Yufuin is a district in Yufu, Oita prefecture in Kyushu. Two other towns and town of Yufuin merged to form Yufu city in 2005. Former Yufuin town was famous for three hot springs, including Yufuin hot spring.
Yufuin hot spring is a very popular hot spring resort not only in Kyushu but entire Japan especially for women due to there is no red light district. Beppu is another popular hot spring resort in Oita but Beppu has a red light district and crowded during evening.
Therefore a lot of tourists visit during daytime and enjoy the downtown of Yufuin where small shops and restaurants are gathered. Then, not like Beppu and other popular hot spring resort, there is no such large hotel located in the area.
Probably not important to foreigners who do not understand Japanese but Yufuin can be written in two ways in Japanese, 湯布院 and 由布院. Same pronunciation. The reason is that town of 由布院 merged with Yunohira town(湯平) in 1955 and changed its kanji to 湯布院. Therefore Yufuin station which was opened before 1955 still uses 由布院. By the way, city of Yufu is written as 由布.