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Visitor numbers to Hokkaido are soaring as more and more tourists are enticed by the region’s world-class skiing and beautiful scenery. Growing demand is creating business opportunities, and interest among Hong Kong investors was evidenced by a packed seminar at the Chamber on 15 January.

“This boom is creating huge investment opportunities for tourism-related sectors including resort development, hotel operation, transportation and retail,” said Chamber Chairman Stephen Ng as he introduced the seminar. The unspoilt environment has also given the region’s agriculture and food industry a good reputation, creating further scope for investors, he added.

Giving the keynote address, Harumi Takahashi, Governor of Hokkaido, pointed to the long history of cooperation between Hong Kong and the prefecture. 

“About 60 years ago, in 1956, the Hokkaido Government opened its first overseas office – a trade office in Hong Kong. So Hong Kong is the place where our economic exchanges with foreign companies first started.”

Tourism is the major sector and continues to grow rapidly. “The number of foreign visitors quadrupled in five years – in 2016 the number exceeded 2.3 million. Our target is to increase that further, to 5 million by 2020.” 

Hong Kong is also a major importer of food from Hokkaido, particularly seafood, she said. The area also exports confectionary and high-end furniture.

“As such, the economic exchanges between Hokkaido and Hong Kong have already reached maturity,”the Governor said. “And I believe we should go one step higher.”

To this end, she would like to see more investment from Hong Kong – particularly in the tourism and food sectors. 

In the past three years, Hong Kong accounted for 60% of foreign investment in Niseko, she said, adding that the Government wants to encourage investors to look beyond the ski resort to the rest of the region.

For the food industry, she pointed out that Hokkaido is rich in seasonal agricultural and marine products that are popular among Asian consumers. 

“This is where Hong Kong investors can take advantage. We want to promote made in Hokkaido products globally, combining the best ingredients from Hokkaido with the great know-how provided by Hong Kong,” Takahashi said.

Kuninori Matsuda, Ambassador and Consul General of Japan in Hong Kong, said that Hokkaido has been a favourite destination since he first visited 20 years ago – a sentiment that was echoed by several other speakers during the seminar. 

He pointed out that Hong Kong is hugely important to Japan as a major importer of Japanese food and as a source of tourists and investment. He revealed a newly released statistic from the Japanese Government: in 2017, 2.23 million Hong Kong passport holders visited Japan. And Hokkaido is not missing out on this boom – it is the third favourite destination in the country for Hong Kong tourists. 

Kaoru Shiraishi, Director General of JETRO Hokkaido, pointed out some of the attractions of the region, including the fact that it is very safe, has a stable government, and that natural disasters are rare events. 

“Of course, you must consider the cost when you invest, and you probably have the image that in Japan everything is expensive,” he said. But he pointed out that consumer prices in Japan are lower than in Korea or Singapore, and that costs in Hokkaido are far lower than in Tokyo or Osaka. 

The Hokkaido Government also offers preferential treatment to overseas companies, and Japan has introduced a type of green card so skilled personnel can work in the country. 

Shiraishi admitted that the language barrier is a stumbling block, but said attempts are being made to address the problem. 

“The Japanese Government is working really hard to lower this language barrier. In retailers and in restaurants it is getting easier.”

Three investors who are already active in the region also spoke at the seminar, giving their frank insights into the benefits and pitfalls.

Lady Ivy Wu said she is a long-term visitor to the region and that she jumped at the chance to invest in Hokkaido. Her Chalet Ivy hotel opened in 2012. 

“Since then I have had ample opportunity to experience first-hand the four distinct seasons in the prefecture, and the opportunities for a wide variety of outdoor activities – golf, cycling, hiking and fishing and, of course, skiing.” 

Bryan Tam, managing director of online agency Travel Alliance, also sang the praises of Hokkaido, including the food culture. The Hong Kong-based company has set up a branch office in Hokkaido so they can easily communicate with their tourism partners in the region. 

“The one very big challenge,” he said, “is that is very difficult to find talent. Not everyone can speak Japanese, Chinese and English, and this is our biggest problem, the human resources.”

This issue was also mentioned by Romy Sastranegara from Singaporean company Blue Wave, which has been investing in Japan since 2014. 

“It’s not only the managerial positions. We also need the waiters, the housekeepers,” he said. “It is very hard to find staff.” 

However, these hurdles have not stopped his company from investing, and Blue Wave has spotted a gap in the market. Sastranegara noted that the accommodation in Hokkaido tends to be tiny hotel rooms. 

“As Southeast Asian people we often travel with our families,” he said. “This is the very typical Chinese and Southeast Asian way to travel.” So Blue Wave is building small villas that can be rented by families. 

Sastranegara also hopes to attract more summer tourists and has built a large park and camping site in the village of Akaigawa.

Questions from the audience at the end of the seminar returned to the issue of staffing. Some members interested in the region have learned that many Japanese people in lower paid jobs do not want to work full time, as their income tax will greatly increase. This, along with restrictive visa requirements for lower skilled workers from overseas and Japan’s aging population mean that this human resources problem is not likely to be solved any time soon. 

So while there may be no slowdown in sight in the growth of tourism and the associated business opportunities in Hokkaido, investors may find that staffing their developments is a not such an easy task.