Kyoto, JapanPhoto: Patrick Allan
It’s not a good time for Airbnb hosts or renters in Japan right now: The private residence renting service was recently forced to cancel thousands of already booked and paid reservations in Japan, all thanks to a new set of Japanese laws that went into effect on June 15. Here’s what’s going on over there, and what you can do if you were planning on renting with Airbnb in Japan in the near future.
The new Japanese regulations, or laws regarding minpaku (private lodging businesses), require hosts throughout the country to register for new licenses and follow new rules, which are directly affecting any reservations that were scheduled between June 15 and June 19. Basically, if you had a scheduled rental in Japan right now, you probably don’t anymore. According to Airbnb, the Japanese government was unwilling to grant private lodging businesses much of a grace period, even if they were in the process of registration for a new license:
“Unfortunately, the Japanese government issued a sudden announcement on June 1 instructing any host without a license number to cancel upcoming reservations that were booked before June 15 – even though many of these hosts are actively engaged in the registration process or awaiting their license.”
Not only were hosts and guests caught off guard, so was Airbnb. The company said that this surprise move was “contrary” to the guidance the Japanese Tourism Agency (JTA) had given them previously, and that the JTA was unwilling to negotiate.
In the last few days, thousands of travelers have been scrambling to find last-minute lodging for trips they’ve been planning for months, which is already difficult when you consider the traditional Japanese etiquette of booking stays far in advance. Fortunately, Airbnb is offering stranded travelers some vouchers for the full cost of their trip (and then some), 24/7 support, and other benefits for the inconvenience. They’re also able to get assistance from the Japan Travel Bureau to help find new accommodations.
But these new private lodging regulations are likely going to affect Airbnb well after the month of June. Japan’s Nikkei newspaper noted that Airbnb had around 62,000 listings in Japan at the beginning of the year, but now the number has plummeted to only 13,800—nearly an 80% decrease. Some of those listings will return as hosts complete their registration for new licenses, but many won’t. Hosts are concerned the new regulations will drive potential guests away, or make it too hard to make money.
One of the new laws, for example, says hosts can only rent out their private homes for 180 days out of the year. If a host had purchased a home specifically to rent out year-round, this law potentially cuts their yearly revenue in half, and certainly deters would-be renters from pursuing such a venture. Takuya Ichikawa, senior researcher of the Daiwa Institute of Research, tells Japan Times that the minpaku market is expected to shrink in the short term, and that nonprofessional renters are going to have to give up rentals—which defeats the purpose of a “sharing economy” business like Airbnb.
But all of this is for the best, says Nobuhiko Hohokabe, an official at the JTA. According to Hohokabe, setting steady rules like these will help expand a healthy minpaku business that ensures the safety and security of users. And more users are on their way. Visitors to Japan have been surging in numbers the last few years, and the JTA expect a whopping 40 million foreign visitors by 2020 when the Tokyo Olympics take place.
The current problems, as frustrating as they may be, are supposedly just growing pains. There may be 80% fewer rentals now, but that number will hopefully be closer to only 20 or 30% fewer over the next few months. This “adjustment period” is necessary for the long-term potential of the Japanese market, says Nathan Blecharczyk, Airbnb cofounder and CSO. He says the company has no plans of giving up on the country, especially with the upcoming Olympics:
“…there’s an expectation there’ll be an additional 12 million visitors. To accommodate all of those visitors, they simply won’t be able to build enough hotels. There’s going to need to be a diversity of options. Japan has 8 million vacant homes and that is a wasted asset, so we think there’s huge potential for those homes to be used productively to accommodate guests and also for local people to participate in this global tourism industry…”
So what’s a traveler to do? Is your future trip to Japan ruined? No way! First, expect finding an Airbnb in Japan to be difficult for the next year or so. It’s illegal for hosts to operate until they get registered and that will take some time. Even then, expect fewer listings overall since many homeowners will decide short-term rentals aren’t worth the hassle anymore.
That said, check out other affordable options for lodging, like capsule hotels, manga cafes, night buses, business hotels, and more. They give you a lot of bang for your buck and make a budget trip to Japan more than feasible. Who knows? You might even be able to afford a night or two at a traditional ryokan if you save enough.