ArrowArtboardCreated with Sketch.Title ChevronCrossEye IconFacebook IconIcon FacebookGoogle Plus IconLayer 1InstagramCreated with Sketch.Linkedin IconIcon LinkedinShapeCreated with Sketch.Icon Mail ContactPath LayerIcon MailMenu BurgerIcon Opinion QuotePositive ArrowIcon PrintRSS IconIcon SearchSite TitleTitle ChevronTwitter IconIcon TwitterYoutube Icon
Business

Airbnb executive 'puzzled' by Japan's demand to cancel bookings

Company unclear about responsibility to minimize disruptions to customers

Airbnb has pulled the listings of hosts who have yet to register under Japan's new law, and will cancel bookings of rooms without licenses after June 15.

TOKYO -- Home-sharing company Airbnb expressed discomfort over the Japanese government's request that the company cancel existing bookings for premises that have yet to be officially registered.

"We are puzzled and disagree with the decision of the Japanese government," said Chris Lehane, head of global policy and public affairs at the company, pointing out that the decision is inconsistent with Japan's goal to attract 60 million foreign tourists by 2030.

In an interview with the Nikkei Asian Review on Tuesday, Lehane spoke of his "concerns," and the "impacts on guests," but said the company will "do our best to support our guests."

"We found out only two weeks ago what the government's position would be, Lehane said. "We had believed existing reservations were allowed," even though some establishments had not been approved by the government.

Lehane did not say what responsibility the company had to minimize any disruptions to customers as a result of the new home-sharing law to take effect on June 15.

On June 1, the Japan Travel Agency demanded the cancellation of bookings of rooms at premises that had not been properly registered. Soon afterward, Airbnb pulled the listings of hosts who had yet to complete the registration process and acquire licenses under the new law. On June 7, it announced it would automatically cancel bookings of rooms without licenses after June 15.

Chris Lehane, head of Airbnb global policy and public affairs, said the company was surprised by the Japanese government's recent request to cancel reservations for unregistered premises.

Lehane insisted the company is "committed to a long-term relationship with the government and respects the decision," and said "we want to be a responsible actor."

The new law simply requires hosts to register their properties instead of obtaining permits with local authorities. Hosts can now only rent for up to 180 days per year, and must meet the rules of both the central government and local authorities. According to the JTA, only 724 hosts had completed the registration process as of May 11, the latest available figures.

Lehane declined to say whether the company could have been better prepared for any possible inconveniences to customers prior to government's rule changes, saying only: "We had a conversation for over a year with the government."

Lehane did not say how many reservations would be canceled. The company has created a 1.1 billion yen ($10 million) fund to compensate travelers for booking fees they might have already paid, along with flights. Lehane did not provide details on the number of guests who would receive compensation for travel disruptions.

"We wanted to identify a sufficient amount of resources to cover anyone who is potentially impacted," he said.

Lehane emphasized the company's strong position in the Japanese tourism industry. He said 54% of Australians coming to Japan used Airbnb, 46% of French, and nearly a third of U.K. and U.S. travelers. He stressed the company's economic contribution to Japan, saying Airbnb hosts bring in 65 billion yen per year.

"We believe that our platform and community are important" for Japan to reach its tourism goals, he said.

Lehane also outlined the company’s "Japan 2020 Plan" to increase the number of hosts in the country. He said the company will invest more than $30 million in the coming months, and will hold educational sessions in 60 cities to help potential hosts complete the registration process and understand the benefits.

The company will contact each host personally to support registration.It will also expand networks of related companies, such as cleaning and key-exchange services, to simplify preparation for home-sharing.

Airbnb is also interested in real estate partnerships, and in the possible revitalization of 8 million empty homes across the country.

Lehane identified two factors for the business's success in Japan -- the "network effect" of hosts and guests, and "the fact that we see hosts as community, not a commodity.” 

"The nature of our community will shape itself within the legal structure," he said, adding that the government "will continue to work with our platform."

 

You have {{numberReadArticles}} FREE ARTICLE{{numberReadArticles-plural}} left this month

Subscribe to get unlimited access to all articles.

Get unlimited access
NAR site on phone, device, tablet

{{sentenceStarter}} {{numberReadArticles}} free article{{numberReadArticles-plural}} this month

Stay ahead with our exclusives on Asia; the most dynamic market in the world.

Benefit from in-depth journalism from trusted experts within Asia itself.

Try 3 months for $9

Offer ends September 30th

Your trial period has expired

You need a subscription to...

See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

See all offers
NAR on print phone, device, and tablet media