OSAKA -- Panasonic will enter the lodging business, undertaking everything from design to construction and operation of guest apartments as it seeks to ride the home-share wave in Japan.
The Japanese conglomerate best know for home appliances sees demand for affordable lodging growing in the wake of a home-sharing law that took effect on June 15. Subsidiary Panasonic Homes will start by erecting about 10 buildings in the initial year in Tokyo and Osaka, expecting to generate 5 billion yen ($45.66 million) in sales.
The accommodations will feature Panasonic appliances, including their popular women's beauty products, allowing the rooms to act as showrooms for foreign visitors.
Though the building will be located in city centers, rooms will be priced at around 5,000 yen per person per night, which is cheaper than hotels. Each room will be about 40 sq. meters in size, capable of fitting four to five people.
Panasonic, through a group company, will borrow the buildings from landowners on 30-year leases. Panasonic will recoup construction costs from the property owners and get a roughly 10% cut of the lodging fees.
Panasonic will contract home-share websites Hyakusenrenma and Squeeze to operate the properties. The business will be conducted under a law that governs simple lodgings.
Panasonic has already has experience managing roughly 100 facilities such as nursing homes and now plans to bring that expertise to Japan's nascent home-sharing sector. Depending on demand, the units will be converted into conventional rental properties after a decade of use.
The Japanese government estimates the country will draw 60 million travelers in 2030, or more than double the number for 2017. If a portion of that multitude enjoys the Panasonic appliances during their stay in Japan, that could lead to improved sales internationally.
With non-real-estate companies like Panasonic and travel agency JTB entering the lodging business, the number of registered locations is projected to spike in the medium to long term.