New Japanese Law Asks More of Private Lodgings Industry

Japan’s new law governing private residences rented to short-term lodgers, a practice known as minpaku, came into effect on June 15, 2018. The legislation aims to ensure the safety of guests and prevent unpleasant incidents from arising. Only residences that meet set standards and submit documentation will be authorized to accept travelers under the law. At the same time, there are still unlicensed minpaku facilities in operation. In this article, I introduce how the new legislation protects guests and consider the risks of staying in unlicensed private lodgings.

More Than 10% of Foreign Tourists Choose Private Lodgings

While minpaku, which covers all forms of private rental accommodation, has long been a common practice in Japan, the boom in broker sites like Airbnb has led to a rapid rise in online bookings over the past few years. A survey by the Japan Tourism Agency found that more than 10% of international visitors from January to March 2018 stayed in minpaku.

One of the appeals of private accommodation for foreign tourists is the chance to participate in everyday Japanese life and interact with locals. Many overseas visitors are drawn by the number of listings able to take in large family groups. The efforts of individual registered hosts in welcoming guests has grown into a movement that is allowing visitors to experience Japanese culture in new ways while giving a fillip to regional tourism.

Private lodgings also fill the accommodation gap as tourist numbers continue to rise. With interest growing in the sharing economy, hosts see the opportunity to use their residences to earn a living.

It can also be fun for property owners to run a minpaku business. Although there are many tasks, like maintaining the cleanliness of rentals, handling bookings, and giving directions, many hosts take pleasure in providing hospitality and meeting their foreign visitors. Positive word of mouth has also fueled the trend, increasing host numbers.

Ensuring Guest Safety

Amid the boom in private lodgings, legislators in 2016 began discussing ways to regulate minpaku. Japanese hotels, ryokan inns, guesthouses, and other standard forms of accommodation are covered by the Inns and Hotels Act, but there was no equivalent for private lodgings. To remedy the situation the government drafted the Private Lodging Business Act, taking into account the diversification of needs and options in this area. The Diet passed the bill in June 2017, and the law came into effect in June 2018.

The new law clearly lays out regulations and duties for individuals and corporations running minpaku businesses and for local and national authorities. The general provisions of the bill provide for the safety of guests by ensuring businesses are run appropriately, while at the same time encouraging tourism.

Rules for Businesses

The law divides minpaku businesses into three categories: hosts, managers, and brokers. Hosts may be individuals or corporations that directly care for the needs of guests, while managers handle the administration of properties. Brokers include US sites like Airbnb and HomeAway and Japanese companies like Rakuten Lifull Stay and Hyakusen Renma. The law stipulates how to register a private lodging as well as the duties, rules, and penalties for each kind of business.

Hosts are required to notify the governor or mayor if they wish to run a business, providing such details as the name of the individual or corporation and the address and floor plans of the property. In addition, they may only provide accommodation for a maximum of 180 days each year.

A host’s duties include maintaining a hygienic environment at a rental by cleaning and limiting guest numbers and ensuring safety by installing emergency lighting and marking escape routes. It is also necessary to provide foreign-language guides to nearby facilities and local transport as well as keep a guest register.

These rules are intended to ensure the safety of guests and prevent potential problems from arising. It can often be confusing for people visiting Japan for the first time to know how to use household equipment or transport when they go out. For this reason, having foreign-language pamphlets and other information available gives them peace of mind.

There are also regulations aimed at protecting the rights of neighbors, such as reminding guests not to make too much noise, responding to neighbors’ complaints and questions, and displaying signs indicating that the property is a minpaku.

Managers must register and renew their status every five years. Staff members for these businesses who interact with guests and neighbors are required to carry identification. Brokers must also register and are forbidden to include unregistered properties among their listings or serve as a intermediary for such lodgings.

Local Authorities Add Own Ordinances

To run a minpaku property, it is also necessary to comply with all ordinances and regulations related to the new law, as well as fire safety and architectural standards legislation, before completing registration.

Many local authorities have added their own ordinances governing minpaku businesses. These may limit location or periods of operation to reduce the effect on neighborhood residences and nearby educational institutions. For example, there may be designated areas where private lodgings are forbidden or only allowed on weekends.

What About Unlicensed Properties?

Foreign visitors commonly ask what will happen if they stay in an unlicensed accommodation. While there are no penalties for guests under the new legislation, choosing a licensed accommodation comes with the reassurance that a lodging meets government safety standards and that all other legal conditions have been met.

In June 2018 Airbnb removed some 80% of its listed properties to comply with the incoming law. It also canceled some reservations at unlicensed properties, causing widespread confusion among both Japanese hosts and foreigners who had made bookings. It is difficult to say at the time of writing exactly how many other broker sites with Japanese listings have taken the same steps, but the tide is certainly moving in that direction.

Great Potential Benefits

According to the Japan National Tourism Organization, the number of international tourists to Japan in 2017 rose 19.3% from the previous year to 28.7 million. The government has set a target of welcoming 40 million overseas visitors by 2020, when Tokyo hosts the Olympics and Paralympics, and is pushing forward with efforts to improve tourist sites and accommodations.

Minpaku has great potential for reviving properties that have fallen out of use due to depopulation, creating employment in smaller towns and cities, and even serving as emergency shelters during disasters. Private accommodation in traditional kominka folk houses in particular is gaining in popularity. For mothers looking after small children, minpaku is a convenient way of earning money and offers children the chance to speak English with foreign visitors and learn about other cultures.

There are many possible benefits for the country from minpaku. It is vital to ensure the new law is properly applied, so as many foreign visitors as possible can enjoy their stay in Japan.