March 11, 2017 7:34 am JST

Japan takes step toward ending room-rental ban

Bill seen boosting nascent sharing economy

Travelers from Malaysia stay in a one-room condo in Tokyo's Ota Ward.

TOKYO -- The cabinet approved Friday a bill that would end Japan's ban on renting rooms in private homes to travelers, providing structure to a burgeoning industry.

The government aims to pass the measure, which includes some restrictions such as a 180-day cap, in this Diet session.

A Malaysian woman staying in a condominium in Tokyo's Ota Ward -- one of the few areas where short-term home rentals, known in Japan as minpaku, are permitted -- looked pleased with her accommodations. The space is affordable, lets her relax like she's at home, and comes equipped with a washing machine for laundry, she said.

The room is a licensed rental accommodation offered by Tomareru, a Tokyo-based minpaku operator that also provides a platform for rental listings. It generally costs 6,900 yen ($60.14) per night.

Minpaku guests can take advantage of a widening array of services. iVacation lends out smartphones that travelers staying at certain licensed lodgings in Ota Ward can use to discuss any concerns using the chat function. A British guest used the service to ask how to use the amenities in his room, letting him properly enjoy the Japanese-style tatami and futon.

Currently, a would-be minpaku operator needs either to register the property as a simple lodging under the Inns and Hotels Act or get a minpaku license in a strategic special zone such as Ota Ward or Osaka Prefecture. Minpaku usage has expanded under this system, helping to accommodate a surge in foreign visitors.

Nearly 20% of visitors arriving at Kansai International Airport stay in minpaku, data from the Osaka Convention & Tourism Bureau shows. Roughly 3.7 million foreign travelers used Airbnb, the world's largest home-sharing website, to book accommodations in Japan last year. Multiplying this by the average stay length of 3.8 days in 2015 gives a total of more than 10 million nights, compared with 70.88 million for all accommodations, according to Japan Tourism Agency data.

But the current system has strict requirements, and many minpaku operate without a license. A study by the Ministry of Health, Labor and Welfare found that just 16.5% of minpaku listed on home-sharing websites were licensed.

Unlicensed rooms can be quite profitable. A condominium in Osaka's Chuo Ward that costs 100,000 yen a month to rent can earn 350,000 yen a month as a rental lodging, even after cleaning and other expenses. Some rental properties are not properly taxed.

The new legislation aims to weed out problematic listings and rein in problems associated with minpaku. Many expect the measure to give the industry a boost by addressing local residents' concerns. But the bill falls short of full deregulation due to lobbying by the hotel industry, which fears losing customers.

(Nikkei)

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