Only a small number of minpaku private lodging operators have registered as required under a new law.
Minpaku services let travelers stay in spare rooms or other parts of private residences for a fee. The law on offering accommodations at residences for a fee (the minpaku law), which goes into effect on June 15, sets the maximum number of days a minpaku provider may offer the service at 180 days per year.
This has prompted some operators to complain that they cannot run a viable business with that few days.
There are also concerns that if the number of registered operators does not increase in the future, there will continue to be minpaku business operators who do not obey relevant laws and ordinances.
Operators fear losses
According to the Japan Tourism Agency, only 724 units were registered for minpaku with relevant authorities from March 15 to May 11, which is substantially below the number of units available on minpaku websites -- said to be several tens of thousands.
Only 17 units were registered with the Shinjuku Ward office.
"Some anticipated that 1,000, 2,000 or more units would be registered with the ward," an official in charge of the matter said.
One factor in this slow progress is the provision in the minpaku law that sets the maximum number of business days at 180 per year. Some municipalities place further restrictions on the number of business days by ordinance.
Therefore, many units' owners are concerned that their businesses will not be profitable.
"Units can't be used for the minpaku business for half an year. That could be a losing investment," said a 36-year-old company employee who plans to start a minpaku business in Taito Ward, Tokyo.
Condo boards reluctant
Another reason for the sluggish registrations is the deep-rooted desire to avoid trouble with neighbors. According to a nationwide survey conducted by the Tokyo-based Condominium Management Companies Association, over 80 percent of condo association boards plan to prohibit minpaku in their properties, while only 0.3 percent allow it.
With minpaku facing increasingly strong headwinds, unit owners are looking at obtaining permission as "special zone minpaku businesses" that are permitted in municipalities designated as national strategic special zones. They are also looking into getting permission under the Hotel Business Law.
If they operate their minpaku businesses under these systems, they can make full use of their rooms because they do not limit the number of business days.
In Osaka, which is a national strategic special zone, the number of rooms for special zone minpaku businesses increased to 1,899 as the end of April from 1,485 at the end of February. In addition, the number of simple lodgings newly approved in Kyoto under the Hotel Business Law increased to 871 in fiscal 2017 from 39 in 2012.
Unscrupulous practices
With one company after another entering the minpaku business, there are growing expectations for minpaku as accommodation facilities for the increasing number of foreign tourists.
However, if registrations under the minpaku law remain low, the number of people offering vacant rooms will not increase. As a result, the minpaku business will not expand.
The law will also be limited in its ability to reduce the number of unscrupulous operators running minpaku businesses without permission, causing the properties to fall short of people's expectations.
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