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The implications of Covid-19 for Niseko

March 25, 2020 0
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What does Coronavirus mean for Niseko ?

 

Nobody really knows where the Covid-19 pandemic is heading for Niseko. Let alone me.

A worldwide pandemic of this nature has not been seen since the Spanish flu of 1918 which was still holds the unbeaten record of killing the most humans in one sweep with 50 million lives being taken (1) . Thankfully Covid-19 is far more mild but still a serious concern.

But some of us here in Niseko do not have the luxury of throwing up are hands and saying “well we will just see what happens”

Businesses here must plan for the future and that means having some sort of model or thoughts ( even if they change quickly ) on how this will likely pan out.

I must also add the caveat that I am not suitably qualified to write on this topic and this is my non expert opinion. I’m just trying to get my head around it all like everybody else.

It’s entirely possible that by the you reading this some of the content may be out of date and superseded with better knowledge. However I do have some background in health research and in the absence of somebody more qualified (who I hope turns up soon ) perhaps this little article may at least get us asking the right questions.

It’s also been a very emotional journey for all of us Niseko locals.

If feels like our little hedonistic Niseko bubble where we could just hide from the cruel world, discover our inner child again, let out a yippee !! and slide down the pow then party after has been burst.

An entire seasonal staff crew was laid of early and there is now sadly some downsizing already of some valued year round staff identities as the Niseko comes to grips with a cessation of international tourism for the time being.

What was already a season of marginal snow quality ended sharply in a way we could never have imagined. Stories from our friends and family back around the world regarding job looses and economic hardships also weigh on our minds. And it’s only just began.

Getting to the meat and potatoes.

What is Covid-19 and what does it mean for Niseko ?

I think this question is best split into 2 parts

  1. The Health implications for the Niseko region and Japan in general
  2. The economic impact of Covid-19 on Niseko and it’s implications for next season

1. Covid-19 health implications on Niseko and Japan

coronavirus 2 (covid-19 ) was first identified in Wuhan in Dec 2019 spreading quickly through China resulting in the world health organisation declaring it a pandemic on the 30th of January 2020 (2)

But firstly what makes Covid-19 a nasty little critter are 3 things

  1. For most it’s just a nasty flue but In a very small minority of cases Covid-19 can result in a viral pneumonia which essentially means your drown in your own lung fluid if you can’t get access to an ventilator. Covid-19 is deadlier than the seasonal flu so forget those bloggers trying to play it down but It’s nowhere near as deadly as ebola and would not be usually such a big problem if was not for point 2. Which brings us to…….point 2
  2. Covid-19 is relatively easily transmittable. Epidemiologists have used the term R0 to describe how easily transmittable a virus is. It’s essentially how many people you are likely to affect once you have it. For covid-19 that number is estimated to be somewhere between 1.5 and 3.5 people depending on your source ( 3 )

So if you have Covid-19 it’s likely on average that you pass it to 1 to 3 of your friends. That’s actually not as high measles (12 to 18 people ) which is really contagious before vaccination started but it’s still pretty high (3).

And that brings us to the topic of exponential growth. There is an old myth that the inventor of the game of cheese requested his payment from the king be a single grain of rice placed on a chess board. So on sqaure one would be one single grain, sqaure 2 would contain 2 grains, square 4 would have four grain. By the end of the chesboard the king was unable to pay as the rice would cover the entire continent of India deeply and be greater than the worlds rice production by several thousands of times.

A great video about exponential growth and it’s implication for viruses can be found here

3. Last point 3. Covid-19 has another secret weapon compared to other viruses doing the rounds.

It has fairly short serial interval (4)  This is the time it takes for one person to start to get symptoms before the next person gets symptoms. Say you contracted Covid-19 on Sunday. By about friday you are developing symptoms. But you already gave it your friend Jake on Wednesday before you developed symptoms. Jake starts to feel crappy by the following Tuesday but has already passed it Sally on the weekend.

So the serial interval of Covid-19 is about 4 days.(4) from the time you got symptoms on Friday to the time that Jake got symptoms on Tuesday. The implications of the short serial interval is that means Covid-19 is sometimes transmitted by individuals that do not have symptoms at the time.

A recent study from the Diamond Princess that made the perfect controlled environment for study estimated that the asymptomatic transmission rate of Covid-19 is about 20% (6) so there is a 1/5 you will catch or give the virus to somebody else before either of you know it.

This has implications for Niseko employers and accommodation providers too. Screening for symptoms is still going to miss 20% of possible transmissions of your guests and staff. We still need to be cleaning like crazy to minimize transmission risk.

So now we have a virus that is relatively nasty particularly for elderly, is transmitted up to 3 people on average and is hard to detect because you get it from people that are not displaying symptoms yet. Oh goodie.

So where are we now  ? By the time you read this graph it will be well out of date but it does demonstrate just how quickly this have grown around the world since Dec 2019.

Source: https://www.worldometers.info/coronavirus/coronavirus-cases/

It’s also very interesting to see the different rates between vary countries. Researchers are scrambling to try and explain the differences and probably making some mistakes along the way but it’s going to a be complex interplay between geography, population density, climate,culture etc.

The good news that must viruses tend to mutate and burn out long before we are able to come up with vaccine. There is some pleasing news from China and South Korea that peak infection rates may have already occurred. The jury seems out on how long new hotspots will keep emerging there as public freedoms increase again.

So how does this effect Niseko and Japan ?

There is some good news here. Japan has not seen the crazy growth of Italy Iran or the US and in fact has not even seen the moderate growth of Australia. As of the 13th of March Japan has 1307 cases (7)

Source: https://www.statista.com/statistics/1096478/japan-confirmed-cases-of-coronavirus-by-state-of-health/?fbclid=IwAR2BF-BgCwjHPbjwmCt5XY6rcUgXX0VzLR3LBRC915g871906S3e6pIHr5A

For Hokkaido we seem to be steady over the last week or 2 as of the 26th of March at 163 cases but only 2nd to Tokyo as being the highest in Japan (7). Japan seems to be doing a pretty good job of ” flattening the curve” with the culture of cleanliness, social distancing and adhering to government advice far better than other countries.

Perhaps the culture of not shaking hands and not socializing as much has helped. As the husband of a Japanese wife I can tell you how hard it is to get somebody around for a dinner party !

It’s too early say for sure but It’s entirely possible and maybe even likely that Japan may be able to quell the rate and dodge an economic bullet that smashed europe and now the US.

Niseko has been all but shut down to international visitors and with domestic tourism not due to pick up until July anyway we have a nice little window of quiet and less humans moving through here so that should aid containment a lot.

Should Japan see an exponential rise in cases they are also better placed to handle it than many countries with a good track record of handling disasters and one of the highest rates of hospital beds of 13 per thousand in the western world (9)

Some bad news: Japan was slow to start test and still does not have a high testing rate. South Korea over the last month was testing at rate 10 times higher than Japan (10). Japan also has not taken the kind of action as Australia and New Zealand such as limiting public gatherings etc.

Tokyo’s population density is one of the highest in the world and I think those will be the figures to watch closely to see if Japan can bring this back under control.

Should Japan see a rapid rise it also has larger problem than many other counties. It has a very high percentage of elderly and high risk patients. over 28% of Japan’s population are over 65 and 14% are over 75 (11). Should Covid-19 take hold in japan the death rate would far higher than average than purely based on the age distribution.

Japan in my mind does not have the option of the ” herd immunity ” strategy that was briefly discussed by the UK and now seems to be considered by Trump as a possible strategy for the US.  They must stamp this out at any costs.

In Kutchan the main town services Niseko the number of people over 65 makes up 60% of our 15,000 odd population( 11)  and the effect of outbreak would be a little ugly.

Japan can’t afford to be complacent and although the rate is far lower than other countries cases are still growing daily and I think we can expect pretty draconian action from the government such as limited travel over prefecture borders etc should number of cases build over a few thousand in the next few weeks.

So in summary my current read on the health implications for Niseko is we have a good chance here in Hokkaido of bringing this under control by the end of summer (13) but if we see sharp rise in the mainland I think we should prepare for a similar journey that western countries are now starting to live through with tight restrictions on public gathering and hospitality to come under lockdown too.

So that concludes my thoughts on the health situation and risk but what about the econcomic impact to a small Ski town that depends greatly on international tourism ?

 

The economic effect of Covid-19 on Niseko

 

Without yet knowing how this is going to pan out in Japan and Hokkaido it’s really hard to say but I think we can start to draw some conclusions for the implications for next season.

I think it’s fair to say that distantly viewed in the scheme of human health threats Covid-19 is getting an unfair amount of coverage.

In 2018, there were an estimated 228 million cases of Malaria worldwide and the estimated number of malaria deaths stood at 405 000 in 2018 (15) but the economic hardships will be very real and very pressing and I think still not fully appreciated.

The UN is anticipating the effect of Coronavirus on the world economy of 1 Trillion dollars (18) with global production . I don’t even know how much a trillion is so I had to write it down.
1,000,000,000,000. You could give ( or perhaps more accurately take ! 1 million dollars from one million people !

I think the 3 key questions are

  1. Can people even get to Niseko ?
  2. Will they want to ?
  3. Can they afford too ?

Can our international guests even get to Niseko ?

1. Many international airlines will collapse. Qantas in Australia just laid off 20,000 flight staff and grounded it’s entire international fleet (12). The larger airlines are seeking government bailouts of up to 50 billion of taxpayers dollars and may likely get them but many smaller operators that our guests use for those affordable direct Niseko flights will sadly probably collapse.

Government travel bans on hotspots such as China and Italy seem likely for many months yet and as of the 26th of March about half of the international flights scheduled out of New chitose are cancelled and the recent boom of options for international flights into Niseko is going to be over for probably a few years.

It seems likely that travel bans will start to be lifted after Japan’s peak infection rate tipped to be around late April and last until August (13)  but the worldwide trend towards maintaining self isolation after international travel may be with us for 6 months or more so I think it’s likely that we can dismiss any chance of much summer international tourism in Niseko purely based on the physical logistics of getting here.

Winter should be possible if the rest of the world also peaks around May but again I think we need to see the removal of the 14  day self isolation rule that many countries have imposed for some time before we see chance of a viable winter season again. I can’t imagine punters wanting to sit around their hotel rooms for 14 days before they hit the pow.

By June we should see what the trend is here in regards to government policies on travel over our precious booking window but the chances of any bookings coming in early for next season seems greatly reduced. Needless to say heavy restrictions still in place by December on international travel would catastrophic for Niseko and it’s economy.

Do they want too ?

It’s no doubt the world has changed.

The effect of Covid-19 is probably the most significant event in consumer behavior since the great depression. I think we will see a lot less buying on credit for nice things like holidays and much less buying in advance and people may feel that travel now has risks in both personal and economic security that will be with us for some years yet.

Many consumers will have lost money on overseas holidays and will rightly be asking themselves ” What’s the real advantage of booking ahead at the moment ” and is travel going to increase my chances of acquiring an infection. You can bet our bastard insurances companies are busy changing policy wording to make getting healthcare from Covid-19 whilst traveling that little bit trickier too.

Given that most businesses are looking at reduced occupancy rates perhaps it worth reviewing cancellation policies to allow a full refund for anything but very last minute cancellation if there is any chance of getting forward bookings for the next season ?

It seems going to be a bumpy ride with a lot of uncertainty and last minute bookings and this is going to make planning for staff numbers very tricky indeed.

But let’s remember too. People have short memories and us humans are not very good at panicking for that long.

The pow in Niseko is not going anyway and many astute snow lovers may realise that next season may be a very good chance of seeing a significant improvement in the crowd factor that quickly chops up Strawberry fields !

Can they afford too ?

By now it’s becoming apparent just how bad the effects of some of the some of the government polices on controlling the outbreak have had on economies. Australia’s unemployment rate is forecast to go from 5 to 11% and the amount of disposable income is going to drop to a trickle (14). The effect of restaurant closures and the hospitality and tourism sector is going to be brutal.

There is also the effect of exchange rates to consider. In times of global uncertainty the Japanese Yen grows strongly in value and this will make the average ski holiday a few thousand dollars more expensive that it was last season. In March 2019 the rate was 80 yen per dollar but that has now dropped to around 60 and this may be a factor in the affordability of Niseko.

I think it’s fair to say for the average Aussie family that did the odd Niseko holiday that next season just got a little trickier.

But Niseko has been changing. The “average ” Australian ski family now makes up a smaller proportion of our international guests as interest from the top end of town from China and South East Asia and I  there will still be no shortage of demand from the wealthy for a trip to Niseko even in times of economic uncertainty and job losses.

Perhaps it’s also time Niseko concentrated on an unfairly neglected part of it’s success.

Japanese domestic tourism.

In all our interest to bath in our new found glory as the Swiss alps of Asia have we treated the Japanese tourist as well as we should have ? I remember one of my wife’s friends being upset that no staff in her hotel she checked into spoke the language that should be used here. Even now I still have not got around to making a Japanese version of my website.

Can we lift our game to cater better to the people that allowed Niseko to get established as the worlds best powder resort ?

Anyway more questions than answers perhaps on all of this and I would to wish everybody the best of luck in getting through this together and also remind you and me and that as long as the slopes stay steep, the powder stays deep and mount Yotei humbles us we will get though this.

Oh and Kutchan has it’s own toilet paper factory !

 

References

  1. https://en.wikipedia.org/wiki/Spanish_flu
  2. https://en.wikipedia.org/wiki/Coronavirus_disease_2019
  3. https://labblog.uofmhealth.org/rounds/how-scientists-quantify-intensity-of-an-outbreak-like-covid-19
  4. https://www.medicalnewstoday.com/articles/covid-19-study-estimates-rate-of-silent-transmission#Silent-transmission
  5. https://www.worldometers.info/coronavirus/coronavirus-cases/
  6. https://www.ncbi.nlm.nih.gov/pubmed/32183930
  7. https://www.worldometers.info/coronavirus/#countries
  8. https://www.nippon.com/en/japan-data/h00657/coronavirus-cases-in-japan-by-prefecture.html
  9. https://www.japantimes.co.jp/news/2020/03/20/national/coronavirus-explosion-expected-japan/#.XnvREYgzY2w
  10. https://japantoday.com/category/national/japan-testing-for-coronavirus-at-fraction-of-capacity
  11. http://www.stat.go.jp/english/data/jinsui/tsuki/index.html
  12. https://www.news.com.au/travel/travel-updates/health-safety/qantas-cancels-all-international-flights/news-story/14d299feb2609c9e13d45033a278f93d
  13. https://mainichi.jp/english/articles/20200306/p2a/00m/0na/029000c
  14. https://www.bloomberg.com/news/articles/2020-03-24/australia-unemployment-to-soar-to-11-1-by-june-westpac-s-evans

 


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