TOKYO -- As the Japanese government seeks to open up more homes to paying customers looking for a place to lodge, the private sector is already busy carving out a place in the developing home-sharing economy.
Japan has led the world when it comes to innovative products, but the country has fallen behind dramatically in terms of soft sectors such as the sharing economy. Concerns are high that Japan will see its economic growth potential wane absent a rapid response to the changing landscape.
The hospitality industry has lobbied heavily against legislation opening the doors for private individuals to rent out homes or spare rooms, a practice known in Japan as minpaku.
But more people, especially the throngs of tourists coming to Japan, are opting for private residences in place of hotels. The number of foreign visitors to Japan utilizing the web portal managed by U.S.-based Airbnb jumped to roughly 3.7 million in 2016, about 2.7 times the number of the previous year.
"I believe it is essential for the new legislation to first pass as quickly as possible," Mika Yamamoto, the public policy manager for Airbnb in Japan, told reporters on Tuesday regarding the minpaku deregulation currently in the works. As of now, the only way to offer private-residence accommodations is by obtaining a permit under strict legal stipulations or by operating in one of Japan's special economic zones.
But because of the sheer number of people booking stays in private homes, it is suspected that many of these arrangements are occurring in legal gray areas.
Companies are taking the initiative to address the home-sharing demand before new laws are put on the books. On Tuesday, Airbnb said it plans to add a new function to its website that hides locations offering rentals for more than 180 days a year, the same limit the Japanese government is pushing forward. The number of days will be monitored by Airbnb's own automated system.
Airbnb also plans to collect accommodation taxes for local governments, as well as add functions to help homeowners fill out government applications to rent out lodging.
Not just Airbnb
Other companies are taking advantage of the opportunity. On Tuesday, rail operator Keio invited journalists to view the inside of the Kario Kamata, a condominium for lodgers that opens for business Wednesday. A two-room apartment comes equipped with a kitchen, refrigerator and washing machine among other furnishings. The building is in Tokyo's Ota Ward, one of the special zones designated by the government. Keio is the first railroad company to own and operate minpaku-style accommodations.
Keio plans to accumulate expertise in owning and running such facilities though this operation. And the number of vacant houses along its rail lines is growing. "We wish to revitalize areas along the lines by utilizing [those houses] as minpaku properties," said a Keio official in charge of strategy in the business creation department.
Tujia, China's answer to Airbnb, is setting up a building management firm in Japan this March. The arm will recruit owners of condos and vacant homes who will turn the buildings into minpaku establishments, or it will acquire properties outright and operate the locations as lodging facilities. Tujia plans to establish customer support services in April as it prepares for the passage of new minpaku rules.