The winter ski resort district of Niseko in Hokkaido has been home to the highest land price increases in Japan for the past few years as it undergoes a rapid change into a high-class ski destination for Asia’s wealthy. However, the boom times may have come to a crashing halt as the novel coronavirus wreaks havoc with the tourist-dependent town.
Kutchan Town has 530 accommodation facilities, a growing number of which are luxury accommodations. Aman is opening a 30-room boutique hotel along with villas that are rumored to come with price tags of over 2 billion Yen each (approx. U$18 million). Multi-million dollar homes and ski-in ski-out condos are the norm, with pricing on par with the luxury home market in Tokyo and other international cities. The town welcomed 460,000 overnight guests in 2018, a third of which were foreign tourists. Some hotels report as many as 95% of the guests are foreigners during the winter ski season.
This ski season, however, has seen revenues at some Niseko hotels drop by 40%. Restaurants are also feeling the pinch with one reporting that 70% of reservations from mid-February onwards had been cancelled.
An Otaru-based real estate brokerage that specializes in sales in Niseko has been receiving a barrage of property inspection cancellations from investors from China and other countries since February and is expecting this year’s sales to be cut in half. Phone and video chats with offshore buyers have not resulted in actual transactions as the buyers are unable to fly over to complete the necessary purchase procedures.
While the current worldwide economic outlook looks uncertain at best, sales to offshore buyers have essentially ceased for the time being. Resort areas that rely on foreign tourists are being hit hard by the coronavirus and travel restrictions. Investors are also keeping their distance from tourist-reliant towns until there are signs of a recovery.
Source: NHK, March 25, 2020.
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