Niseko gears up for a post-COVID era
Amid the pandemic, inbound tourists have vanished from Hokkaido’s Niseko area, which has turned into an internationally popular resort. This is the first story in a series titled Niseko gears up for a post-COVID era, which examines how the local tourism industry, domestic and foreign developers and investors are preparing for the end of the pandemic.
*The original article was posted in Japanese on the Hokkaido Shimbun Press website ( https://www.hokkaido-np.co.jp/ ) in late October 2021.
Niseko gears up for a post-COVID era（３） Businesses and town clash over construction regulation in Hokkaido's resort area
In December 2020, the operator of Yotei Sanitation Center, a manure treatment facility for six nearby towns and villages, purchased a 0.7-hectare lot adjacent to the center located close to National Route 5 in Kutchan, Hokkaido, for a planned renovation.
The operator actually did not have a design plan and construction won’t start for another four years, but it secured the land anyway out of concerns that the price may get too high in the near future.
Since the area, surrounded by a rich natural landscape, is close to both the center of the town and the nearby resort, it has been attracting foreign investment in recent years while new hotels were expected to be built.
The growing foreign capital prompted the operator of Yotei Sanitation Center to purchase the land in a rushed manner. “If the land prices soar, we might not be able to rebuild the facility,” said Naoki Kimura, who heads the facility.
■Deteriorating natural environment
While Niseko has seen an influx of foreign investment, some investors are actually “troubled” by properties that they purchased, as the situation has changed.
A Chinese-owned investment company, which purchased a 3-hectare golf driving range in Kutchan in 2019, is one of them.
In June, it was learned that the town of Kutchan is considering introducing regulations to ban the construction of accommodation facilities on National Route 5.
The idea of the regulation came as a total surprise to investors, who told a real estate agency that mediated the deal, “Niseko would not be worth investing in if the area would not be expanding further.”
Rapid development in the past decade has made Niseko an international resort, but it also led to destruction of the natural environment, which marred some of the beautiful scenery significantly.
“We need to create new regulations to create a high-quality, sustainable resort,” said Kutchan Mayor Kazushi Monji, who grew up in the town and shared a strong sense of crisis.
■ Growth will stop
Meanwhile, Ross Carty, who runs a real estate business in Kutchan, believes that the town’s idea of tightening its regulations won’t do any service to the region.
“We have the shinkansen line slated to be extended to this area and the restrictions won’t do any good,” he said. “We should get government subsidies to improve the ski slopes and infrastructure instead.”
Local businesses and the town have also been clashing head-on in town committee meetings over Kutchan’s plans to impose tighter regulations to maintain the scenery.
Committee member Ross Findlay, an Australian who has helped develop the Niseko area, expressed concerns, saying that it will stop the growth of the resort.
However, the town is refusing to budge.
“It is important to use the land under a controlled quantity,” a Kutchan town official in charge said, stressing that the town plans to start imposing the regulations in the summer of next year.
At a regular town assembly meeting in mid-September, Yoshihito Tanaka, a town assemblyman, also proposed imposing new taxes on condominium owners and developers.
“It’s costly to develop infrastructure for resorts. It would be necessary to introduce a new tax to maintain fairness” with local residents, he said.
Monji agrees. “I’m making it clear that we are actively considering such a move.”
With the town shifting its stance for tighter regulations and greater burdens on businesses, Findlay is skeptical if it is the best way forward for Kutchan.
“I can’t see (tourism in the town) grow further,” said Findlay. “I feel like the town is hampering its future potential for growth.”