Japan - February 2024

S P OT L I G H T
Savills Research

Japan Hospitality Ski Resorts

Retail sales in Beijing were up 4.4% year-on-year to RMB539.8 billion in 1H 2018

Japan Hospitality - Ski Resorts

Encouraging growth potential observed
across various upscale ski destinations• Japan is currently experiencing
an inbound tourism boom, but
average spending per inboundtourist is still relatively low
and has large room for further
growth.
• Skiing in Japan reached its peakdomestic popularity in the mid1990s and entered a decadeslong period of stagnation, withmany available opportunities forredevelopment.
• Japan’s relative affordability,
enviable weather conditions, andits proximity to nearby booming
economies have attracted
growing numbers of inboundwinter sports enthusiasts, whose
demand has begun to revitalise
the sector.
• Japan is now globally
recognised as a ski destination.
Visionary players are deploying
significant amounts of capital
to redevelop ski resorts acrossthe country, integrating luxury
accommodation and services, inorder to compete globally withother major high-end resorts.
• We anticipate a steady
expansion in the demand forhigh-end experiences globallyas income inequality progresses
in many economies, and Japan
is well-positioned to adeptly
capture much of this demand.
• G iven the world-class snowfallthat Japan periodically receives,
major Japanese resorts should
prove resilient in the face ofa warming global climate andundoubtedly possess strong
potential to become leading
sustainable winter destinations.

only a handful of upscale onsen ryokan andresorts aimed exclusively at wealthy Japanesenationals. The evolution of ski resorts appears
to have followed a parallel trajectory.
Skiing reached its peak level of popularity
in Japan in the late 1990s, when Japan held
the Nagano Winter Olympics in 1998. The
growth in participation by Japanese nationals
in skiing (Graph 1) coincided with Japan’s
rapid economic expansion, with a peak ofover 18 million active skiers1 recorded in 1998,
according to the Japan Productivity Center.
During the 1990s, significant investments were
1 Also includes people who snowboard

GRAPH 1: Participation by Japanese Nationals in skiing, 1987 to 2020
20
18
DOMESTIC SKIERS (MILLION)• Japan’s tourism industry was
historically geared towards
domestic guests, and received
very few inbound tourists. As
such, the high-end segment has
generally been underdeveloped.

16
14
12
10
8
6
4
2
0

Source Japan Productivity Center, Savills Research & Consultancy

GRAPH 2: Number of Ski Resorts in Operation* in Japan, 1999 to 2022
800
700
600

SKI RESORTS

SummaryBACKGROUND
Until the 2000s, Japan was not on the radar asa global tourism hub. Entry into the country
for many foreign travellers was cumbersome,and prices were prohibitively expensive due tothe strong yen. Japan was not geared towards
the needs of international travellers, withscarce foreign-language support. Indeed,
the tourism industry of the country used tofocus on its large domestic travel market,
with little emphasis on catering to foreign
visitors. As such, the high-end market did not
grow to a comparable extent to those of othercountries such as Switzerland and France, with

500
400
300
200
100
0
1999

2004

2009

2014

2018

2019 2020 2021 2022

Source Japan Funicular Transport Association, Savills Research & Consultancy* Resorts featuring at least one ski lift.
Note: Data recorded at four/five year intervals between 1999 and 2018.

savills.co.jp/insight-and-opinion/2

Japan Hospitality - Ski Resorts

made into developing ski resorts, and Japanboasted one of the greatest numbers of ski
resorts in the world at 700 facilities (Graph 2)
to service the booming domestic demand.
That said, Japan’s winter sports industry
entered a long period of decline after the late
1990s. The country’s economic stagnation as
well as the declining number of customers
caused many resorts to experience
difficulties. The number of active domestic
skiers in Japan fell consistently to lower than
5 million in 2022. As such, many resorts havegone out of business, with only those in themost popular locations such as Niseko and
Hakuba continuing to prosper, and the total
number of resorts in operation has fallen
to less than 500. A lack of investment has
resulted in noticeably ageing infrastructure,
antiquated accommodation, and a shortfallof local services and amenities, with manypotential workers from local communities
instead choosing to search for work in larger
urban areas.
Although domestic demand weakened
in line with economic stagnation, theWinter Olympics in Nagano likely put
Japan on the map globally as a premier ski
destination, and marketing campaigns,
especially by Niseko heavily targetingskiers from overseas, led to new demand. In
recent years, the growing market of wintersports enthusiasts from Asian nations
has propagated further increments in
inbound tourist numbers and subsequently
investments into winter sports resorts inJapan. For instance, the number of foreignskiers in the Hakuba Valley increased

Japan is presently witnessing asurge in inbound tourism. Although
an increasing number of repeat
visitors are exploring Japanese ski
regions, upscale resorts remain
underdeveloped, presenting
ample opportunities for growth.
Forward-thinking industry leaders
are investing substantial amountsof capital into promising areas,
anticipating significant expansion andheightened demand. These ambitious
development initiatives may herald
the emergence of additional
destinations akin to Niseko, and theoutlook for expansion in this sector is
promising, paving the way for Japan’s
evolution into a sustainable winterresort destination.

significantly in recent years (Graph 3). Many
hotel and local business owners recognised
the economic value of inbound travellers,
who tend to spend more time and money
in resorts and surrounding towns. As such,major players have identified the wintersports industry in Japan as one ripe with
opportunities, and the current surge indevelopment activity coincides with theoverall inbound tourism wave that Japan
appears to be riding to great success.

GRAPH 3: Number of Inbound Skiers in Hakuba Valley, 2013 to 2023
400

INBOUND VISITORS (THOUSAND)

350
300
250
200
150
100
50
0
2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Source HAKUBAVALLEY TOURISM, Savills Research & Consultancy

3

PREMIER EXAMPLE: SWISS SKI
INDUSTRY
To assess the potential of ski resort
developments in Japan, this report looks at
Switzerland as a successful model. Given
Switzerland’s geography, winter sports
and summer resorts have played a leadingrole historically in the development of its
hospitality sector. The wider Swiss tourism
and hospitality sector employed over
250,000 people, or roughly 5% of the national
workforce, and comprised roughly 5% ofJapan Hospitality - Ski Resorts

Swiss GDP in 2022 (US$818 billion2). The
country attracted around 12 million overseas
visitors in 2022, generating a total revenueof US$17.4 billion3 from inbound tourism.
Alpine resort towns such as Zermatt,Verbier, and St. Moritz, which twice hosted
the Winter Olympic Games, have become
universally recognised destinations for
wealthy winter sports enthusiasts, andSwitzerland’s tourism industry is now
synonymous with luxury hospitality.
Switzerland’s luxury tourism model has
seen major success thus far. There are 79
five-star hotels in Switzerland, which, relative
to the number of inbound tourist arrivalsof 12 million in 2022, is a large figure. In
comparison, France, which received 79.4
million inbound arrivals in the same year, has
184 five-star hotels, translating to a far lower
ratio of five-star hotels per inbound visitor
than Switzerland. Moreover, Switzerland’s
average revenue per inbound visitor in 2022
amounted to US$1,450 per visitor, while
France, which routinely receives the largest
number of annual overseas visitors, recorded
total revenue from inbound tourism of
US$59.7 billion, translating to US$750 per
visitor, which is significantly lower than thatof Switzerland.
Looking at resort operations, average
weekly prime rents in a two-bedroom
apartment in the upscale resort Verbier were
€5,1004 during the winter ski season in 2023,
while a chalet would cost €12,000 for a week.
Elsewhere, in Andermatt, average weekly
prime rents two-bedroom apartment would
cost just shy of €3,000 over the same period.
These cities have many other luxury hotels
2 According to figures by The World Bank.
3 2022 average exchange rate of US$1 = CHF0.95 according
to Credit Suisse.
4 Please refer to “The Ski Report, World Residential – Winter2023/24” for further information.

that likely have even more premium prices.
While Switzerland has achieved notablesuccess in cultivating its luxury tourism
industry, it appears that prospects for future
growth may be limited. Firstly, the cost oflabour is extremely high, and the hospitality
sector faces severe worker shortages.
Indeed, Switzerland is one of the world’s
most highly developed economies, witha highly educated and skilled workforce,and is home to leading financial andpharmaceuticals companies, which areable to offer more attractive compensation
packages to workers. Meanwhile, although
it is a potential solution that is often touted,
raising immigration levels appears to be asensitive political issue in Switzerland, andappears unlikely to be utilised as a method
to resolve the issue in the near future.
From a visitor’s perspective, Switzerland
has become prohibitively expensive for a large
proportion of international travellers. Many
professionals, even those in high paying jobs,
may feel priced out of Switzerland’s famous
alpine resorts, and may instead opt forneighbouring France, Italy, or Germany.
JAPAN TRENDS IN INBOUND
TOURISM
Inbound tourists have become an essential
pillar supporting the tourism industry
in the country, and the large rebound ininternational tourist arrivals since thepandemic has certainly brought a renewed
sense of optimism for the sector. Indeed, thenumber of international visitors is not only ataround record levels as of Q4/2023, but also
the post-pandemic era has seen the averageamount spent per visitor hit significantly
higher levels than those observed over the
past decade.

GRAPH 4: Average Amount Spent by Each Inbound Tourist* vs US$/JPY Exchange
Rate, 2014 to 2023
Amount Spent (LHS)

US$ to JPY (RHS)
160

250,000

140
200,000

120
100

JPY

80
100,000

60

US$/JPY

150,000

40

50,000

20
0
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4

0
2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Source Japan Tourism Agency, Savills Research & Consultancy* Data points during the pandemic are either unavailable or omitted.

savills.co.jp/insight-and-opinion/

4

A myriad of factors have contributed tothis remarkable growth. For instance, Japanwas ranked as a top destination to visit bymultiple institutions, including the World
Economic Forum in 2021, which contributed
to building a substantial amount of pentup demand to visit the country, which was
released when the country opened its borders
to visa-free inbound tourism in October
2022. Secondly, the yen has significantly
depreciated against most currencies as many
countries, most notably the United States,
have increased interest rates, in contrast
with Japan sticking with its monetary easing
policies. The weak yen has undoubtedly
provided a considerable amount of additionalpurchasing power to most international
visitors to the country.
However, while currency fluctuations arecertainly an important factor, a considerable
proportion of growth is likely organic andunrelated to currency. Between 2019 andQ1/2020, average spending appeared to beon an increasing trend even though the valueof the yen was relatively unchanged. Indeed,Japan ran extensive marketing campaigns
promoting higher-end inbound tourism inthe country leading up to the 2020 Tokyo
Olympics, and has also seen infrastructural
improvements like an increased number ofduty-free shops, and greater frequencies
of direct flights into the country. These
activities can be quantified when looking at
the budget of the Japan Tourism Agency andthe amount of funds dedicated to improving
and promoting inbound tourism (Graph 5).
These factors have also played a significant
role in improving Japan’s status as a popular
tourist destination and increasing thenumber of visitors, especially high-spendingones, and have likely assisted in increasing
spending as well.
In particular, among inbound visitors toJapan, those looking to participate in wintersports generally provide a relatively large
economic benefit to the economy as opposedto general sightseers. Indeed, according to the2019 White Paper on Tourism in Japan by theJapan Tourism Agency, average per-person
spending by inbound tourists engaged in
winter sports was around JPY225,000, farlarger than the average per-person figure spentby inbound travellers of JPY152,000. Foreign
winter sports enthusiasts are also noted to be
more likely to spend greater amounts of timeand money than domestic travellers exploring
local areas outside their hotels when visiting
winter resorts, providing wider economic
benefits to regional economies.
Overall, Japan’s inbound tourism market
is in its prime, and momentum looks strong
with further room for growth. Tourists frommainland China have yet to see a meaningful
return, and further down the road, theJapan Hospitality - Ski Resorts

GRAPH 5: Budget of Japan Tourism Agency*, FY2011 to FY2024

80,000Inbound Tourism Related

Other Budget

70,000JPY (MILLION)

60,00050,00040,00030,00020,00010,0000

Source Japan Tourism Agency, Savills Research & Consultancy* Budget for the travel subsidiary campaign is not included. Inbound tourism-related budget calculated basedon budget items explicitly dedicated to inbound tourism.

Integrated Resorts in Osaka could be a gamechanger for Japan and attract significantly
higher spenders. Overall, the full potential
of inbound tourism appears yet to have been
unleashed, and still has greater business
opportunities that can be explored.
SKI SECTOR DEVELOPMENTS
Japan is a beacon of opportunity andpotential for this sector. The famous
powder snow in well-visited resorts suchas Niseko already attracts many wintersports enthusiasts globally. Most resorts
in Japan lack extensive accommodationand infrastructure for luxury clients, andare thus ripe for development. In addition,
relatively low wages, coupled with a growing
willingness in Japan to accept greater levelsof foreign workforce and residents will
likely keep development and operationalcosts at reasonable levels. Meanwhile, Japanis located in close proximity to several
emerging nations and a growing pool ofhigh-net-worth individuals, whose demand
for luxury experiences can be serviced byresorts in Japan. Overall, Japan possesses
many similar features and qualities that make
Switzerland a prime luxury destination, andhas yet to fully realise the growth potentialof the sector. In addition, fortifications havealready been made to the tourism industry in
the green season.
Notable progress has already been madein this regard. For instance, a moderate
luxury winter sports sector appears to havealready emerged in Niseko given its quality
and subsequent global popularity, having
been ranked #25 in Savills Ski ResilienceIndex, which measures the quality andreliability of a resort’s conditions. Indeed,some major luxury players have established apresence in Niseko, including the Park Hyatt,
Ritz-Carlton Reserve, and Aman Resorts.
Furthermore, luxury brand Louis Vuitton
opened a pop up at the Park Hyatt in Niseko
for the 2024 ski season.
The upcoming Hokkaido bullet train
extension to Sapporo, touted for completionin 2031, will stop in Kutchan and should
significantly improve the ease of travel
to Niseko from Sapporo and Tokyo. In
addition, helicopter services become
available between New Chitose airport andNiseko, especially during the high season.
Further development will likely take place as
resorts in Niseko becomes more accessible
and popular, improving the prospects of thehigh-end ski segment in the area.
A POTENTIAL SECOND NISEKO
Like Niseko, Hakuba has remainedcompetitive as a ski resort in Japan since
the Nagano Olympics, and has been inhigh demand among overseas tourists
immediately since the lifting of inboundrestrictions on entry, receiving over aquarter of a million inbound skiers in the2022/2023 ski season, moderately lower than
the figure for 2019/2020 at almost 400,000
visitors. While globally recognised for its
heavy snowfall, Hakuba has some ageing
infrastructure and accommodation that
sorely needs renovation and modernisation.
Many players have made strides in thisregard, with KANOLLY Resorts having
paved the way and opening a luxury hotelin the area. Yet, there is notably greater
demand for luxury hotels, facilities and5

infrastructure, which presents vast
opportunities for players looking to tap into
the high-end winter sports boom in Japan.
Elsewhere, Myoko Kogen in Niigata is one
of Japan’s longest established winter sports
destinations but experienced a prolonged
period of stagnation. The area routinely
receives large volumes of snow, and is also
famous for its onsen facilities, many ofwhich feature milky-white, auburn, andbronze coloured hot spring water. Given
its accessibility to Tokyo via the Hokuriku
shinkansen, Patience Capital Group (PCG)
announced its ten-year, JPY210 billion
investment plan into five resorts in the
ski town, aiming to transform the area
into a globally competitive winter sports
destination. Having reportedly collectedbids from ten global luxury hotel brands,
PCG will initially focus on building high-end
hotel facilities and accommodation for staff
by 2026, then consequently work to expand
wider retail and hospitality offerings innearby urban centres.
Although relatively moderate comparedto other resorts in Japan, Appi Kogen in
Iwate appears to have bright prospects as ahigh-end tourist destination, having been
awarded ‘Japan’s Best Ski Resort’ at the 2022
World Ski Awards. IHG Hotels & Resorts
will expand its presence in the resort town
by refurbishing and opening three hotels,
including ANA InterContinental Appi Kogen
Resort in 2022, reportedly the first luxury
resort in the Tohoku region. Meanwhile,
the world-renowned British Harrow School
opened its international branch in Appi
Kogen in 2022, with annual tuition of around
JPY9 million. These developments havehelped to raise the profile of Appi Kogen, andsignal that confidence is high in the future
growth trajectory of the area.
POTENTIAL LIMITATIONS
Despite the bright prospects of the sector,
Japan faces a handful of roadblocks in the
pursuit of its high-end ski ambitions. For
instance, Japan suffers from chronic labour
shortages, which are especially prevalent inremote areas where ski resorts tend to belocated, given the reality of Japan’s ageing
population and young talent generally
being drawn to larger urban areas in searchof work and lifestyle opportunities. The
situation is so severe that in areas such as
Niseko, businesses are offering part-timeworkers in the winter season an hourly
rate of over JPY2,000, much higher thanrates of workers in Tokyo. Nevertheless, theaverage income in the hospitality industry
is relatively low (Graph 6), which suggeststhat offering higher wages for this growing
business should be feasible in the foreseeable
future.

Japan Hospitality - Ski Resorts

GRAPH 6: Average Annual Income by Industry, 2022
8
7

JPY (MILLION)

6
5
4
3
2
1
0

Source Japan Tax Agency, Savills Research & Consultancy

Meanwhile, the development plansoutlined previously will all require significant
overhauls of ski infrastructure andaccommodation, not to mention necessary
improvements to local services and amenities,
as well as developing more comprehensive
transport access. However, labour shortages
in the construction industry are also apersistent issue that may cause delays in thedevelopment and renewal of much-needed
infrastructure, and consequently the overall
growth of Japan’s ski industry. For instance,
the Hokkaido shinkansen extension, which
was initially slated to reach Sapporo by 2030
and anticipated to improve access to the
Niseko area from Tokyo, has been plagued bydelays owing to the labour shortage, and thefull opening of the new route has been delayed
until at least 2031.

Moreover, climate change is an issue that
affects the winter sports industry globally. As
ski seasons become shorter and the averagevolume of snow falls, resort operators may
struggle to generate sufficient revenue andface financial difficulties. That said, theaverage snowfall in the distinguished ski
resorts in Japan reaches world-class levels,
meaning that they should be relatively
resilient even in a warming globe.
OUTLOOK
Japan is endowed with all the trappings of ahigh-end winter sports destination – worldclass powder snow, beautiful mountainslopes, and reputable customer service andsocial stability. Presently, Japan has finallybegun to emerge as a luxury travel hub, andas infrastructure and services are developed

further, it will become more ready to welcome
high-end visitors. With careful planningand sufficient investment, Japan’s myriad ofnatural and cultural features can underpin
growth in Japan’s high-end travel industry.
Given the shortfall of existing high-end
infrastructure and the broad horizon ofopportunity in the sector, many visionary
players have already envisioned large plans
and have deployed significant amounts ofcapital into Japan’s numerous ski resorts,
and notable progress has been made so
far in this regard. The profiles of many ofJapan’s ageing ski resorts are undergoing afundamental transformation, notably withan influx of high-end hotels and services
in response to the rapid growth in Japan’s
inbound tourism sector.
In particular, demand from inboundtourists for travel in Japan has gone fromstrength to strength since the end of thepandemic, and this encouraging trend is
expected to continue and gain momentum.
At the same time, we anticipate a generalexpansion in the demand for luxury services
globally, with income inequality progressing
in many economies and expected toaccelerate as urbanisation and technologicaldevelopment progress. As Japan transitions
to a global tourist destination, and makes
further strides in developing its high-end
travel sector, its image may graduallychange to one of “luxury”, and should allow
Japan to capitalise on inbound tourism
more effectively and earn greater revenue.
This will be facilitated by Japan’s worldrenowned hospitality, reliable and resilient
infrastructure, as well as the slew of luxury
developments in the pipeline. Overall,
prospects for high-end ski resorts in Japanare bright, and observers should anticipate
exciting further growth.

For more information about this report, please contact us
Savills Japan

Savills Research

Christian Mancini
CEO, Asia Pacific(Ex. Greater China)+81 3 4330 3611
cmancini@savills.co.jp

Tetsuya Kaneko
Managing Director, Head of
Research & Consultancy, Japan+81 3 4330 3103
tkaneko@savills.co.jp

Simon Smith
Regional Head of Research& Consultancy, Asia Pacific+852 2842 4573
ssmith@savills.asia

Savills plc: Savills plc is a global real estate services provider listed on the London Stock Exchange. We have an international network of more than 600 offices and associates throughout the Americas, the UK,continental Europe, Asia Pacific, Africa and the Middle East, offering a broad range of specialist advisory, management and transactional services to clients all over the world. This report is for general informative
purposes only. It may not be published, reproduced or quoted in part or in whole, nor may it be used as a basis for any contract, prospectus, agreement or other document without prior consent. While every effort has
been made to ensure its accuracy, Savills accepts no liability whatsoever for any direct or consequential loss arising from its use. The content is strictly copyright and reproduction of the whole or part of it in any form
is prohibited without written permission from Savills Research.

savills.co.jp/insight-and-opinion/

6