Crazy but apparently true, Prime Minister Abe is cracking down on Airbnb renters. According to the new guidline, called minpaku:
Airbnb hosts would only be allowed to rent to guests who stay for a week or longer, a minuscule slice of the market. The national guidelines only become law if local municipalities decide to ratify them, but that is beginning to happen.
Let’s break down how this will affect the Airbnb market in Japan. Firstly, those who do domestic travel rarely stay anywhere over seven days. The one time in the entire year that might be plausible is Golden Week. The rest of the year there are no federal holidays for an entire week. Most of the time, people who live in Japan (Japanese and ex-pats alike) can only afford to do weekend or three day weekend holidays so they don’t miss out on too much work.
Secondly, most of the tourists that come to the country are from other Asian nations. China, Thailand, the Philippines, all of these tourists come to Japan for weekend excursions. Chinese citizens especially love to shop in Japan, as the yuan is stronger than the yen at the moment, so it’s very affordable to come to Japan and go on shopping holidays. However, much like domestic tourism, these travelers only intend to stay for perhaps a weekend or a couple of days more. When the Chinese New Year rolls around, that’s when the majority of Chinese people might choose to stay for one week. After that, they won’t stay for very long.
And finally, all the other international tourists who come to Japan often decide to travel around and not stay in one central location. With the Shinkansen, it’s very easy to move from Tokyo to Kyoto to Hiroshima. Within a week, you could conveniently travel across the mainland, so most people would book neither a hotel nor an Airbnb rental for more than 4-5 days.
Airbnb is definitely going to lose capital, and possibly will need to leave Japan in the near future. Without the ability to keep the weekend tourists, there is simply no way for the company to make money all year round in order to keep up.
There is some hope in that each district is able to decide whether or not it wants to adopt the minpaku and reinforce the rule. Some districts might choose to keep Airbnb, say perhaps the more rural areas that don’t have any hotels to house tourists. At the moment it appears as if the big cities are quite ready to go forward with regulating the Airbnb rentals with Abe’s new guideline to back them up.
Ota, one of 23 districts within Tokyo, became the first municipality to fully adopt Abe’s proposal last week. Osaka, the country’s third-largest city, will begin implementing the laws in April. More authorities plan to follow, possibly including the Sumida district in Tokyo…
The big cities, of course, are thinking about the hotel industry, which pushed for the minpaku. No wanting the competition that Airbnb brought to the table, the hotel industry sought to make sure the home sharing rules were placed in their favor.
Japan Accommodation and Lodging Foundation lobbyist Taito Itoh said allowing more direct competition would be unfair to hotels, which unlike Airbnb operators have to comply with the lodging laws. Any hit to profitability would remove incentives for hotels to keep investing in properties, undermining Abe’s ultimate goal of creating a robust infrastructure to accommodate the tens of millions of tourists in the coming decades.
The argument is weak at best. Hostels and capsule hotels are everywhere in Japan, and those don’t seem to hurt the hotel industry (unless they’re all under the same umbrella of the industry, but I doubt it). Also, manga and gaming cafes exist in every corner of the big cities. Do those hurt the hotel industry? No, they don’t. Competition is always a growing factor in any industry, not a preventative from expansion.
Besides, hotel’s investing in properties should’ve happened when the bidding for the 2020 Olympics was won, not now with only 5 years away from the events. I’ll go ahead and claim that Tokyo won’t be ready for the huge swarms of people that will descend upon the land of the rising sun, and honestly Shinzo Abe may have just shot himself in the foot with this guideline. I will bet you that when the time comes and the Olympics are here and people are complaining about overbooked rooms, the Prime Minister in that time will curse Abe for taking away Airbnb.
What does this mean for people who already booked with Airbnb in Japan? I suggest you email your renter as soon as possible. You need to double check and make sure your reservation is still available, and if it’s not ask for a refund. If you’re denied a refund, go to the Airbnb website to file a complaint. Otherwise, unless you intend to stay for over a week at your destination in Japan, reserve at a hotel, hostel, or capsule hotel.
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