Toyako businesses seek long-term benefit

TOYAKO, Hokkaido — Takuji Okamoto, 69, has run a tiny noodle shop with his wife, Chieko, for 23 years at the Lake Toya hot springs resort area.

Waiting for customers: Business is slow at a motorboat rental shop on Lake Toya on Sunday. SHINICHI TERADA

Since April, his business has been thriving. Customers ranging from government officials who laid the groundwork for the Group of Eight summit, which opened Monday at Toyako, to members of the press and police officers beefing up security for the event have been flooding the 14-seat shop during lunchtime and at night.

The summit-related boom has brought a new breed of customers.

"After a Frenchman ate noodles, he asked for a dessert menu. Noodle shops like ours don't have desserts. That's very French," Chieko, 63, said with a laugh. "Thanks to them, sales are up. But more than that, I'm very happy to see all kinds of people. Without the summit here, I would not have seen them."

Okamoto, who took over the noodle shop from his parents, said, "I think sales were up at least 20 percent in June compared with the same time last year."

The Okamotos are among local businesses that have benefited from the G8 summit, which has brought construction workers and police from all over Japan, as well as journalists and government delegates from overseas.

Central government and local officials have tried to use the summit to showcase Hokkaido as an attractive tourist destination rich in scenic areas, hoping more visitors will boost the region's ailing economy.

However, businesses and officials in Hokkaido say that while the summit may have publicized Toyako's name, the benefits could be short-lived.

Noboribetsu, a well-known hot springs resort close to the summit venue, organized a welcome event last Friday — U.S. Independence Day — for the American delegation staying in the city, with a performance by a local elementary school marching band and traditional performing arts.

"Our city is well-known in Asia, but few people in the United States have heard of Noboribetsu," said Shinobu Ishiyama of the municipal government's tourism division. "The U.S. is a big market. This (G8 meeting) is a precious and rare opportunity to raise our city's profile."

Of the roughly 1.3 million people who come to stay in Noboribetsu each year, 200,000 are non-Japanese tourists, according to Ishiyama. "We already rely on tourists from abroad," he said.

But he is doubtful of what is being touted as the "after the summit" effect on tourism.

"People say 'after the summit,' but who remembers the previous G8 host city in Germany? It will be difficult to keep people's interests high on the Lake Toya area after the summit is over."

Ramen cook Okamoto said an increase in the number of foreign visitors alone does not help local tourism.

"Local hotels here offer discounts to fill up their rooms, and the number of tourists from abroad has increased. But many of them spend less money here, and just buy beer and food from the convenience stores to take back to their hotel rooms, leaving the hotel employees to separate the trash," he said.

Many experts say Hokkaido has no choice but to depend on increased tourism to revitalize its stagnant economy, which has long relied on public works spending. Its agricultural sector could be hurt further if farm liberalization continues.

Maintaining the momentum won't be easy. Interest in the Shiretoko Peninsula, for example, temporarily increased when it was designated as a UNESCO World Heritage site in 2005, but the boom now appears to have subsided, said Shuzo Ishimori, director of the Center for Advanced Tourism Studies at Hokkaido University.

Using their noodles: Takuji and Chieko Okamoto pose in front of their ramen shop in Lake Toya, Hokkaido, this week. SHINICHI TERADA

A big banner saying "Let's make the 2008 Hokkaido Toyako summit a success" hangs above a street in the Lake Toya spa town to welcome the world leaders, but the street itself was nearly deserted Sunday except for the heavy police security.

Uniformed officers patrolled the area and checked parked vehicles, while divers checked the lake for suspicious objects. Journalists were meanwhile searching for local residents and shop owners who would comment on the summit's impact on the town.

Mitsuo Hatakeyama, 70, who runs a motorboat rental shop, sighed.

"There are only police officers in the town. No tourists are coming and that has left my business high and dry," Hatakeyama said as he sat on one of the benches normally reserved for customers. "Usually, we see hundreds of customers coming. Lake Toya may have become known to people all over the world, but there is no customer here."

Some hotels are relieved that they managed to secure enough guests, but many are pessimistic of postsummit business prospects, as rising food and fuel prices dampen consumerism.

Masashi Watanabe of Toya Sansui Hotel Kafu said the occupancy rate at his inn was close to 100 percent during the April-June period, with construction workers mobilized to repair roads in the area, as well as government officials and journalists.

After the summit, however, the figure is expected to fall to one-third or one-fourth, he said. "Even discounts don't work. It's a very severe situation," he lamented.

Toru Fujie of Noboribetsu Grand Hotel, which is hosting the U.S. delegation during the summit, also said business will slow after the summit.

"Reservations for rooms after the summit are slower than we expected," he said. "I think that after the summit, people in Japan will turn to watching the Beijing Olympics on their flat-screen televisions at home. Also, higher gasoline prices and a worsening economic outlook are dampening their travel demand."

Ishimori of Hokkaido University said Hokkaido's inns should adopt an upscale strategy and start to lure not just affluent Japanese but high-end consumers from around Asia, given the falling number of group tours to the prefecture.

He said people are ready to pay if hotels offer good services and suggested inns cater to individual traveler needs, including optional tours such as hot-air balloon rides, rafting and other outdoor activities taking advantage of Hokkaido's rich nature.

"Some hotels are offering discount prices in a bid to fill their rooms, but that does not produce profits. If they cannot hire new employees, the services could worsen, making it hard to woo repeat customers," Ishimori said. They should instead focus on visitors from Asia and Russia, where the rising purchasing power on the back of brisk economic growth may yield new repeat customers for Hokkaido, he said.