The Australian Takeover of Niseko Ski Resort

[Mulboyne]

[Taro Toporific]

....sensational value for money....

North American 5-day ski package $800-500 with r/t Oz airfare = total of $1,500USD
Japanese 5-day ski package 200-60,000yen with r/t Oz airfare = total $180,000+yen????

Damn it, help me out here. I never have to pay for skiing in Colorado and I haven't the foggiest what the best deals on airfares to the End-of-the-Earth are.

...baths have proved a highlight, as well as...nightlife

Oh, now it makes sense--- it's a sex tour.

[Mulboyne]

Stuff.co.nz: Japan's undiscovered outback a skier's heaven
It's common to picture Japan as a tangle of packed subways, freaky fashions, and high-rise architecture. Hokkaido, Japan's northern island, couldn't be more different. Best described as the country's outback, this northern pocket one hour by plane from Tokyo is still surprisingly underdeveloped: English is not widely spoken; village life is preferred; and space is abundant. For these reasons Hokkaido is also one of the few northern hemisphere zones in which you can still source a winter adventure without bumping into the rest of the world...more...

[Mulboyne]

SMH: Land of the rising fun

WHEN the actor Hugo Weaving and his family walked into the trendiest restaurant in Niseko earlier this month, it was another good omen for the Australia-driven revival of a clapped-out Japanese ski town. The restaurant, Sekka, which opened in time for record winter snowfalls, is where wealthy skiers, adventurous powder hounds, real-estate investors, business owners, entrepreneurs and celebrities - nearly all Australian - go to rub shoulders and party."It feels like New Year's Eve every night," says Sekka's owner, Shouya Grigg, 37, from Perth. About midnight on Saturday, Niseko's streets are busy with visitors - their accents muffled by scarves and footsteps absorbed in the acoustic blanket of the mountain's legendary powder. Their arrival has caused a rift in this northern Japanese town, otherwise famous for its potatoes, and sparked debate about its character, future and - more fundamentally - who owns it...more...

[kurohinge1]

This requires some on-the-ground reporting.

I plan to be there from 4 to 11 February with some following up "investigating" in Sapporo until the 18th.

I'll let you know if I find anything interesting ...

[kurohinge1]

Well, I can report that all is under control. After Sapporo's Chitose airport was closed by snow, we took a detour to Hakodate then trained it through Oshamambe (a friend's hometown) then on to Kutchan (near the Hirafu village).

Close inspection revealed that some of the "wa" of the powder snow had been disturbed by the Aussies, however, almost every night more "wa"-derful fresh powder covered the evidence.

Here's a photo of my assistant investigator & I doing our "research":



Definitely many more foreigners than the first time I went - 4 years ago. The bars and restaurants are small but plentiful and give a disproportionate impression of the FG ratio as many of the Japanese eat in their hotels, as part of their packages, etc, whereas the FG's are all out and about at night.

As to how the "invasion" is being received, I was a little surprised to hear from a number of Japanese staff working in various jobs around Hirafu (a large hotel, a combini and a pensione) that they actually preferred the Aussies as they were generally more polite and better behaved than the Japanese. They were also clear that the town was dying before the recent influx of FG's over the last few years.

After a week "on site" we continued our investigation throughout Hokkaido (to gauge the opinion of the those outside the industry) - travelling to Sapporo (yuki matsuri), Otaru (yukiakari michi) and Toyako.

Every local I spoke to seemed to have seen a recent TV piece about Niseko's Aussie boom, and a few in the tourist trade (and no, Taro-san, I'm not talking about snack bars!) even pleaded with us to direct some of the tourists their way. However, most of the FG's seemed powder-obsessed and some would not even sacrifice a day's skiing to see the annual snow festival in Sapporo, let alone penetrate Hokkaido deeper.

I was also surprised to see that the helmet-wearing ratio had increased steeply since I was last there - even amongst skiers. I used one for the first time & quite liked it - warm and handy for tree-boarding. It was also tempting to wear them out at night to cope with the very slippery roads.

I can recommend the "naitaa" (night skiing) too. Much easier to see the contours under lights at night than in the afternoon, and almost no one else on the mountain at night.

Anyone interested in going there who wants to know more, feel free to "PM" me with questions.

[GomiGirl]

A few real estate agents/property developers have "discovered" the boom too and are trying to cash in. Lots of spam recently about this.

IMHO, anybody that discovers a boom after everybody else has heard of it is too late to make any real money.

[Mulboyne]

IMHO, anybody that discovers a boom after everybody else has heard of it is too late to make any real money.

I have no idea what will happen up there but a real boom goes on longer than most people think and a lot of the money can be made in the late stage of the cycle. In fact, many early investors make less than later investors because they also tend to exit a market earlier. You often hear people repeat the story from the '29 crash that shoeshine boys were asking for stock tips which should have been a signal that the market had peaked. In the internet boom, however, the equivalent of the shoeshine boys were all heavily involved at least two years before the bubble finally burst so it may have been a danger sign but it wasn't anywhere near the peak. They started with money they could afford to lose but began to take bigger and bigger bets which left them overexposed. It's easy to make money in the late part of a boom but damned difficult to hang on to it if you get blinded by easy success. That's where early investors always have the real advantage.

With the speed at which information disseminates today, it is possible for people to know and talk about a boom without actually doing anything about it. For instance, it has been widely known that property prices in central metropolitan areas have been rising in certain pockets for years now but it is only recently that more people have decided to buy a condo. Usually that's because they have heard of a friend who has done it so the story changes from something abstract in the media to something more tangible. Or to put it another way, the costs of not doing it - of being "left behind" - suddenly outweigh the risks of doing it. So far, although there would be losses, it's unlikely that anyone who has put up money for Niseko would face financial ruin from a downturn there. If it does continue to develop into a major resort then who knows what might happen? Mind you, since I've never set foot in the place and probably never will, I'm probably just talking out of my backside. And it is an absolute certainty there are some bad investments being marketed now whatever the future of the area.

[kurohinge1]

Wise words Mulboyne-san - whether they're from your rear or not.

As one of the earlier SMH articles (I think you posted) said, "powder snow is the equivalent of oil".

As long as the punters can get there, the site will be "pumping oil".

Most northern hemisphere countries have access to closer resorts - Europe/ North America. But "southerners" (from the southern hemisphere) have to pick a place in the north (in our summer). For Oz, Japan is very accessible. I spoke to a FNQ (far north Queensland) bloke (no, it wasn't "cliffy") who could be on the snow in Niseko in 9 hours (direct flight from Cairns to Chitose then bus), whereas getting to the skifields in Oz in our winter would take him 24 hours. Plus there's only 2 hours time difference and the prices on the snow are cheaper than Oz.

Rental, lift tickets, accomodation + even food & alcohol all seemed much cheaper in Japan - the reverse of about 20 years ago, it seems. An all mountain 6 day pass in Niseko was about 24,800 yen - which is only about 60% of a similar pass in Oz at "Persiher Blue" - where you seem to queue most of the day, for short runs on moist, slow snow (compared to no queues for longer runs in sensational snow in Niseko).

One of the Aussies I met (working in Tokyo) came to Niseko because he saw a Japanese skier at Nagano "spit the dummy", throw down his stocks and complain that the snow there was no-where near as good as Niseko.

Subject to any adverse changes to air travel, or sudden interference by the J government (Koizumi was supporting the Niseko "example" to date but I read that auditors are now there trying to analyse the money flow), it is really difficult to see this as anything but the continuation of the beginning. Even the feel "on the ground" was like that - certain people had come over this year based on reports of friends who'd been there a year or two before, and no one was disappointed with the snow - they were all like kids in a candy store.

I heard that one in-bound operator reported a 40% increase in business last J-winter and a 50% increase on that this J-winter!

But it would be easy for an investor to get taken for a ride if they just wandered in without doing their homework first.

Just my 2 cents - sadly, not enough to invest.

[GomiGirl]

Without a doubt, Niseko is one of the best places I have skiied.

I was just a bit skeptical of the recent spate of "get rich quick at Niseko" property development emails and on-line articles.

http://www.yamate-homes.co.jp/niseko/english/
http://www.travelplan.com.au/resort.ski/id/7955
http://www.nisekorealestate.com.au/
etc etc

I think I prefer to spend my money on skiing in Niseko and invest my money elsewhere.

If at all possible I would prefer to sell property during a boom that to buy during one.. but maybe that is just me. Rarely do I jump on a bandwagon.

Edit: I met a property developer in San Francisco in April/May 2000 who had proudly told me she had just purchased Yahoo.com stocks for something silly like $175/share. I told her to sell them as soon as she could. I hope she did given the date that I met her. (Am I too cynical?)

[GuyJean]

Great reporting, Kuro!.. This is why I appreciate FG; the outsider's inside perspective.

GJ

[GuyJean]

Link with lots of info on Niseko; webcams, maps, snow reports, etc..

http://www.harmonyresorts.com/winter_snow_reports.htm

GJ

[Mulboyne]

News.com: Flight Centre ploughs into Japan ski fields

ONE of travel agent Flight Centre's founders, Jim Goldburg, has taken some of his fortune and ploughed it into one of the trendy investments of the moment, Japan's ski fields. Jim has teamed up with an old mate, John Wilson - who also apparently likes to slide down the slopes - in the planned development of six luxury chalets in Hirafu Village at the Grand Niseko ski resort on Japan's northern island of Hokkaido. The joint venture with John's APH property development group is planning chalets with four bedrooms and three levels of living area. John and Jim, who these days runs an investment business called Friday Group, reckon Niseko is all the go, providing easy access and being in the same time zone as Australia - and, says Jim, almost guaranteeing quality snow with an average of 15m of powder a year apparently.

[Mulboyne]

Asahi: Foreign skiers spur resort land prices to new heights

Down Under is coming up to ski, and taking land prices at a small Hokkaido resort town along with it. Thanks mainly to an influx of Australian ski vacationers, the district with the highest year-on-year rise in residential land prices in Japan, at 33.3 percent, was the Yamada district of Kutchan, west of Sapporo. The district is located at the foot of the Niseko Grand Hirafu Ski Ground. With fine powder and a scenic view of a 1,898-meter-high Mount Fuji ringer, Mount Yoteizan, the Niseko resort has proved increasingly popular with foreign powder-lovers. In fiscal 2005, Australian tourists totaled 7,700, 83 percent more than the previous fiscal year. To accommodate them, there has been a boom in condominium construction. In the bordering Hirafu district, which also serves the Niseko resort, three five-story condominium buildings are being constructed to join the eight existing ones there, according to the Kutchan town office. A joint Australia-Japan three-company consortium is also planning to open a shopping mall in the area by the summer of 2008. About 6 billion yen is expected to be pumped into the project.

[Mulboyne]

Australian: Hutchinson skis in for Japan project

QUEENSLAND construction company Hutchinson Builders will develop two luxury apartments blocks with a combined value of $35 million in Japan's emerging alpine sports capital, Niseko. Chairman Scott Hutchinson said yesterday the company had acquired two prime sites for a total of $4million in the upper village at Niseko on the island of Hokkaido, Japan's northernmost island. The company joins a procession of Australian builders, architects, developers and tour operators active in Niseko, following explosive growth in Australian, Asian and European visitor numbers to the town during the past five years...more...

[GomiGirl]

Anybody have a contact for a good travel agent for a Hokkaido ski trip over New Year?

Anybody who wants to join me and some friends for 10 days of skiing please let me know.

[IkemenTommy]

Anybody have a contact for a good travel agent for a Hokkaido ski trip over New Year?

Anybody who wants to join me and some friends for 10 days of skiing please let me know.

10 days with GomiGirl? Holy shit. That's like a dream come true for many!

[Mulboyne]

[Charles]

[Blah Pete]

Sounds like what the japanese did to Hawaii in the80-90's.

[kurohinge1]

. . . ozzie (sic) . . . [usual rant]

[Mulboyne]

Business Week: Japan's Ski Areas: The Next Investment Bonanza?

A feature of Japan's economic recovery has been savvy investors making a mint by acquiring, sprucing up, and selling diverse assets ranging from failed banks to bunkered golf course operations. Could ski resorts be the next big investment opportunity? A couple of announcements in December suggest that might be the case. On Dec. 8, Citigroup Principal Investments Japan, a unit of Citigroup (C), acquired 12 ski resorts from Prince Hotels, a Japanese hotel group, for $52 million. A few days later Hoshino Resort, a Japanese resort operator with ties to Goldman Sachs, revealed it planned to spend around $119 million over the next five years to spruce up failed ski resorts acquired in 2003 and 2004. Goldman isn't participating directly in the deal, but has a joint venture partnership with Hoshino to help turn around 50 hot springs or onsen resorts in 2005. More deals could follow. Prince Hotels, a big ski-resort operator, is eager to offer up more of its slopes. The group plans to sell another 13 resorts by the end of March, 2007. But perhaps more important is that ski resorts in Japan have the potential to be money-spinners if properly managed.

Indeed, just as investors like Goldman Sachs and Texas-based Lone Star Group, which has a stake in Japan's largest golf course operator, have made vast sums turning around troubled golf courses, new investors in Japan's ski resorts are convinced they'll strike gold on the slopes. "I'm confident we can get more people skiing again," says Yoshiharu Hoshino, president of Hoshino Resort. One reason for the interest is that many operators made ill-judged investments in ski resorts at the height of Japan's real estate bubble in the late 1980s and early 1990s. While Japan's bad-loan problems are on their way to being resolved, ailing ski resorts are still available at reasonable prices, particularly if their owners must sell. Citigroup bought its resorts from Prince Hotels for $21 million less than their book value. What's more, after years of under-investment, there's potential for improvement in the Japan skiing experience. Hoshino says that that many struggling ski resort operators have lost sight of who are their core customers. Rather than focusing on families and older skiers, most still target Japan's younger generation. That's not the smartest move in a country where 20.4% of the population is over 65...more...

[GomiGirl]

Am heading up there tomorrow. Shall report on findings of the Aussie takeover.

[kurohinge1]

I don't think GG is in this clip, but here's some vision of what you can expect in Niseko:

[YT]1AmCs5MsqrY[/YT]

"niseko powder hokkaido bonanza"

[GomiGirl]

Yep that is pretty much what it is like here. I am taking a day off as I am a bit sick - just a cold so nothing fatal. Have been mainly skiing but spent the day on a snow board the other day. Am battered and bruised as it was my first time but by the end of the day I was managing to get down the family slope without falling on my arse!!

[Captain Japan]

Hokkaido locals want their own slice of secret Aussie winter wonderland at Niseko
Mainichi

Crickey! Folks from Down Under are on the verge of turning a rundown, backwoods Japanese town into an international resort area with more bounce than a kangaroo, according to Shukan Shincho (2/22).

Sleepy Kuchian in Hokkaido was until a few years ago a virtual no-man's land; but now it's packed with foreigners who are turning it into one of Japan's hottest ski spots -- with virtually no Japanese even realizing it.

Most of the non-Japanese are Australians headed for the Niseko ski resort, tucked away in an area of Kuchian that had been largely ignored up until recently.

Shukan Shincho notes the influx of Aussies started after the Sept. 11 terror attacks. Australians who had until then spent their summer vacations at ski spots in Europe or North America began looking for safer alternatives unlikely to attract the attention of terrorists, and their eyes fell on Niseko, which had barely attracted attention from anywhere....more...

The part about most of Japan not realizing the situation is spot on. I did some work with the Tokyo Metropolitan Tourism Board and they literally had no idea what I was talking about after I mentioned it.

[Greji]

Yep that is pretty much what it is like here. I am taking a day off as I am a bit sick - just a cold so nothing fatal. Have been mainly skiing but spent the day on a snow board the other day. Am battered and bruised as it was my first time but by the end of the day I was managing to get down the family slope without falling on my arse!!

Then it was you in Kuro's video that cannon-balled into that little pot hole?

[GomiGirl]

The main thing that has caused this influx of Australians is the massive amounts of local advertising and marketing that we just don't see in Japan. Every Australian I spoke with in Niseko said that it is the ski destination that EVERYBODY is talking about within Australia but apart from a few newspaper spots and websites in English, people in Japan just don't see it.

Am not surprised that the locals are scratching their heads in surprise.

If I would suggest a business opportunity in Hirafu it is for a second convenience store/supermarket. The only combini (SeicoMart) is packed every day and can't really keep up with the demand.

[kurohinge1]

The main thing that has caused this influx of Australians is the massive amounts of local advertising and marketing that we just don't see in Japan. Every Australian I spoke with in Niseko said that it is the ski destination that EVERYBODY is talking about within Australia but apart from a few newspaper spots and websites in English, people in Japan just don't see it.

Am not surprised that the locals are scratching their heads in surprise.

If I would suggest a business opportunity in Hirafu it is for a second convenience store/supermarket. The only combini (SeicoMart) is packed every day and can't really keep up with the demand.

When I was there last year, there was a second combini half way up the hill (opposite Pension Berg), which was smaller and much less crowded. They also had a pay phone cleverly placed OUTSIDE, which naturally made for short calls! Still, they had plenty of chocolate (including Melon Kit-Kats) and other treats.

And how about the 100 Yen noodle shop just down from there? What a great way to fill up for dinner & still finance a jokki of lager or two.

I think Shukan Shincho's theory about any link between the popularity rise and 9-11 is, with respect, crap. Basically, Japan skiing had a reputation for being expensive and hard to get to (particularly due to the language barrier). When a few pioneering companies convinced people otherwise, the customers started trickling over from Oz, then went home singing the praises of the best powder snow they'd ever seen, and then word quickly spread, causing a snowball effect.

Nothing to do with terrorists other than the many pirates at other resorts around the world who charge a fortune for everything.

I just fear that those pirates are not far behind, though, and before long Niseko will be just another expensive and crowded resort (albeit with fantastic powder and rotenburo). So, get in while you can.

[amdg]

No doubt the exchange rate moving from 1Aud:65Yen to 1Aud:94Yen over the last decade hasn't hurt either.