarks of the city.