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Tuesday, Oct. 16, 2012
THE ZEIT GIST
Niseko puts faith in powder to revive tourism boom
Hokkaido resort town expects a return to business as usual after post-3/11 drop
By PATRICK BUDMAR
Throughout most of the 2010s, the meteoric rise in popularity of Hokkaido's ski resorts among foreign visitors was widely documented in both the domestic and overseas media.
In particular, the quiet town of Niseko in southwestern Hokkaido, 100 km west of Sapporo, quickly and somewhat inexplicably rose in prominence among Western expats and tourists despite the numerous other international-grade ski resorts already dotting the Hokkaido landscape.
The region resonated especially strongly with Australians, who began visiting and settling down in increasing numbers year on year, leaving many observers unfamiliar with the charms of the town wondering what all the fuss was about.
The short answer is that the powder snow in the Niseko area is considered by skiing enthusiasts to be some of the best in the world, a far cry from the watery, heavy snow more commonly found in other regions both in Japan and abroad.
Max Friedman of the Niseko Promotion Board also attributes Niseko's boom to the area's tourism infrastructure, the direct result of visiting Australians building accommodation and services aimed at foreigners.
"There's nothing like the condominiums or high-level services available (in Niseko) in Hakuba (in Nagano Prefecture) or elsewhere," he says. "I'm sure they would attract more guests if they had the same high level of infrastructure and service."
As for why the area has proved to be such a draw for Australians in particular, its proximity to the southern continent and a mere one-hour time difference make Niseko a more practical choice for Aussie winter sports enthusiasts than, for example, Canada's slopes.
"Australian culture is extremely sports-oriented, and those that are keen on snow sports in Australia don't take long to realize the limits of their own environment down there," Friedman says. "Turn your eyes to the nearest quality resort and you find yourself in Japan."
This steady stream of positive word-of-mouth among foreign visitors, especially Australians, translated into a total of more than 127,600 bed nights (occupancies by one person for one night) by foreign tourists at the 12 largest accommodations in the Niseko region over the winter of 2010, according to figures released by the Niseko Promotion Board.
Of this number, over 62,800 bed nights — or about half — were attributed to Australians.
"The Niseko area is in a state of constant growth," Friedman says. "New investors are always putting up new buildings with new beds, fantastic restaurants pop up every season, and the snow just keeps on falling."
Niseko Adventure Centre, a local business owned and run by Australian expat Ross Findlay, was one of several establishments in the region that recorded a strong 2010 winter season.
Based on what he saw happening around him, Findlay estimates overall attendance at Niseko's resorts was roughly 90 percent compared to the previous season, a respectable figure considering the strengthening yen and the lingering effects of the global financial crisis. Approximately 15 percent of visitors came from Australia.
"These results are taken from several of the bigger hotels in the area," he explains, "so it is not an exact figure but percentages based on these hotels, but overall it is fairly representative."
Having escaped relatively unscathed from the Great Recession, local businesses could have been forgiven for expecting the "Niseko boom" to continue unabated. However, events 500 km away conspired to dash these hopes on March 11, 2011.
Having worked with Niseko Home Design for the last decade, town resident Shigeru Uehara has witnessed first-hand the increasing number of foreign visitors to the region, as well as the developments, both good and bad, resulting from this trend.
When the earthquake and tsunami hit the Tohoku region on 3/11, Uehara also saw the immediate effect the disasters had on foreign visitors and residents in the area.
"The news of the natural disaster itself was enough to cause many foreign tourists and short-term staff, such as skiing instructors at local ski schools, to leave Niseko over the next few days," he says.
While Findlay also admits that visitors were leaving the region at the time, he says he did not notice a "big rush," and points out that other factors may have played an equally important role in the perceived exodus.
"Most week stays finish on a Saturday, and March 11 happened to fall on a Friday," he says. "Additionally, we usually do not have many foreign guests by March, though I believe many nations were advising their people who remained to come home."
Despite news of the deteriorating situation at the crippled Fukushima No. 1 nuclear power plant only being widely reported some two or three days after the natural disaster, Uehara noticed that the exodus had already started well before then.
"Many people were rushing to leave Japan at that time," he says. "I guess most foreigners, whether they were tourists or locals, were able to get up to speed about the disaster via the Internet or satellite TV."
However, Uehara adds, most of the foreigners who lived in the town "long enough to know exactly how far (away) Fukushima Prefecture was" from Niseko remained in Japan throughout the natural disaster and nuclear accident.
The real distance between Niseko and Tohoku aside, Uehara admits that like most people at the time, he was fearful that radiation from the leaking nuclear plant would make its way over to Hokkaido.
"We were naturally afraid of that happening, as up to that point we had no real experience or knowledge about radiation," he says.
Due to his work at Niseko Home Design, Uehara has dealt directly with overseas customers, including Australians, looking to enter the housing market in Niseko, a business that grew off the back of the local tourism boom.
However, in the months after 3/11, the fear surrounding the Tohoku disaster — and in particular the crisis at the Fukushima No. 1 plant — hit tourism throughout Japan, including in Hokkaido.
It also affected the confidence of potential investors, with Uehara noticing a drop in the Niseko property market immediately after the disaster.
However, he adds, "There was also a strong increase in the value of the Japanese yen against other currencies at the time, which may have influenced the market just as strongly."
According to the Niseko Promotion Board, the number of bed nights for the 2011 winter season at the town's 12 largest accommodations was 95,535, of which 40,486 were attributed to Australians, meaning visitors dropped by about a quarter from a year earlier, and Australian visitors by roughly a third.
"The strength of the Australian dollar related to the U.S. dollar, the strength of the yen, and the disasters that struck Japan last year meant that for many Australians it was an appropriate year to check out a different ski location in North America," Friedman says.
Following the Tohoku disaster, Niseko settled into its usual quiet period for tourism, as its famous powder melted away with the onset of spring.
"As Niseko is a ski resort, the main months are late December, January and February," Findlay explains.
When the first anniversary of 3/11 rolled around this year, figures released by the Japan National Tourism Organization showed that the number of foreign visitors had sunk to 685,000 in January, marking the 11th straight month of year-on-year declines.
The number of foreign guests at the Niseko Adventure Centre came in at 75 percent of previous levels over the 2011 peak season, and Findlay acknowledges that holidaymakers were likely questioning the logic of going "to a country that is in the midst of a nuclear accident."
"It should be obvious to everyone that guests were going to avoid Japan, especially families," he says. "After all, if you are going to jump on a plane, you may as well go somewhere else."
At the time of writing, the homepage for radiation monitoring in Hokkaido (www.monitoring-hokkaido.info) maintained by the prefectural government registered a daily reading of 0.037 microsieverts an hour in the nearby town of Kutchan, the closest monitoring station to Niseko.
In comparison, Japan's Ministry of Education, Culture, Sports, Science and Technology (radioactivity.mext.go.jp) reported daily radiation levels in Hokkaido's capital, Sapporo, to be around 0.029 microsieverts per hour, while Tokyo, located roughly 240 km southwest of the stricken Fukushima No. 1 plant, recorded around 0.047 microsieverts.
The Japanese government has set the acceptable national limit at 3.8 microsieverts an hour, more than 100 times the level recorded at all of these sites.
While Findlay noticed a decrease in families and skiers new to the sport during the 2011 winter season, he also observed an apparent increase among "serious skiers from all over the world," as the region was fortunate to experience a good year in snowfall.
"The big positive for the season was that lots of skiers around the world were having bad seasons and decided to come to Niseko, where we were having a great season," he says. "This means that they are receiving information about Niseko or have researched it enough to decide that it was safe to come."
Even though the Niseko region has suffered in the wake of the "triple punch" of the Tohoku disaster, strong yen and global financial crisis, Uehara has found that people are still coming to the town to look for property.
"In fact, I received more inquiries from overseas customers regarding building in Niseko this winter than I did in the last one," he says. "It's true that we had difficult conditions in the market the last 12 months, but I think the fact that Niseko offers one of the best powder snow in the world remains the same regardless."
Having recorded a dip in tourism a year after the events of March 11, the question now is whether visitor numbers to the region will recover to their earlier boom levels this winter.
"This is, of course, a tricky question, but I believe that most of the guests that chose not to come this year will be back in Niseko for the 2012 season," Friedman predicts. "The snow in Japan was as consistent as usual, and we saw a huge quantity of media coverage from some of the top names in the ski industry."
Japan's tourism industry as a whole seems to be on the road to recovery following last year's disaster, with the government's tourism promotion agency reporting 845,000 foreign visitors to Japan in July, a 50.5 percent increase from a year earlier and the second-highest monthly total on record.
"The Japanese government is finally having some success decreasing the strength of the Japanese yen, and the issues with nuclear contamination are calming as well," Friedman says. "Combine these with our fantastic snow season, well documented in the Australian media, and you have a recipe for a full recovery."
However, the recovery of the Japanese tourism industry may be impeded by the ongoing row with China over the Senkaku Islands, with tourism minister Yuichiro Hata recently voicing concern that the conflict may prevent the government meeting its target of attracting 9 million foreign visitors to Japan this year.
Of the nearly 200,000 hotel nights spent by all foreign tourists in Niseko during the 2010 winter season, the Niseko Promotion Board found that mainland Chinese visitors accounted for just 6,100 nights.
The Niseko Promotion Board predicted last year that bed nights by Chinese visitors would top 40,000 within five years, though this was before the 3/11 disasters and the flareup over the Senkaku Islands.
With winter on its way to Niseko, Findlay is already making preparations for a busy 2012 season.
"Bookings for this season are very good, with most places already near to full through the busy period," he says. "New buildings, restaurants and cafes will open this season, which will make the ski infrastructure better."
One reason for optimism is that Niseko is expected to have a great snow season this winter, while Europe and North America are coming off the back of mostly bad seasons.
The anticipated return of guests to the town has prompted Findlay to provide a "cat skiing" escort service from this year, which entails a trip in a snowcat, a truck-sized vehicle with caterpillar tracks, to areas off the beaten track where skiers can potentially have an entire mountain to themselves.
"This is receiving a lot of attention and bookings from skiers around the world," he says.
Uehara has also found the general mood in Niseko to be "very positive," with heavy bookings already made for this winter and a lot more construction taking place in the town.
"This is very different from a year earlier," he says.
The strong yen will continue to pose an obstacle for some international travelers, but Uehara still expects a lot more tourists and skiers to visit Niseko this winter.
"Those who love Niseko and the snow here will always come back," he says.
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