||Quite often mentioned by Japanese people as their favorite onsen town, Kusatsu really is a neat little place! As part of a weekend trip, we took the bus from Karuizawa via Shiraito Falls 白糸の滝 to Kusatsu.
Although the big ondoor onsen Sai no Kawara Rotenburo 西の河原露天風呂 proved to be more photogenic than nice in person, the town was a great place to wander around on foot!
Sai no Kawara Rotenburo 西の河原露天風呂 is big and decent but there's no place to wash. Unlike most hot springs, there isn't a place for you to have a shower before entering. The hot spring bath is quite large and nice enough although not as beautiful as the posters. There are many bugs in the water, more so than other outdoor hot springs. It was a nice little walk to get here though. Of course, you could check out the Yumomi show where they sing and dance to cool down the hot spring water. At the end, you can volunteer and join in!
We stayed a night at Ryokan Yoshinoya 草津温泉 湯畑の宿 佳乃や . To get here, take the 1.5-hour/2200 yen bus from stop #2 to the right of Karuizawa Station's North Exit. It's a very short walk from the Kusatsu Bus Terminal 草津バスターミナル and everywhere else. It was kind of hard to find initially though. Basically it's downhill on the way to Yubatake on the right. They have power assist bicycles for rent at 1000 yen for 2 hours but everything is within walking distance. Lots of restaurant options nearby as well.
The whole place is just really really nice and Kusatsu is surprisingly even better than I imagined. The shared hot spring bath is quite small. Only a couple of people could fit in there. There are 3 showers, so if it happens to be busy, you'll have to wait. You are free to wear the hotel "work clothes" and Japanese flip flops outside with towels in a woven basket. Complimentary tea, coffee, and many flavors of popsicles! Free wifi.
There are some fun traditional arcade type shops with shooting games and wooden pinballs should you want to entertain yourself at night.