Ski town defies Japan's gloom with population boom

Niseko Green Farm owner Ben Kerr started visiting the area for skiing in 1996. He then stayed for a summer and "then decided to stay". His farm produces organic vegetables which are sold to local restaurants.
Niseko Green Farm owner Ben Kerr started visiting the area for skiing in 1996. He then stayed for a summer and "then decided to stay". His farm produces organic vegetables which are sold to local restaurants.PHOTO: BLOOMBERG

Hokkaido town's economic rise attracting local, expat workers who become residents

TOKYO • Japan's shrinking population has weighed on the world's third-biggest economy, alarmed government forecasters and turned some rural communities into ghost towns.

Not so in Niseko, a ski resort community in the country's mountainous, northern island of Hokkaido that is prospering in the face of all the demographic gloom.

The local government has embraced immigration in a way the national government has not. The area's booming economy has spurred investment in luxury hotels, restaurants and shops - and attracted local and expat workers who have become full-time residents. 

Niseko's population grew 2.9 per cent last year to 4,952, compared with 2010 levels - the highest mark in four decades. Nationwide, the population slid 0.7 per cent over the same period.

"There haven't been any other towns that have been this successful before," said Mr Tatsuya Wakao, a consultant at Fujitsu Research Institute.

"They did a good job in recognising the need for foreign tourism."

Niseko's population grew 2.9 per cent last year to 4,952 compared with 2010 levels - the highest mark in four decades. Nationwide, the population slid 0.7 per cent over the same period.

True, not every rural community is blessed with the ski slopes and hot springs that Niseko enjoys.

Should the town's much larger neighbour Sapporo win its bid to host the Winter Olympics in 2026, Niseko would host the alpine events for the Games and enjoy an economic windfall.

That said, other Japanese ski resorts and tourism centres have fallen on hard times and Niseko offers broader lessons to all struggling rural towns about the power of savvy and sustained marketing, as a rising middle class in Asia broadens the region's tourism opportunities.

Mr Seiji Ohsaka, who served as mayor of Niseko from 1994 to 2005, realised early on that he needed to turn his town into a must-see resort destination.

He dispatched staff to Hong Kong, Taiwan and Vail, in Colorado, to talk up Niseko and study its competitors. As a result, the number of visitors during the ski season has surged in the past six years. Last year, it hit a record 811,000 visitors.

"I knew it would be impossible to turn around the domestic market, which is why I sent staff overseas on promotions," says Mr Ohsaka.

"I opened their eyes to the outside world. You can't only know your own town if you want to be a tourist destination."

The intelligence-gathering efforts paid off. The number of foreign tourists has increased more than 10-fold over the past 11 years.

The majority of tourists last year came from Asia, led by Hong Kong, with about 35,000, followed by China with about 30,000, then Taiwan and Australia. 

The popularity of the area is also shared with neighbouring town Kutchan, which also has slopes on the shared mountain, and where many hotels are being developed.

What used to be a sleepy scenic ski resort just a decade ago is now home to numerous new hotels and shops carrying English signs that are more commonplace in Tokyo than the Japanese countryside.

Residential land prices in the town are increasing at the fastest pace in Japan, surging 20 per cent as of January, compared with a decline overall in Japan.

The area has the most snowfall on average of any major resort in Asia, and is second-highest in the world, behind only Mount Baker in Washington state. Niseko was rated the best ski resort in Japan last year, the third year in a row, by the World Ski Awards.

It is not just tourists from overseas that are helping Niseko's economy. Locals are also going abroad to learn new techniques to expand their business.

Mr Mamoru Takahashi, founder and president of Milk Kobo, which runs a dairy farm, shop, cafe and restaurant in Niseko, sent his wife and two staff members overseas to study cheese making in Italy. He plans to add a cheese factory, making mozzarella and other types of Italian-style cheese to sell to restaurants and shops.

"I never imagined Niseko would turn out like this," said Mr Takahashi, the third generation of his family to live in Hokkaido. "It's great to have lots of young people coming here. We can see different cultures coming together."

Further out, the city should get a boost from the extension of a bullet-train line to Sapporo, with a stop in Kutchan, in 2030. The link will shorten the travel time by train from Tokyo by about three hours, to about four and a half hours.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on August 27, 2016, with the headline 'Ski town defies Japan's gloom with population boom'. Print Edition | Subscribe