A ryokan is a traditional Japanese inn, but this one is just a bit more unusual in comparison. As is written in kanji on the fiery scroll, this is the “Kitsune Ryokan”, the fox inn. Only mythical creatures and spirits frequent here, specifically kitsune, a type of deceitful fox creatures. Several of them have gathered in this image: A female to the left wearing a kimono and playing her shamisen as she daydreams; a male fox smoking a kiseru (a Japanese pipe); an elder female shuffling about in the background; and a proud samurai guarding his currently undressed mistress.
The masks hanging on the post each belong to one of these patrons. From top to bottom: The Matriarch; the Ignorant; the Trickster; the couple.
Masks are culturally associated with kitsune, as they use them to shapeshift and at times disguise themselves as humans.

The viewer is an unwelcome guest to this establishment, presumably because he himself is not a fox spirit, thus appearing quite out of place. A smoky mirage is conjured from the pipe and directed towards the visitor in an attempt to startle and scare. The samurai glares and snarls, his left hand on his blade, uneasy at the intrusion of an outsider into this private setting. He protectively raises his right arm, to shield shield as much of his maiden from view as possible. The white vixen, pristine and graceful, has also noticed the intruder and clutches her tail for cover, wrapping it around herself in an attempt to escape the insolent gaze. The shamisen-player, however, remains blissfully ignorant, spellbound by her own music. Hidden in the corners of the building, minor spirits rustle about and observe.