According to a 2024 report by C9 Hotelworks, there are currently 22 hotel, residential, and mixed-use development projects underway in the Niseko resort area. Upon completion, these developments are expected to add 2,284 new rooms or units to the market.

One key factor driving such large-scale development is Niseko’s growing reputation as a world-class winter destination. Moreover, the area is increasingly popular during the green season, offering various outdoor activities and making Niseko an all-year-round resort hub with the potential for steady visitor numbers throughout the year.

However, it’s not all smooth sailing. Rising construction costs and labor shortages pose significant challenges to these development plans.

Rising Construction Costs

The prices of construction materials have seen substantial increases:

• Raw materials such as cement, concrete, and lumber have experienced price hikes ranging from 25% to 38%.

These factors have pushed the anticipated completion of some hotel developments beyond 2029.

Labor Shortages

A shortage of skilled labor within the tourism sector is leading to project delays and increased costs.

Shifts in Development Strategies

In response to these challenges, many developers are adjusting their business models:

• There is a noticeable shift towards offering luxury land plots and custom-designed homes.

Increase in Land Values

Land values in Niseko have risen sharply:

• The Hanazono area has seen a 19.5% increase in land prices.

Expansion of the Tourism Market

Additional demand from Southeast Asia is anticipated:

• Japan Airlines (JAL) and All Nippon Airways (ANA) plan to expand codeshare flights to high-demand markets in Indonesia, the Philippines, and Vietnam in 2025.

• New Chitose International Airport is introducing new routes by Singapore Airlines, Thai VietJet Air, and Aero K, enhancing connectivity.

Conclusion

Real estate development in Niseko is on the rise, yet it faces challenges such as higher construction costs and workforce shortages.