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Japan's most famous geisha are from Kyoto, Japan's former capital and still a major cultural capital of Japan. But I've also heard of onsen geisha, far away from the big cities, who are at the bottom of the pecking order of geisha.

Do such geisha still exist nowadays? Wikipedia's article on geisha mention that the number of geisha overall have declined dramatically, and I suspect the lower-grade geisha might be more likely to disappear.

Wikipedia has an article on onsen geisha, with a description of their status post World War 2, but it's rather brief and doesn't feel authoritative.

I'm making the assumption that there's such a thing as "onsen geisha". Is this a valid assumption, or is "onsen geisha" just a pejorative title that no-one would use about themselves?

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Given that the "Post WWII" section of the wikipedia page you linked is all written in the present tense, I'd say the answer is clearly "Yes". –  T.E.D. Oct 20 '12 at 14:45
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Onsen Geisha is not a specific Rank or similar within a national Geisha hierarchy. Onsen Geisha refer much more for the location where they can be found. You can see Onsen Geisha at several resort towns in Japan, for example Akita;

Sample resorts that allow booking of shows or private entertainment:

http://www.atami-furuya.co.jp/geisha/

http://www.horita-spa.com/party.html

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