Case Study: Nihon Harmony Resorts

Australian companies dealing with Japanese markets

contributed by JETRO Japan

SUN, sand and surf feature in any iconic image of Australians at play. Yet Australians are avid year-round sportspeople, with winter sports high on their list of leisure activities. But with the world's great ski areas so far from home, only the most dedicated Australian skier or snowboarder would hit the slopes of the European Alps or North America's Rocky Mountains.

This tyranny of distance is now being challenged by Japanese destinations like Nihon Harmony Resorts. Through the heat of the Australian summer, this booming resort on Japan's northern island of Hokkaido boasts some of the world's finest powder snow.

Nihon Harmony's executive chairman Roger Donazzan first heard about Japan's skiing opportunities in 2003. Colin Hackworth, now Nihon's managing director, told him about the Hokkaido experience: surprisingly inexpensive skiing just 10 hours from Australia, compared to more than 20 hours to access pricey Canadian resorts. When Hackworth described how Australians were just starting to discover Hokkaido, Donazzan asked: "Is there anything for sale?''

The pair began examining investment opportunities in Japan and soon focused on Hanazono, an area in the Niseko complex of ski resorts. "We began working on the project before I'd actually seen the property,'' Donazzan recalls. The Australians engaged the help of the Japan External Trade Organization (JETRO) in Melbourne. Introductions from JETRO opened up talks with the Tokyu Land Corporation, which owned the Hanazono property the pair were interested in. "We were looking for someone who could help us through the negotiations and who could aid us in our discussions with Tokyu.''

Niseko's abundant snow first attracted the investors but they soon realised their timing, too, was good. Donazzan says the assets had great value and "the opportunity was obvious''. By late 2004, the Australian team had bought Nihon Harmony Resorts.
There has since been a rapid rise in the number of Australian visitors, helped by a multilingual website and guidebook to Niseko. Even signs are posted in English and Japanese, adding to the resort's appeal to Australians and Western expatriates visiting from throughout Asia. "In the last year in particular, we saw lots of families,'' Donazzan says. "Aggressive skiers go all over the world; now we're reaching a deeper, broader market of people who stay much longer.''

Donazzan stresses that Nihon Harmony, while an internationally friendly resort, is Japanese at heart. "It's very important to us that this remain a Japanese destination,'' he says. Some 80 per cent of visitors are domestic tourists, making Japanese skiers and snowboarders a key market for the company's publicity efforts. Donazzan says Nihon Harmony has also fostered close, co-operative ties with neighbouring companies in the Niseko network. "We spoke to the locals and told them, 'Our competitors aren't here, they're in Europe, North America and the rest of Japan'.''

Nihon Harmony Resorts' operations include the ski area and its system of lifts, ski schools, equipment rental and retail sales. Development plans include luxury residences, holiday accommodation and a full range of restaurants and shops. The firm will also bolster its year-round offering, including tennis, golf and a network of nature trails. The company aim is to make Niseko a premier international vacation destination.

Japanese operation
Established: 2004
Capital: $8 million
Employees:
50 plus (including part-time ski instructors and support staff during winter)
Business:
Development, operation and management of ski and golf course resort villages
Location: 167-48 Aza Yamada, Kutchan-cho, Abuta-gun, Hokkaido
URL: http://www.harmonyresorts.com
Parent company: Harmony Resorts Niseko Pty Ltd (Melbourne, Australia; five employees)