The riddle of the Japanese (ski) economy

[pie-eater 207]

I am carefully considering the situation and working on a solution, gg.

 

But remember...

 

[pie-eater 207]

Bloody hell, The Smiths at the Hacienda. Would have liked to have been there then.

[tripler 0]

Japanese public debt is now a world leading 225% of GDP and steadily rising. To put this in perspective Greece's ratio is 130%, and we know how much trouble they are in.

I suppose the difference is Japanese debt is owned by the Japanese public. So the government isn't at the mercy of the markets. It's not sustainable but it could take a very long time before they default, unlike Greece.

[ippy 66]

I always loved the drive up to myoko on the bus from the station. Not because it was scenic, but because the town of myoko is a hole and im contemplating just how much money im going to need to have saved in ten or so years so i can buy up one of those dilapidated looking places It was thus with a certain cynical joy my lodge owner told me that the people who run suginohara ikenotaira and akakan seem to be deliberately dragging their feet with investing in it since they want to offload it. Whether true, or scurrilous gossip, it all means the same thing to me: My rubbish alt wage might one day put me in a position (japanese wife who actually earns bank notwithstanding) to actually buy some property in myoko (since the place is evidently going to hell. 0_o???)

 

I remember 2009 being offered a job to liase with foreign punters and help them learn a bit about myoko purely on the basis that i was the only foreigner to buy a season pass that didnt already work there. It seems the tourist people caught a sniff of the money that hakuba was bringing in and wanted a piece of the international pie... but were given no real budget to do it. At least that was the cursory impression i got from one 30 minute conversation.

 

That being said, it did feel like there were more people on suginohara the day i rolled up there this year, but i attribute that to the fact they shut down one of the most important lifts thus piling everyone into the gondola and one side of the mountain.

 

Oh, and i aint no style fascist, but suginohara has teh ugliest base area i think ive ever seen. I remember the first day i arrived there and thinking "am i here? Surely this isnt it?" Its supposed to be the jewel in the myoko crown for goodness sake.

[Go Native 70]

I also think they are failing the domestic market. Again most resorts haven't changed a thing in at least 30 years. The whole snowsports market though, including the Japanese one, has changed dramatically. Snowboarding is now as or even more popular than skiing. Skiers themselves now ski on much fatter skis and in larger numbers than ever before like hitting up ungroomed or off-piste slopes. Very few Japanese resorts have changed anything to cater to these trends. I don't buy that the entire decline in the Japanese domestic snowsports market is only due to the economy or declining population. I believe that resorts just aren't catering well to what the market wants, especially those of newer generations who are so important for the long term viability of the industry.

Personally I think the best thing for the industry would be more foreign investment. More resorts brought up by foreign companies who are cashed up and able to make the investments that will bring the industry into the 21st century and cater to the modern snowsports market.

 

What might be some specific suggestions for things snow resorts can do to appeal more to the changing domestic market?

I gather opening up off-piste areas more would be one of them?

 

Managing the entire ski area rather than just the piste would certainly be a step in the right direction. This would mean managing avalanche risk as well. There's been some steps taken in Niseko along these lines and it has one of the more liberal off-piste policies in all of Japan. It's also managed it pretty well, backed up by the fact there has not been one avi death since the Niseko Rules were brought in. Any wonder it's popular with the OS crowd? One of the things that really annoys me is resorts like Rusutsu and Kiroro. Both strictly have no off-piste policies but both mostly just turn a blind eye to those that do. Thing is you have people with no experience at judging avalanche risk heading off-piste at these resorts all the time and you have people ducking ropes and getting themselves into difficult situations. It's the lack of management of the area that annoys me. At least at Niseko they have a pretty good system of gates to access potentially dangerous areas that can be closed during periods of high avalanche risk. The one thing that Japan offers in abundance is powder. Very few ski resorts in the world receive such consistent good quality powder as Japan. It's utterly ridiculous to have all this wonderful snow and just restrict people to skiing on the groomers. You can ski far better groomers all over the world if that's the sort of skiing you like.

I would also think developing good parks is essential for most successful ski areas these days. Not that many great parks to be found in Japan. It's not like every resort should build a world class park but every resort, epecially in a region like Hakuba with so many resorts close by to each other, should have something that sets it apart from the others. Many Japanese resorts are all a bit same same.

I think a lot could be done to improve most ski schools. They are still mostly teaching the same old stuff they were 30 years ago on the same old gear from 30 years ago. How many ski schools have instructors for off-piste or for parks? I know there was bugger all in Niseko until foreign companies set up shop there. Same with the range of equipment available at the rental outlets. Prior to the foreign rental operations in Niseko you'd have struggled to hire latest model fat skis or a decent range of snowboards.

And apres ski entertainment in Japan is simply pitiful. Sure there's not a big apres ski culture but it's something that can be marketed and promoted. It's another reason Niseko is so popular because at least they have a bit.

I don't know, you could go on and on. I really think resort management that really wants to make a go of it should go OS to some of the most successful resorts around the globe and see what they are doing. They should also seek to hire some foreigners with a track record of successful resort management elsewhere to bring in new ideas. Be worth every cent I reckon. Much of the industry currently seems at a complete loss in what to do. About the only thing they keep doing is offering ridiculously cheap packages which can increase numbers but at very slim margins for profitability. There's still plenty of Japanese people with money out there. You just have to offer a product they want to spend some of it on. The product out there currently may still appeal to those who were skiing in the 80's but it's not really working for the market today.

[RobBright 35]

And thumbs up for the Burger place, went there last season and it was bloody amazing!

 

It does surprise me that with the costs of train packages more people aren't taking advantage of the offers available to them. 8k for a day trip inc. train and lift passes just seems too cheap to me.

[Go Native 70]

That's the thing MIJ, I don't believe it's because of cost people are staying away. Japanese resorts on the whole are really cheap compared to most OS resorts. It's the product. In Australia lift tickets are around $100+ per day. Just to enter a resort usually has a fee of around $30 per car per day. Unlike in Japan nearly everything in resort is 3 times as expensive as you can get off the mountain. The accommodation is ridiculously expensive. The snow is often little more than what they've been able to make with machines. And yet the industry is doing pretty well. Even with such generally poor snow conditions they do well because they offer the right product. People will pay money and lots of it for the right product. Many Japanese resorts are missing the mark big time in my opinion.

[grazza 2]

All that is true, and much more. It's not as if the Japanese haven't got a history of innovation and excellence. Think Sony, Toyota, etc, etc. They showed the world how to do it for so long, until they got caught up in the asset bubble. I'd love to see some of the Japanese approach to quality and strategy that was so successful in the 70's and 80's applied to the snow. That could produce some great things.

[NoFakie 45]

On the subject of foreign ownership and what it might achieve, a number of Japan's golf courses are now under owned by o/s companies. I guess turning one of them around would be much easier than a ski resort, but it might be an indication of what foreign management can achieve.

 

Lots of foreign companies have come into Japan with a fanfare, lost a fortune, and then left with their tail between their legs saying Japanese people (yes those free spenders with the Louis Vuitton bags) are very choosy customers. The success stories, like Starbucks, seem to be more the exception than the rule.

[tripler 0]

In Australia lift tickets are around $100+ per day. Just to enter a resort usually has a fee of around $30 per car per day. Unlike in Japan nearly everything in resort is 3 times as expensive as you can get off the mountain. The accommodation is ridiculously expensive. The snow is often little more than what they've been able to make with machines. And yet the industry is doing pretty well. Even with such generally poor snow conditions they do well because they offer the right product. People will pay money and lots of it for the right product. Many Japanese resorts are missing the mark big time in my opinion.

I think success of the Australian ski industry is more down to supply and demand, plus a booming economy. Lots of people with lots of money want go skiing but there are only a few, small resorts. If demand outstrips supply, it's hard not to be successful.

 

In Japan during the bubble years people splashed out on skiing, love hotels and no pan shabu shabu. Now they're poorer they've cut back on all that, resulting in an oversupply of ski resorts. If half of them closed - and not just the small ones - I'm sure the ski industry would be much more profitable. I don't want mass closures to happen (though in any other country market forces would have made it happen) but I don't see how the industry can be profitable if it doesn't. For most individual resorts no promotions, upgrade of facilities or whatever, is going to make much difference while supply outstrips demand.

[grazza 2]

Out of interest, what was the Japanese ski industry like before the bubble? How many of the current resorts were in existence?

[SnowJapan 178]

grazza, we'll make more comment of it in a few weeks when we explain what we have been doing... but.... we have recently been going through all of our data, cleaning it up and have literally deleted about 80+ skijo from our database. Those being ones that have been dead or "closed for a while". We had a discussion about "closed resorts" a while back last season ---- we're right in the middle of some work intensive stuff right now, but I am sure once we have finished this piece of work we will make more comment about it. It certainly is very interesting.

[Go Native 70]

In Australia lift tickets are around $100+ per day. Just to enter a resort usually has a fee of around $30 per car per day. Unlike in Japan nearly everything in resort is 3 times as expensive as you can get off the mountain. The accommodation is ridiculously expensive. The snow is often little more than what they've been able to make with machines. And yet the industry is doing pretty well. Even with such generally poor snow conditions they do well because they offer the right product. People will pay money and lots of it for the right product. Many Japanese resorts are missing the mark big time in my opinion.

I think success of the Australian ski industry is more down to supply and demand, plus a booming economy. Lots of people with lots of money want go skiing but there are only a few, small resorts. If demand outstrips supply, it's hard not to be successful.

 

In Japan during the bubble years people splashed out on skiing, love hotels and no pan shabu shabu. Now they're poorer they've cut back on all that, resulting in an oversupply of ski resorts. If half of them closed - and not just the small ones - I'm sure the ski industry would be much more profitable. I don't want mass closures to happen (though in any other country market forces would have made it happen) but I don't see how the industry can be profitable if it doesn't. For most individual resorts no promotions, upgrade of facilities or whatever, is going to make much difference while supply outstrips demand.

 

There's still plenty of people in Japan with loads of money. With a population close to 6 times that of Australia there'd probably be more millionaires in Japan than the whole population of Australia. I just don't buy that it's the economy which is solely the reason for the continuing decline in the domestic market. The market has changed but the product has not. There's a whole new generation or two of skiers and snowboarders whose needs and wants aren't being fulfilled by what's on offer at most resorts in my opinion. It's like if Sony were still trying to sell the Walkman in todays market. Who would buy it?

[Slippery Jim 65]

They are, GN, and nobody is! . Sony stock has fallen about 90% from its 2000 peak.

 

I think there's a lot of demographics involved. The population is aging and that goes for snow sports as well, while the bloom is off the rose, so to speak, with skiing not longer seen as stylish, and boarding looked at as something for unruly teens.

[Metabo Oyaji 71]

I don't think there are enough millionaires in Japan to support the number of ski areas there are here, however much they upgrade their services. The vast majority of ski areas would have to go out of business for that to become a viable model. The future for now I think is in lowering the barriers to entry for ordinary middle-class folks in Japan, which means necessarily a relatively low-margin model. Which puts more emphasis on creativity rather than on monetary investments.

 

The prices in Australia sound ridiculous -- $100 for a lift ticket? $30 to park a car?? That's a pretty small market that can afford that, however attractive the parking lot may be (and it had better be gorgeous). Honestly, were I living in Australia, I probably never would have taken up skiing in the first place.

[muikabochi 208]

A small hill near Tokamachi tried some novel ideas a few yars back. What was it, free (or cheap) if you were gay and went on a Gay Day.... Free (or cheap) if you went in fancy dress. can't quit remember the details. Stuff like that. They got a fair amount of publicity out of it.

That skijo has since closed down.

 

I just feel there's a lot of apathy about getting out there. Though the sample around me are lots of locals for who generally skiing or boarding doesnt excite.

[xxx 2]

Why is that muikabochi, do you think?

[Tubby Beaver 209]

haha....i wonder how you proved you were gay??

 

There's a place in Gunma that does gaijin day....either free or cheap (I can't remember) if you are a gaijin

[xxx 2]

That was Norn Minakami I think.

 

[tripler 0]

A small hill near Tokamachi tried some novel ideas a few yars back. [...\ Gay Day

I don't know Tokamachi but I heard something about a Gay Day at a small Hakuba resort (I forget the name) a few years ago. I was surprised because I didn't think there was much of a gay scene in Japan, unlike the UK where everyone's a homosexual.

 

TB - i imagine you had to blow the lifties to prove your credentials. But of course as everyone knows, that's what you do anyway to keep your season ticket when snow patrol busts you in the pow. "Close your eyes and think of England..."

[Tubby Beaver 209]

A small hill near Tokamachi tried some novel ideas a few yars back. [...\ Gay Day

I don't know Tokamachi but I heard something about a Gay Day at a small Hakuba resort (I forget the name) a few years ago. I was surprised because I didn't think there was much of a gay scene in Japan, unlike the UK where everyone's a homosexual.

 

TB - i imagine you had to blow the lifties to prove your credentials. But of course as everyone knows, that's what you do anyway to keep your season ticket when snow patrol busts you in the pow. "Close your eyes and think of England..."

 

they best not tell me that....I'm likely to bite the bugger off!!

[SnowJapan#Andrew 6]

So much to say on this subject. Perhaps when things calm down here a bit I'll post more, but one thing that really amazes me every year is how some resorts still whip down there "winter season" websites when the ski resort closes and only get them back up there in November or even December. The reasoning behind it seems to be that they don't want 'old information' up there, but surely they could just put a note on their site to say that.

But taking all their information about their ski resort down from the web for 7+ months a year is just madness.

[Slippery Jim 65]

Indeed, SJ-A, that's very annoying.

[Tubby Beaver 209]

but its non-snow season, no one would want to find out information about possible destinations outside of the official season.....silly boys!

[SKI 15]

That is pretty numbskullish.

I remember a few years back that one resort put their skijo info website online in mid December... To coincide with the place opening!