June 8, 2018 / 3:36 AM / 5 months ago

Japan's home-sharing offerings evaporate ahead of new regulations

TOKYO (Reuters) - Japan, which just months ago had tens of thousands of Airbnb and home-sharing properties available, has approved only about 150 before a new law kicks in next week, meant to bring order to the market and create more lodging options for foreign tourists.

FILE PHOTO: A sign communicating the ban on using the apartment building as Airbnb service by the building management is attached to the building's front door in Tokyo, Japan March 12, 2018. REUTERS/Kim Kyung-Hoon/File Photo

The private temporary lodging, or “minpaku,” law, which comes into force on June 15, requires hosts to register with the government and imposes other rules and restrictions.

Market leader Airbnb Inc had 62,000 listings in Japan earlier this year, but as of May 11, the Japanese government had approved 152 of 724 applications for home-sharing, according to the Japan Tourism Agency.

On Friday, Airbnb said the Japanese government had ordered it on June 1 to cancel reservations made even before the law came into force. Airbnb had said in March it would remove listings without government approval by June 14.

“This announcement came as a surprise to us. It was contrary to the guidance our team had previously been given by the Japanese Tourism Agency and put the travel experiences of thousands of visitors to Japan at risk,” Airbnb said in a statement.

An official at the tourism agency said that the government had told organizations about the policy before June 1, and that the written announcement was in line with previous communications.

The new law limits home-sharing to 180 days a year, a cap hosts say makes it difficult to turn a profit, and leaves final decision-making up to local governments, some of which have imposed even stricter rules to protect security.

“We are on course to register tens of thousands of new listings in Japan in the months ahead,” said Jake Wilczynski, spokesman for Airbnb in Asia-Pacific. “There will be undoubtedly be a period of adjustment, but ultimately, clear rules and regulations for home sharing will make our community in Japan bigger and stronger.”

As foreign tourist numbers have risen, more Japanese have offered their apartments and homes for short-term rental. But that has generated neighborhood concerns about noise, safety and whether visitors can follow complex trash-sorting rules.

The new regulations were meant to bring transparency to a business that was until now rather murky, and technically allowed only in certain zones - although many hosts ignored such restrictions.

The government said it also wanted to offer more lodging options for tourists, with an eye toward next year’s Rugby World Cup and the 2020 Tokyo Olympics.

“We expect the number of applications will increase after the home sharing law is enacted,” said Soichi Taguchi, deputy director at Japan Tourism Agency.

Chuo ward, home of the popular Ginza shopping district, had no registrations. Another well-known part of Tokyo, Shinjuku, had three, according to the local governments.

Japan’s ancient capital of Kyoto had just three registrations out of 27 applications as of May 30, said Kazuhiro Shimokubo, a city official.

Most of the applicants had submitted incomplete forms, which needed to be fixed, Shimokubo said. Applicants must measure their properties properly and submit an English map to the host’s house so foreigners do not have to ask neighbors for directions, he said.

The government has given property owners another option: to provide lodging with a hotel license, which frees them from the 180-day limit.

In Kyoto, one of the most popular tourist destinations in the world, the number of hotel licenses had exploded in recent years, hitting 2,366 in April from about 700 in 2015.

But many local government officials do not expect a similar surge in the number of home-sharing licenses.

Kazumasa Takeuchi, head of the living hygiene section at Tokyo’s Chuo ward office, said he expected few applications because the ward banned weekday rentals.

“We set these rules as we considered the effect on residents’ lives,” he said.

Reporting by Junko Fujita; Editing by Malcolm Foster and Gerry Doyle

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