July 8, 2008 - NISEKO, Hokkaido -- Playing golf on a clear summer day in the shadow of Mount Yotei, otherwise known as Ezofuji, or Hokkaido Fuji, may be an ideal way to spend a vacation. But simply walking around the premises of Hilton Niseko Village, which opened July 1 in Hokkaido's resort area of Niseko, seems just as nice.

It is a world away from the hustle and bustle of Tokyo, which is exactly what Hilton had in mind.

"Niseko is experiencing a growth in tourism with increasing visitor arrivals from Japanese cities as well as Australia, Asia and Europe," said Oded Lifschitz, Hilton's vice president of international operations for Japan, South Korea and Micronesia. "Hilton Niseko Village is a response to growing demand for deluxe hotels here."

Hilton Hotels Group has spent millions of dollars to renovate and rename Niseko Higashiyama Prince Hotel under the Hilton brand.

Niseko's real estate boom started around 2003 when owners of small businesses who came to Niseko to ski realized the area's potential as a global ski resort and ended up doing business here.

Now major companies like the Hilton group have joined those first small condo developers in building up a gigantic patch of real estate around the ski resort, which is known for its powder snow.

West Paces Hotel Group, founded by famed hotelier Horst Schulze, a former vice chairman of Ritz-Carlton Hotel Co., has plans to build luxury resort Capella Niseko on 32 acres at the foot of Mount Annupuri-Niseko.

The resort will have an 80-room hotel -- each with its own hot springs bath -- and 150 villas and condominiums.

Construction is scheduled to begin next spring for a scheduled opening by the end of 2010.

Meanwhile, Hong Kong-based telecommunications giant PCCW Ltd. acquired resort developer Nihon Harmony Resorts, which owns 180 acres in Niseko, including a ski resort, from an Australian venture company last year.

Locals are pleased with the development.

"We welcome the move," said Atsushi Kato, an official at Niseko's tourism association. "It will increase foreign tourists in Niseko and business in the region will prosper."

Growing numbers of foreign tourists are fueling the need for more hotels and condos.

In fiscal 2007, about 24,000 foreigners visited the town, up from some 14,000 in fiscal 2006. About 70 percent are from Australia, according to the adjacent town of Kutchan, which has jurisdiction over the Niseiko resort area.

Rising land prices indicate that Niseko continues to be attractive to foreign investors.

In the year to last July, the average price of land at Niseko jumped 37.5 percent, the sharpest increase among residential areas nationwide, according to the Land, Infrastructure, Transport and Tourism Ministry.

And town officials said that Niseko is likely to see a sharp increase this year as well.

But the rapid pace of development has caused problems at times.

Last year, Tokyo developer Zephyr Co. came up with a plan to build a condominium complex 43 meters high -- twice the height limit imposed by a nonbinding local guideline.

"This is causing a lot of friction in the community," said one local resident, who asked to remain anonymous.

The move prompted local residents to petition Kutchan to come up with a binding law to regulate development.

As a result, Hokkaido and the Kutchan town office enforced a law in the district in March that will limit the density, height and color of any complex constructed in the area, including Zephyr's.

Local businesses and residents are breathing a sigh of relief that Zephyr must come up with a new project in line with the new law.

"I think the new law is fantastic," said Simon Robinson, president of Hokkaido Tracks, a foreign pioneer in Niseko's development. "The biggest risk to this area is overdevelopment."

Robinson said any regulation and law to be introduced should be considered based on whether it will boost the flow of tourists in Niseko.

"The real money of Niseko is not about development. It's about tourism."

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