Friday, April 1, 2016

Powder and Property Investment in Japan

Niseko, Japan - Photo courtesy of Explore Niseko
Unlike development in many of Japan’s smaller ski areas, winter sports’ infrastructure and tourism is on the rise in Hokkaido, Japan’s most northerly island. Australia and New Zealand have traditionally been the strongest ski holiday markets and they continue to grow year on year. While interest in ski resort investment has declined from the Aussie market, demand for both ski vacations and also for investment in ski property in Japan is increasingly coming from Hong Kong and the Chinese mainland. There are also significant numbers from other parts of Asia, including Singapore and Malaysia, as well as growing visitation from Europe and North America.

Niseko, Japan - Photo courtesy of Explore Niseko
Since hosting the 1972 Winter Olympics in Sapporo, Hokkaido’s ski industry has blossomed with dramatic development over the past 20 years. According to the Japanese National Tourism Organization, there are around 600 mostly small, locals’ ski resorts dotted all over the mountainsides of Japan. But, on Hokkaido there are a number of premier resorts, notably Niseko, dubbed the ‘Aspen of Asia’.

Niseko, Japan - Photo courtesy of Explore Niseko
Greg Hough, Director of Marketing for the Niseko Promotion Board, says that Niseko – and Japan in general – is firmly on the map now as a global ski destination. Although many smaller ski resorts are suffering due to declining domestic visitation, Niseko is blossoming. “Over all the domestic ski industry in Japan remains in decline with many ski resorts having to close each year,” says Hough. “In recent years there has been an increased awareness of some resorts (including Niseko) because of the inbound growth and interest from foreign investors. There has been a flood of general media interest - mainly international - and most of the major ski and snowboard production companies have been, and are still coming, to Niseko and Japan each year including Warren Miller, Sweetgrass Productions, Matchstick etc.” This continues to heighten awareness from the hardcore powder skier perspective.

Heli Skiing at Niseko, Japan - Photo courtesy of Explore Niseko
Around 100 km south of Sapporo, The Niseko United encompasses four resorts (like Aspen’s Power of Four) on one mountain, the 1308 meter-high Niseko Annupuri. Renowned for dry light powder and consistent abundance of snow, the mountain is open for winter sports from late November into May with slight variations at each resort. Here, visitor numbers jumped 103 percent over the 2011/12 season, according to the Niseko Tourism Board, including more overseas visitors than other Japanese ski areas.

Snowmobiling at Niseko, Japan - Photo courtesy of Explore Niseko
“The Niseko ski area has a 50-plus year history but the most recent boom started in 2003 and was driven largely by the Australian market and a few opportunistic developers,” says Hough who also owns and directs Explore Niseko KK. “Since the start of this development boom over 7,000 new beds have been developed and an estimated US$800million has been invested including the sale and re-purchase of two of the adjoining resorts - Niseko Village and Hanazono - as well as some infrastructure upgrade projects.” The key driver up until this point, he adds, has been property development and although the lift network has seen some upgrades, for the most part it remains unchanged. Niseko’s primary target markets for attracting investment are Hong Kong, Singapore and Malaysia.

Niseko, Japan - Photo courtesy of Explore Niseko
International awareness of Japan’s ski industry has been heightened over the years largely by media and social media. “There has been very limited investment in marketing by the resort and much of this has been left to the individual businesses,” says Hough, who has worked in travel and tourism since 1998. “Over the past 10 years most of our growth has happened organically and we have relied heavily on word of mouth marketing. The quality of the snow and a renewed interest in Japan as a ski destination has driven much of the growth.” 

Snowshoeing at Niseko, Japan - Photo courtesy of Explore Niseko
The Niseko United is an all-season resort with a skiing/snowboarding focus in winter and golf, cycling and food in summer. One of the big benefits for Hong Kong visitors is the small time difference (Niseko is just one hour ahead of HK) and a four-hour flight – both big pluses compared with traveling to Europe or North America. Other advantages include a network of 38 lifts accessing 48km of terrain with a substantial snow record (up to six or seven meters according to Japanese National Tourism Organization figures) - and the possibility of very light powder particularly between January and mid-March. Niseko also has many onsens throughout the area – natural hot springs ideal for après ski soaking – with a shuttle-bus link to all four base stations. And there are rapidly developing facilities for other winter activities, including snowshoeing, snowmobiling, heli and catskiing, backcountry tours and a focus on developing other off mountain infrastructure and retail. 
Niseko, Japan - Photo courtesy of Explore Niseko


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  3. We can see the success of most ski resorts in Japan specially on Myoko Kogen. Many investors try to put their investment in this type of industry because of the emerging market and business possibility.

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  6. hey! What do you think of the snowmobile industry in Japan? Do you think there are business opportunities?

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