Kansai is experiencing an unprecedented tourism boom.
Chairman of the Asia & Africa Committee Behzad Mirzaei led a Chamber mission to the Japanese region from 22 to 24 January so members could learn more about the growing investment opportunities.
During a packed itinerary, the delegation called on government officials in Osaka, Sakai, Nara and Wakayama to hear about the latest developments in these cities. They also visited a number of hotel sites and learned more about the investment requirements for such projects. Some of the local traditional industries were also introduced so that members could understand the history of the cities and also get an insight into the range of attractions for tourists.
Osaka: Green business hub
Osaka has benefited as tourists to Japan spread their wings beyond Tokyo. “The number of foreign visitors to Osaka has increased by seven times in six years,” said Susumu Saito, Director, International Division at the Osaka Chamber of Commerce. “From 158 million in 2011 to 1.1 billion in 2017.”
Opportunities are not restricted to the tourism sector. The Osaka government is currently developing the city’s Umekita district as a business hub, and is freeing up more land for developers to build grade A offices.
The Grand Front Osaka, which opened in 2013, is one of the flagship projects of the development. Located near the city’s central railway station, this mixed-use building includes a convention centre as well as offices, commercial facilities and apartments. Also located in Umekita is the Osaka Innovation Hub, which encourages intellectual and commercial exchanges between entrepreneurs and investors.
Phase 2 of the Umekita development, which is planned to create a hub for green innovation, is currently under way. The land is under bidding for development projects, and the winning bids will be announced in July 2018.
Sakai: An affordable option
The city of Sakai is less well known than neighbouring Osaka, but it has the benefit of being closer to Kansai International Airport. Another selling point is the cost of investing. Land prices in Sakai are around HK$12,000 per sq m, compared with around ten times that in Osaka.
The Sakai government is keen to develop the city’s hotel sector, and members visited a number of potential sites around Sakai Station and Izumigaoka Station.
The delegation also called on Sakai’s Deputy Mayor Emiko Hazama, who introduced one of the city’s chief tourist attractions. The Mozu-Furuichi Kofungun ancient tomb group has been nominated for the UNESCO World Heritage List. It includes the burial site of Emperor Nintoku, which is believed to have been built in the 5th century and is among the largest tombs in the world.
It is expected that Sakai will become a more popular tourist spot as the UNESCO nomination raises awareness.
The delegation then visited a traditional manufacturer of the famous Sakai knives. Renowned for their sharpness, these hallmarked knives are popular among professional Japanese chefs.
Nara: Enabling longer stays
Nara is best known for its deer that roam freely among the city’s parks and temples, but as a historical capital of the country it is also rich in heritage sites. The city is also enjoying a boom in visitor numbers.
“Compared to 2011, the number of foreign tourists has increased by 700%,” said Hiroyoshi Nakagawa, Director General, Industry and Employment Development Department of Nara Prefecture Government.
However, most foreign visitors treat Nara as a short stop-off, with less than 20% of them choosing to stay overnight. A major reason is the shortage of hotels, but the Nara government is addressing this issue with plans for more accommodation options. Among these, the Histerrace Nara is being developed in a former juvenile prison, while the more conventional JW Marriott Hotel Nara is expected to be completed by 2020.
In another move to encourage longer-stay visitors, the Nara government is implementing urban development projects such as building international-standard convention facilities.
Wakayama: Development potential
Wakayama is the smallest of the cities visited during the mission and members noted the appeal of its peaceful environment.
During the Welcoming Reception hosted by the Wakayama Government, Vice Governor Hiroshi Shimo encouraged members to invest not just in the hotel industry but also other sectors like food and beverage. Wakayama is rich in agricultural produce and members had the opportunity at the reception to meet potential suppliers of local specialties.
The delegation visited two of Wakayama’s key locations with potential for new hotels – the former Nanpuso building and the former Shi Wakaura Kanko Hotel. These two sites have existing accommodation facilities and excellent sea views, and offer potential for investors to reconstruct or renovate the buildings.
An eye-opening trip
The mission was organized after an Invest Japan Seminar at the Chamber last year, co-hosted by JETRO, introduced the potential of the region. At the conclusion of the mission, Mirzaei encouraged members of the delegation to keep in touch with the contacts they had made and to build cooperation between Hong Kong and Kansai.
“It was an eye-opening trip for me,” he said. “I really see lots of opportunities in the Kansai region, and not only in the hotel sector. With the growth in tourism, related sectors are also worthwhile for members to explore.”