What Financial Crisis?
Posted by Jim Ivanoff
January 4th, 2009
For fiscal 2008/09 BC Wood has been conducting research on the Japanese resort market as foreign investment funds had been buying up properties for several years. Unfortunately the credit crunch hit just as we began conducting our research. We are still trying to evaluate how big of an impact the financial crisis is going to have, but recently some positive news has been coming out of Japan's most talked about ski resort.
Niseko has really been the leader in raising the profile of Japanese resorts in Asia so it has been natural to wonder if all of the development there would come to a halt under the current conditions. Surprisingly the Citibank banked Niseko Village has just announced bullish plans to add over 1000 condos and resort homes in addition to new leisure and commercial properties on land adjacent to their newly renovated Niseko Hilton. It is expected that construction will start this fall and will take 10 years to complete.
While it seems odd to be announce such a project with a strong Yen discouraging inbound tourism as well as an ongoing credit crunch, the operators of Niseko Village now seem to be targeting domestic Japanese travelers and in particular the retiring baby-boomers. This target segment has the money and now the time to enjoy life. They are also of great interest to the domestic tourism industry as they seem to be more worried about going abroad due to safety concerns. To appeal to them they want to build a world-class "village" (can you say Whistler?) as well as a new beginner friendly ski area. It is felt that such amenities will also appeal to Asian travelers.
Hopefully this announcement is an indication that Niseko in general is well placed to continue growing even in these tough times and thus offer Canadian manufactures with new opportunities. Next week I will be going to Hokkaido to visit clients and the Niseko area will be my first stop. I hope to have more good news to report then!
By Jim Ivanoff
BC Wood Japan Office