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Niseko offers paradigm for successful tourism in Japan

By: Debbie Howard

I first visited Niseko-Hirafu in 2003, near the beginning of the “Aussie tourism explosion.” Since then, it has blossomed into a “global ski resort” destination that has attracted foreign investment to all four base areas under the Niseko umbrella.

Originally developed in the 60s, the ski area trundled along until 2002, when its potential to be “more” was recognized by visiting foreigners. Niseko boasts world-class powder from December to March, but visitors can also enjoy summertime, with whitewater rafting, golf (4 courses), hiking . . . even fly fishing and parasailing.

Considering the investments that have been made over the past 5 years, it is clear that many agree that Niseko’s charms have the ability to draw larger numbers of tourists, especially from outside Japan.

For example, Citigroup’s Hilton Niseko Village is a 506-room conversion of the Niseko Higashiyama Prince Hotel that opened July 2008, and is billed as “Asia’s Premier Mountain Resort Destination.” At Annupuri Kokusai, the West Paces Hotel Group has plans to build a luxury resort called Capella Niseko, an 80-room hotel (each with its own hot springs bath), 150 villas and condos opening in 2010.

Foreign tourists visiting Niseko have dramatically increased to 24,000 in 2007, up from 14,000 in 2006 (a 42% increase!). Seventy percent were Australian, due in large part to Australian investment presence since the very beginning; however, visitors from New Zealand, England, China, Korea, Hong Kong and Taiwan are also increasing.

The sheer volume of foreign tourists in Niseko has forced the evolution of certain amenities, and the situation serves as a guideline for how inbound tourism might be nurtured in other areas of Japan.

With every year, a visible influx of investment and tourism has brought more restaurants, bars, shops, pharmacies, transportation modes, etc. The infrastructural business opportunities — both large and small — are endless.

Certainly, having an abundance of natural beauty and outdoor activities has worked to Niseko’s advantage. But aside from that, its success can largely be attributed to a few pioneering Australians who helped develop both winter and summer activities, and then promoted their quality and accessibility back home. Once investment money started pouring in, so did the flights to bring more visitors — and the word spread.

There have naturally been downsides; some locals worry about unbridled development, and there has been hesitancy for local firms to create businesses targeting foreign tourists. However, Niseko is evolving, and problems are being addressed. One example is that of a Tokyo-based development firm that wanted to build a condo complex twice the height allowed by local non-binding guidelines. Ultimately a new law was created that limits the “density, height and color” of any complex built — a move that many developers agree is a good way to help protect against overdevelopment.

Overall, the result has been extremely positive, with many young people now able to remain in their hometowns rather than migrating to larger cities to find jobs. The prosperity is also attracting new residents. A case in point is my ski instructor, a 30-year-old male from Hiroshima who had always dreamed of having his own ski school. He moved to Niseko, started his business, and then moved his parents up for their retirement. They are ecstatic with the quality of their new and better life.

Debbie Howard is Chairman of CarterJMRN and President Emeritus of the American Chamber of Commerce in Japan.

Originally Published in Nikkei Weekly, 1st September 2008

CarterJMRN is a strategic market research agency that has been helping clients with consumers and businesses in Japan and beyond since 1989.

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