More Japanese Short-Term Rental Properties Expected Ahead of 2020 Olympics

Japanese Investment Properties

Japan Real Estate

10 Jun, 2019 –

Airbnb Inc. says it’s back in business in Japan, a year after stricter home-sharing regulations forced it to freeze a major portion of its listings in the country. There are 50,000 listings available in the country, with another 23,000 rooms in hotels and traditional inns known as ryokan, Airbnb said in a statement on Thursday. That compares with 60,000 total in June 2018, when the new home-sharing rules went into effect.

While Airbnb is no stranger to clashes with regulators, it had tried a more cooperative approach in Japan. But the government set a deadline for hosts to register and then in June 2018 forced those that were unregistered to cancel reservations two weeks ahead of that date. Listings plunged by almost 80 percent to just 13,800, the Nikkei newspaper reported at the time. Airbnb, privately valued at $31 billion, is preparing to go public as early as the end of this year or by 2020 at latest, and argues Japan is an example of how its business model can withstand even the most restrictive regimes.

“This shows that we can grow even in those environments,” Nathan Blecharczyk, Airbnb co-founder and chief strategy officer, said in an interview in Tokyo. “It’s important to have those rules in place long term, even if they are more restrictive.” Legalization has opened doors for some of Japan’s largest corporations to enter the home-sharing market. Local collaborators already include SoftBank Group Corp., convenience store operator FamilyMart UNY Holdings Co., electronics retailer Bic Camera Inc. and airline company ANA Holdings Inc.

The company on Thursday said partnerships in the market grew to more than 117 companies, including property developer Panasonic Homes Co. and real estate brokerage HouseDo Co. While the exact details of the agreements are yet to be decided, the companies may help supply a pipeline of properties for lease or purchase that are home-sharing friendly, said Yasuyuki Tanabe, Airbnb’s country manager for Japan. “The tide has changed,” said Tanabe. “And there are particular challenges in Japan. Everybody is saying we are going to live to 100, but we won’t have enough money to live to 100. There is going to be more interest for people to start hosting for extra cash.”

Airbnb is scrambling to shore up and expand its Japanese business as the summer Olympics approach next year. Prime Minister Shinzo Abe’s government is seeking to attract 40 million arrivals in 2020, the year Tokyo hosts the games. Such events traditionally bring more hosts into the market in anticipation of a demand spike, Blecharczyk said, citing 85,000 guests served by the platform during the 2016 Olympics in Rio de Janeiro.

Japan’s home-sharing rules limited private stays to 180 nights a year, but local authorities have raised the hurdles for hosts by piling on more restrictions. The Shinjuku ward of central Tokyo, for example, prohibited lodging in residential areas on weekdays, while Kyoto limited stays in such locations to about 60 days between January and March for hosts without a special license.

In the wake of the new rules, Airbnb poured $30 million into strategic initiatives in Japan, including a marketing campaign that included TV, print and social media ads to improve the image of home-sharing in the country. It also hasn’t given up on municipalities like Shinjuku. On Thursday, the company said it has an agreement with the ward to make sure hosts operating there abide by the rules and that guests and hosts are up to date on the local disaster preparedness measures.

Outside of Japan, Airbnb is still locked in a fight over regulation in New York, its biggest domestic market where a law from 2010 made it illegal to rent an entire apartment in a multi-unit building for less than 30 days without a tenant present. Making peace in New York is not a prerequisite for going public for the San Francisco-based company, Blecharczyk said, declining to give further details on the timing.

“Every jurisdiction eventually passes policies that legitimize home-sharing, of course, with all kinds of caveats and rules,” he said. “There are no more existential questions about Airbnb.”

(Source – “Bloomberg“, Pic – Apartment Share House / “JAPANKURU“)

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