Under a new law in Japan, property owners will be able to rent out their homes to tourists beginning in June of this year. The move is expected to kick-start the “minpaku” (private residences rented out by owners) business ahead of the 2020 Tokyo Olympics and Paralympics.
The adjustments will help cope with the high volume of foreign visitors and shortage of accommodations. Before the new law, accommodation in private homes was allowed in Japan, but providers needed a license required by the Hotel Business Law. Starting in June, restrictions will loosen.
Owners of private residences can submit their registration online through the central government site, where they must also submit the necessary paperwork to local governments or designated major cities.
Private residence rentals are subject to restrictions, including a maximum rental time of 180 days a year, keeping a registry of rental guests, maintaining hygienic conditions and responding to complaints from neighbors.
Local governments in response passed further restrictions. In Kyoto, the city passed an ordinance in February limiting minpaku rentals in residential areas Jan. 15–March 15. The city of Kurashiki in the western Japan prefecture of Okayama entirely banned the minpaku business in the city’s historic quarter, popular among tourists.
Despite some reluctance from local governments to allow minpaku rentals, hotel and rental brands have eyed new opportunities in the emerging market. U.S. online home-rental service Airbnb Inc. partnered with Recruit Holdings Co. in an attempt to secure a large amount of houses and apartments from the minpaku business ahead of the 2020 Olympic surge.
Seven-Eleven Japan Co. also plans to enter the minpaku business in a partnership with JTP to enable tourists to receive and return room keys at its convenience stores.
Japan saw a surge of inbound tourists with the number hitting a record of more than 28 million in 2017, and the government setting a goal of 40 million in 2020. Minpaku rentals can expect to see a healthy increase in business with the upcoming tourism spikes and deregulation measures.
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