July 6, 2008 6:27 pm

Venue: Bubble-era hotel is fitting summit host

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Harried bureaucrats are fretting, media and non-governmental organisations are complaining bitterly, and smaller delegations are despairing about the daunting logistics of this year’s G8 summit in the far north island of Hokkaido.

But the Japanese government’s decision to host the gathering in what one commentator likened to “the set of a James Bond movie” reflects two main priorities: security and scenery.

The remote mountain lake area of Toyako, 150km from the main city of Sapporo, has plenty of both. It also boasts one of Japan’s most luxurious resort hotels, once known as the “Tower of Bubble” after the high-spending years of the bubble economy in which it was conceived.

Other candidate sites considered for this year’s summit included Kyoto, Osaka and the port city of Yokohama, near Tokyo. None presented the financial and logistical challenges of transporting leaders and their entourages to Lake Toya, 120km from an airport.

To further complicate matters, the construction of helipads at the hotel could prove futile if the area’s infamous summer fogs set in during the summit, and leaders will be forced to make the two-hour drive.

The winning factor for Hokkaido as the summit venue was the sprawling, five-star Windsor Hotel, high on a hill overlooking Lake Toya and Uchiura Bay.

With nearly 400 rooms, most boasting panoramic lake, sea and mountain views, the white, 11-storey trapezium shaped building could have been made for such an event – or, indeed, for a James Bond movie. The hotel has 12 restaurants, including a branch of the three-Michelin-starred restaurant Michel Bras, its own mini-shopping mall, a world-class golf course, a deluxe beauty spa and volcanic hot-spring baths.

Tomohiko Taniguchi, deputy press secretary at Japan’s foreign ministry, sees the Windsor as a “living epitome” of the country’s recent boom-bust economic history – and thus, he says, a highly appropriate venue for the summit.

The original project to build an exclusive, members-only resort was indeed a bubble-era fantasy. An ambitious contractor and a local bank teamed up in the late 1980s to build what opened in 1993 as the Apex Hotel.

By then, the economy had nose-dived after the bursting of Japan’s asset-inflated bubble economy, and the hotel rapidly went downhill, at one point renting rooms so cheaply that some budget-conscious guests were grilling fish caught from the lake in their rooms on makeshift barbecues. Room rates went as low as Y10,000 (about $95) – compared with the average rate now of Y130,000, and the top rate of Y1.3m ($12,300) for the presidential suite, according to Mr Taniguchi.

In a typical bubble-era tale, the bank backing the hotel – Hokkaido Takushoku – collapsed in 1997 and the hotel closed. For five years it stood empty, before being bought by a subsidiary of Secom, Japan’s largest security company, for about Y6bn, less than 10 per cent of its total development cost.

The hotel reopened as the Windsor in 2002, this time with fortunate timing. Overseas ski enthusiasts were discovering Hokkaido’s famous powder snow, tourists were flocking in and international direct flights to Chitose airport were being added.

The Windsor quickly drew affluent tourists from Japan and its neighbours, particularly China, Hong Kong and Singapore. While 60-70 per cent of customers still come from within Japan, the proportion of overseas guests is growing rapidly, says Mr Taniguchi.

While G8 leaders and their entourages will not have to leave the venue, the lack of other international hotels in the vicinity mean thousands of other participants, support staff and media will have to stay at resort towns up to two hours’ drive away.

For Hokkaido, one of Japan’s poorest regions, meanwhile, the main attraction of hosting the summit is the prospect of a big economic boost. The Hokkaido Economic Federation estimates that the G8 summit will generate economic benefits worth about Y38bn over the next five years.

But like the far southern region of Okinawa – host of the 2000 G8 summit – Hokkaido might experience a short-lived surge of summit-related economic activity which then tails off to a much slower pace of growth. Overall, tourism to Okinawa has climbed about 30 per cent since the summit, to nearly 6m travellers in 2007.

Hokkaido island in 2006 drew 49m tourists, about 600,000 of them non-Japanese. By 2010, it expects 65m visitors – with at least 1m non-Japanese.

Toyako itself – a scenic town of about 11,000 facing the bay to the south and Lake Toya to the east – is confident of a brief boom in tourism-related income. But other locals in Hokkaido complain that only the Windsor and a few other hotels will reap the benefit.

One niche sector is sure of a brief boom – grassroots services catering to groups of anti-G8 protesters and lobbyists who will gather in makeshift camp sites.

Two main campsites next to Toyako, Toyoura-cho, and Sobetsu-cho, are being advertised at the bargain price of Y2,000 for the whole period from July 6 to 9 (bring your own sleeping bag and tent).

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