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World Rugby says overseas fans will stay an average of 21 nights in Japan, boosting consumption in the country by 105.7 billion yen. (Photo by Ken Kobayashi)
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World Cup gives embattled Airbnb a second chance in Japan

Home-sharing and luxury hospitality hope to score ahead of 2020 Olympics

TOKYO -- More than 500,000 rugby fans are set to descend on Japan between September and November, as the World Cup kicks off, bringing a multibillion-dollar boost to tourism, but stretching the capacity of the country's service industry.

The surge in arrivals could provide international house-sharing platform Airbnb -- whose Japanese business has struggled with strict regulations -- with a new opportunity to crack the market.

As many as 1.8 million people will have tickets for the nearly sold-out tournament that the organizers say will inject 437.2 billion yen ($4.11 billion) into Japan's economy. World Rugby, the sport's global governing body, says overseas fans will stay an average of 21 nights, boosting consumption in the country by 105.7 billion yen. Package deals for the Japan-Russia opening match on Sept. 20, priced from 110,000 yen, have sold out.

Airbnb is hoping to pick up a piece of the action. The company took a hit last year when the Japanese government imposed a strict new set of rules, apparently aimed at protecting the country's hotel industry. The U.S. company has to push their hosts to go through laborious home-sharing registration processes and comply with operation limits of only 180 days a year, as well as geographical restrictions imposed by local authorities. As a result, it was once forced to remove nearly 80% of its listings.

For the World Cup, Airbnb has struck deals with five regions, including Kumamoto and Oita prefectures in the southwest and the northeastern city of Kamaishi, which will be hosting World Cup games, but which lack the hotel capacity to meet the spike in demand.

Co-founder and chief strategy officer Nathan Blecharczyk told the Nikkei Asian Review he hopes the tournament will be the trigger to increase the number of hosts.

"Events have always been the catalyst for our rapid growth, as will the Rugby World Cup," Blecharczyk said.

Airbnb forecasts that more than 300,000 foreign visitors will use home-sharing services during their stay for the rugby and expects a 30% increase in the number of travelers staying in Airbnb in these three cities, compared with the same period last year.

The World Cup is also creating opportunities for other segments of the tourism sector that have failed to gain a foothold in Japan. In the U.S. and Europe, luxury sports hospitality is a sizable business. Typically, companies buy packages, including prime viewing experiences, food and drink, and access to celebrities and players, which they then use to entertain clients.

"The sports hospitality business is basically nonexistent in Japan," said Kat Yamaguchi, Japan country manager at iLUKA, a sports marketing company. The reasons are principally cultural, he said. Sport in Japan is generally regarded as just a form of physical education, rather than as a commercial opportunity.

"In Japan, many presidents of companies also don't like to show off," Yamaguchi said. "Some of them would rather be seen in the employees' cafeteria than in fancy restaurants. Occasionally showing off is seen as conceitedness."

Yamaguchi's company is working with Sports Travel & Hospitality Group, a U.K.-based hospitality business that in 2017 set up a joint venture with Japan's largest tour operator, JTB, to sell luxury packages around the Rugby World Cup. The costliest offering -- top-category match tickets to all the matches in Yokohama, including the Nov. 2 final, with all the wining and dining trimmings -- comes at 1.99 million yen per person, excluding tax.

Both Airbnb, and companies like iLUKA, hope to use the World Cup to build a beachhead in Japan, one that they can expand again when the Olympics comes to Tokyo in 2020.

"There is huge potential in Japan ... a lot depends on how successful the business is for the Rugby World Cup and the Tokyo 2020 Olympics," Yamaguchi said.

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