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Business

China's Tujia takes off for Japan amid room-rental boom

Listing site sees opportunity in tourism upsurge, lodging shortage

A room in Kyoto for rent on Tujia.com

TOKYO -- Tujia.com is jumping into Japan's market for short-term rentals as legal hurdles fall by the wayside, courting swelling ranks of tourists amid a shortage of conventional lodging.

The Chinese short-term rental site operator has set up a Tokyo-based subsidiary, capitalized at 5 million yen ($44,500). A website for the Japanese market will be up shortly. The plan is to list 5,000 Japanese properties by 2020. Property owners will be charged service fees equivalent to 3% of the cost of a stay, compared with a steep 12% in China.

The Japanese unit will also serve as a customer support center, addressing communication issues between Tujia's user base, which is more than 90% Chinese, and property owners here.

Since its founding in 2011, Tujia has expanded to 355 Chinese cities and around 70 countries worldwide, including Thailand. At present, the company lists 450,000 rooms and properties for rent, doing most of its business through a dedicated smartphone app.

Japan, where overseas tourism hit a record 24 million in 2016, is the next logical market. This wave of visitors has led to a shortage of conventional lodging such as hotels, feeding a short-term rental boom. Airbnb of the U.S., the leading room-rental service globally, has around 50,000 listings in Japan.

The legal system has been slow to keep up with these developments. Except in special zones such as Tokyo's Ota Ward, no clear rules exist for property owners or rental services. The government in 2016 moved toward allowing short-term rentals in private homes to be treated as a type of informal lodging, but has given little detail on what that might mean. The risk of legal trouble has made new businesses reluctant to enter or expand in Japan: while Airbnb offers properties nationwide, Japanese startup Hyakusen Renma is sticking mainly to Ota and other safe zones, for example.

But that could change this year. New legislation expected to be submitted during the current Diet session would legalize private room rentals for up to 180 nights per year. Tujia plans to set up a property management subsidiary in Japan to take advantage of the new legal clarity. This unit would urge the owners of vacant apartments and Japan's estimated 8 million empty houses to list those properties as rentals, or even run these properties directly as full-fledged lodgings. The company already does this with condominiums in China.

Tujia has also teamed up with Loco Partners, the Tokyo-based operator of travel-booking site Relux. Beginning Wednesday, Tujia users can book rooms at the 700 high-end Japanese-style ryokan inns Loco works with -- an option aimed at wealthy travelers looking for the traditional Japanese experience.

The market for room rentals at all price points will likely continue to grow. Visitor arrivals in Japan have climbed for the past five years, spurred by growing budget airline service and looser visa rules. China is the most frequent country of origin, sending more than 6 million tourists each year.

(Nikkei)

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