This paper aims at examining how hospitality industry contributes to the economy of Okinawa; and how hospitality cluster has been formed. This paper addresses these issues by analyzing the case of Okinawa’s hospitality industry. The hospitality industry in Okinawa has steadily developed. However, there are some critical issues, such as providing job opportunity for local people; and surviving in the severely competitive market. Firstly, this paper explains how hospitality industry contributes to the economy of Okinawa. It is found that hospitality industry seems to create jobs opportunities for local employees in Okinawa, where the unemployment attracted high attention. And finally, this study figures out that hospitality industry in Okinawa has clustered through the interactions among all of the four diamond facets, solving the issues that the hospitality industry is faced up with.