Crunch Time for Foreign Ski Business in Japan

It’s crunch time for foreign owned ski businesses in Japan.

Aussies and others with snow based businesses there have a big call to make: do they go, face a reduced and restricted season without international clients, and the prospect of COVID-19 surging over winter with further restrictions on travel and business operations in Japanese ski resorts? Or do they stay away, and take a total hit?

Snow Action caught up with several long term Japanese snow business owners facing this dilemma. All have worked hard to create and grow excellent businesses, in resorts including Niseko, Furano, Hakuba, Myoko and Madarao.

This crisis comes on top of last year’s mild winter (the least snow in over 100 years according to locals at Shirakawa-go gassho village), which went from bad to worse when foreign tourism crashed due to international travel bans in March.

Niseko Photography and Guiding is one of the best and most respected guiding outfits in Niseko.

Owners Darren Teasdale and Elsie Neilsen have owned and grown the business for the past 8 years, with things getting a little more complicated lately by adding a three year old and a one year old to the equation. Both their kids were born in Hokkaido.

“Last season was crazy, the snow conditions killed us” says Darren. “It would snow a foot then rain buckets, so there wasn’t much powder to be found close by Niseko and the cat skiing couldn’t operate. Because conditions were not ideal we were not prepared to take clients out. This meant a significant downturn in the amount of tours we provided.”

The one bright spot was their multi-day safari style tours to find better snow across the island.

“We had to go higher and go looking, there was still some great snow if you know where to look.”

Most of those locations Darren preferred to leave off the record, owning up only to Asahidake and Kurodake as being options.

Apart from powder chasing punters, Niseko Photography and Guiding attracts top end international corporate and industry clients to organise shoots, ranging from a 7 day expedition for the BMW ski team to plenty of big name snow industry brand pro-riders. Last time we got out with big Dazza a few seasons back we scooted over to Kiroro, where he was doing a backcountry shoot for Aussie freeride icon Anna Segal’s latest movie project.

They have recently added accommodation options around Niseko too, and are working on expanding their summer business.

“We don’t have many expectations for this season. We have heard stories from accommodation owners whose bookings are 80% down on last winter. We just want to do what we can this winter and work on getting some new places and content for the future.”

There are big domestic travel incentives from the Japanese government to stimulate the hard-hit tourism industry and Prefectures dependent on that. Key are vouchers giving clients 50% off packages and products.

“We looked into that, but as you might expect in Japan, the bureaucracy involved is pretty intense. I couldn’t see it worth our while for any potential benefit from it” Teasdale says.

Despite the ongoing bans leaving Australia, that at least proved relatively easy for them as business owners.

“We just had to fill out a bunch of paperwork. It all went through, and we got flights easy enough on ANA” he reports.

Both ANA and JAL are still flying several times a week from Sydney to Tokyo.

Every cloud deserves a silver lining. This season should be a return to normal ‘Siberian Express’ snow delivery, combined with the least crowded local powder for ages.

“This could be like the good old days the crew bang on about before Aussies got here in the 90s” we suggested.

“Yes, I think it’s going to be like the year after the tsunami” Darren agrees, “we got 20 metres of snow and I was resort powder skiing at 3pm in the afternoon!”

Another long term Niseko and Furano business owner David Harrison from Harro’s Snowsports at Lake Crakenback, Niseko and Furano, simply won’t be opening in Japan this season.

For the past 11 years Harro has done an amazing job of completely packing up his popular Lake Crackenback ski shop in just a week at the end of the Australian ski season. Everything is packed tight into a container ready to ship to Japan by mid-October.

His Niseko location is the smallest of the Aussie owned ski shops there, but no less popular for that – the level of personal service from Harro and his tight knit team keeps people coming back for more.

Despite COVID-19 dramas, Harro was still planning on business as close to normal as possible at their two Hokkaido shops.

“Then I got a call from the freight company, who said the container wasn’t even going to ship out of Sydney till mid-November due to the strike in the ports, which would be way too late for us to get set up there” Harro says. “And at the same time my partner couldn’t get her new UK passport in time, despite applying back in July. So I just pulled the plug on Japan this year.”

Fortunately his container had only got as far as Cooma. He had to buy another one (normally you effectively rent container for the duration of the shipping), and unpack and repack it into the new one for storage over summer. So remember that next season downunder and drop into Harro’s on your way to Thredbo or Perisher.

“At the end of the day with the costs of staff, staff accommodation, shipping, rent and everything else even in a normal season up there we don’t make a lot of money. By not opening this year I’ll likely lose a lot less than if we had opened. It’s pretty likely there will be some local restrictions there anyway, and with no international market we would be very quiet up there.”

Whole ski resorts, ski lodges, hotels, businesses and houses have been available at bargain prices across Japan’s mountain areas over the past 25 years. The chance to make a ‘ski-change’ and have your own snow business has proved attractive for lots of foreigners, especially Aussies. Government policies favour foreign investment by those who create or revive businesses, and generate employment, making it relatively easy to get visa and other required approvals.

One big reason so much cheap property is available in Japan are the relatively high property taxes. Anyone who inherits a property usually finds it difficult to pay them, so they try and sell it, or simply abandon the property. Which means if not utilising a business this winter foreign owners are still stuck with the taxes, a good incentive to go and generate some income from it if you possibly can.

One couple who did the big Japan ski change are Louise Wellington and Warrick O’Brien from Myoko Vista Lodge. They traded suburban lives and jobs in Wollongong for buying, refurbishing and growing their lodge business at Myoko’s Akakura village. Their first winter renovating turned out to be one of the snowiest ever, even for very snowy Myoko. They camped out amid metres of snow for a few months – see the full story on that here.

They have subsequently added a joint venture bar and cafe, Full Circle, and have a second lodge that would have been ready to offer this season.

Last winter went well, with only a few late March cancellations.

“I high tailed it out of there in March, I got back the day before mandatory quarantine came in” O’Brien reports.

This season Myoko Vista won’t open, since most of the clientele can’t get there. But after recent back surgery Environmental Scientist O’Brien is not able to work until next year at home in Australia, so he’s planning to head back up to look after the snow clearing as soon as feasible. That would be a $10,000 expense if he employed someone local to do it.

While resigned to losing this season, he’s looking forward to a big 2021-2022 with travel back on the menu. Meantime if you are around Myoko Full Circle will likely be open on weekends at least.

Peter Hillman from Action Snow Sports ran safari tours combining ski improvement with finding the best snow through Hokkaido and Honshu for several years (we met him a decade ago in Shiga Kogen which was very quiet then; he showed his local insider talents by persuading a bar to actually stay open for an hour in the evening for his clients and us), before being approached by Madarao to establish an International Snow Sports School there.

Since he has expanded with the popular Drop Off bar and restaurant, and accommodation.

For 2021 summer Plan A was to stay up in Japan and develop some summer hiking and biking programs for the international market, but enter coronavirus restrictions and that all went on the back burner.

“We had a pretty good season overall last year, the snow wasn’t too bad although there were less powder days than normal. But everyone was happy, I had 12 instructors busy most of the season” he reports. “Now I think it will just be me, and maybe one or two locals this winter for whatever business there is.”

At least he has no debt burden on the businesses, so can sit things out and plan for the expected rebound in 2021-2022. Neighbouring Tangram have invited him to set up there as well.

“It is what it is. A few of the locals were sitting around the other night at the bar and the consensus seems to be we’re going to be doing a lot of powder skiing at least.”

In Hakuba the popular Black Pine Lodge will be likely be closed this winter. Co-owner Gary Grant has other business and family commitments requiring him to return to Australia over winter. He can go for business purposes, but would be stuck in quarantine coming back if he did.

“But if things do open up I have a list of people wanting to come over, so we could open Black Pine in a low key way if that happens” he says optimistically.