TOKYO -- Short-term lodging services in Japan are promoting properties in the countryside, not just the big cities that dominated their listings before a new law regulated the industry in June.

The law triggered a serious bout of confusion in the market. U.S. player Airbnb was forced to pull thousands of listings that had not been properly registered, sending travelers scurrying to find alternatives.

The legislation has made vacation rentals less profitable in big cities, triggering a sharp decline in available properties to slightly over 10% of the volume before the law took effect. But service providers have noticed that tourists are increasingly interested in experiencing Japan's countryside, and are actively seeking new hosts off the beaten track.

Hyakusenrenma, a vacation rental startup in the northern city of Sendai, launched a flat-rate booking service on Sept. 14 called Stay Japan Pass. Travelers can select one-, two- or three-week passes for 39,000 yen, 78,000 yen or 117,000 yen ($350, $700 or $1,050), gaining unlimited access to approximately 100 properties across the country.

To help tourists customize their trips, Hyakusenrenma offers six "themes," including home stays, farm stays and hidden gems.

"As the new law shut out illegal home-sharing properties, which were essentially apartment hotels, it's now time to promote true home shares, where travelers are able to communicate with local communities," said Yasuhiro Kamiyama, the company's president. "The new service may cost a lot for us, but we consider it a marketing investment."

The plans, he said, would help tourists discover "regional treasures" nationwide.

The company said that even before the new law kicked in, it focused on properties legally registered under the existing hotel business law, along with special economic zones in places such as the western prefecture of Osaka. Hyakusenrenma lists 2,000 rooms on its website.

But rivals that had listed unregistered properties, such as Airbnb and HomeAway, are rushing to rebuild their databases.

Airbnb, which counted 62,000 listings this past spring, withdrew 80% of them due to the new law, though some have since been revived. HomeAway also pulled some of the 10,000 listings on its site.

Metro Engines, the developer of an IT-based accommodation assistance tool, put the number of active listings -- properties that accepted lodgers more than once a month -- at roughly 56,000 before the law. An estimated 70% were in Tokyo, Osaka and Kyoto, according to Mitsubishi UFJ Research and Consulting.

The Japan Tourism Agency, however, said it had approved only 7,028 accommodations by the end of August.

The new law allows owners to rent out rooms for no more than 180 days per year, and requires them to confirm the identities of their guests. Some municipalities impose further restrictions, including Shinjuku Ward in Tokyo, which allows home-sharing only on weekends. 

"Revenues of home-sharing hosts certainly decrease when they follow these rules," said Hirofumi Takeuchi, chief consultant at Mitsubishi UFJ Research and Consulting. Hosts who need to pay an agency to rent and manage their property face even smaller returns. 

Still, for rural property owners seeking to supplement their incomes, new opportunities are opening up.

Tourists from Taiwan get a taste of life on a Japanese farm with the property's owner. (Courtesy of Hyakusenrenma)

The Tourism Agency said the number of foreign lodgers in rural areas rose 16% last year, exceeding the growth rate for the metropolitan areas around Tokyo, Osaka and Nagoya by 6 percentage points. For the first time, the proportion of foreign guests in rural destinations exceeded 40%.

For would-be hosts, the process can be tricky. "The regulations are so complicated that some personnel at a municipality gave me the wrong guidance," said the owner of a temple in Mie Prefecture, south of Nagoya, who seeks to offer lodgings.

Even so, Takeuchi said that the growing number of repeat visitors to Japan are looking for different, more local experiences, and that the legalization of vacation rentals can help hosts boost incomes. "It is likely that home shares will spread widely through the countryside," he said.

American traveler Hans Greimel, 48, traveled with two friends to Ise-Shima in Mie. They stayed in a seven-bedroom house with other groups of tourists, just a short walk from a train station. "We enjoyed doing a barbecue of local lobsters in the garden," Greimel said, noting the lobsters had been delivered fresh from a nearby seafood shop. "It was an experience only available at a home share, not at a normal hotel."

Greimel made the booking through HomeAway. Junko Kasai, the company's head of marketing and public relations, said the "legalization of home sharing is making local governments in rural areas be more active."

HomeAway in June partnered with the Japan Kominka Association, a group that seeks to preserve traditional Japanese houses, to rent out such properties in rural areas. There are roughly 1.3 million traditional houses in Japan, most of which were built more than 50 years ago, but many are sitting empty.

Airbnb, meanwhile, at the end of August announced a partnership with the Beppu City Ryokan Hotel Association, an organization of traditional inns in the western prefecture of Oita, known for its hot springs.

Airbnb is starting to introduce Japanese inns in addition to homes, helping the hoteliers reach travelers from abroad and boosting its own listing count. The company plans to add 30 hotels in Beppu by the end of this year.