Several dangerously dilapidated and abandoned hotels in Nikko’s Kinugawa onsen district have the city concerned. 

The city has identified 16 abandoned hotels and ryokans in need of action. Three hotels have fallen into a dangerous level of disrepair, with the owners nowhere to be found. The 8 and 10-story concrete buildings are located on cliffside land between Kinugawa River and the national highway and have been closed for 10 ~ 20 years.

Land values have been on a constant decline since the 1990s. Some locations are down as much as 80% from the peak in the early 1990s and have dropped 25% over the past 10 years. As land values plummet, so too does city tax revenue from property taxes. A limited city budget makes demolishing these eyesores out of reach. 

This past financial year, the Japan Tourism Agency started a financial assistance program to provide up to half of the costs, not exceeding 100 million Yen, to cities and towns and businesses looking to demolish abandoned hotels and buildings in tourist areas, as long as the vacant land is re-used for public use. Sounds great, right? 

Not for Nikko City. The city planned to apply for aid for the demolition of three abandoned hotels but was not able to qualify due to the difficulty in re-purposing the land after demolition. Many of the abandoned hotels are on steep cliffside land that cannot be re-used. 

The sheer size of the hotel buildings and their precarious cliffside position will also make them extremely costly to demolish. Some estimates are in the several hundred to several billion Yen range. The 100 million Yen limit from the program may not come close to covering the cost.

Leaving them to rot is also a dangerous option. The abandoned hotels are prime targets for trespassers and arson. They are also filled with asbestos, likely to be airborne due to the crumbling state of the interiors. 

The Kinugawa Onsen district is located alongside Kinugawa River in Tochigi Prefecture. It, along with Hakone and Atami, has historically been known as one of the top three hot spring playgrounds for Tokyo residents. 

The first hot spring source was discovered on the riverbank in the late 1600s. From the mid-1700s the area became popular with feudal lords and Buddhist monks as a stopover during a pilgrimage to Nikko. The onsen became accessible to the general public in the late 1800s. Hotel and ryokan development took off in the 1920s, encouraged by the opening of the Shimotsuke Railroad in 1929 (now the Tobu Kinugawa Line). The Kinu Express, introduced after WWII, shortened the duration from Tokyo, quickly making this one of the leading large-scale hot spring resort areas in Japan.

Following the collapse of the asset bubble in the early 1990s, fewer group travel and company trips saw most of Japan’s resort areas, including Kinugawa, take a hit. Being over 2 hours from Tokyo made Nikko lose out to the slightly closer districts of Atami and Hakone.

Many hotels and ryokans managed to stay open due to generous refinancing conditions in the 1990s, but an end to easy credit conditions in the early 2000s saw several bankruptcies. 

There are approximately 40 hotels and ryokans in the Kinugawa Onsen district, along with resort-style apartments and corporate retreats. In 2019, the district had 2.01 million hotel guests. In 2021, this number had halved to 1.04 million.

Sources: 
Yahoo Japan News, January 18, 2022.
The Yomiuri Shimbun, January 9, 2022.
Abema Times, January 6, 2022.

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