Nagano’s ski resort divide

While Nagano’s urban areas are seeing a slowing in the rate of decline in land prices, one district in the prefecture is seeing no end to eroding land values.

The Hirao district in Yamanouchi Town, known for being home to the Jigokudani Monkey Park and several ski areas, is also home to the steepest drop in both commercial and residential land values in the prefecture.  According to the Standard Land Prices issued by the Ministry of Land, Infrastructure, Transport and Tourism, the rate of decline at several survey locations in Hirao worsened in 2018. Land values dropped by between 2 ~ 4% in 2018. In some locations land prices have declined year-on-year since the late 1990s. 

Despite being 1.5 hours by car from Hakuba, a popular ski town, and 45 minutes by car from Nozawa Onsen Village, the difference in the local real estate markets is widening. Several years ago Nozawa Onsen was ranked as the worst district in the prefecture for land price declines. In 2018 residential land values dropped by an average of 0.6%, a marked improvement from the 8 ~ 10% declines seen in the early 2000s and 2010s. Land prices in Hakuba dropped by only 0.5% in 2018, another improvement from the previous year.

The distinct difference between these ski resort towns is foreign investment, or the lack thereof in the case of Yamanouchi. Both Hakuba and Nozawa Onsen have been popular in recent years with foreigners buying land to build both private homes and accommodation facilities.

As many as 93% of the ryokans and hotels in Yamanouchi are estimated by town officials to be operating at a loss, with average operating ratios of around 24%. In 2016, Nagano Prefecture had the highest number of ryokan and hotel bankruptcies in the country. The prefecture was also in top spot in 2011 and 2012.

Recent bankruptcies:

  • Hotel Nishimasa filed for bankruptcy with debts of 71 million Yen in April 2018. The 6-storey hotel opened in 1980. Annual revenues peaked at 86 million Yen in 1997, but a continual decline in ski visitors saw a drop in hotel guests. Annual revenues in 2016 had dropped to 25 million Yen. The land and building was sold in January 2018 to another company.
  • The former operator of the Shiga Kogen Hotel, now closed, filed for bankruptcy in January 2018. The 40-room hotel is located in the Shiga Koen ski area and relied on group tours. Low numbers of ski tourists resulted in low operating ratios, while previous investments in hotel equipment put a strain on profitability.

The Nikkei Shimbun, September 19, 2018.
Tokyo Shoko Research.
Yamanouchi Town Homepage.

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