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Airbnb: Will Japan kill the golden goose?

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Individuals opening their private homes for travelers is nothing new to Japan. During the Edo Period (1615-1868), travelers such as the famed Matsuo Basho, on his journey to the far north, made use of the minpaku system.

While similar networks sprung up independently in many countries, the modern standard and the name — bed and breakfast, B&B or, more recently, BnB — were established in Britain after World War II. Today, the stereotypical “Vacancy” and “No vacancy” signs flapping in the wind have taken to the air. Travelers preferring a more homey atmosphere, a cheaper room, a country chalet — or even a night in a yurt or tent — are turning to Airbnb as they plan out their next trips.

Mutually assured assessment

Through the Airbnb website, travelers can contact hosts beforehand, see photos of the accommodation inside and out, and read reviews of the home and hosts written by other travelers. In fact, the system of reviews — word of mouth taken into cyberspace — is one aspect that distinguishes the system from the realm of traditional B&Bs.

The reviews work both ways, as owners can vet travelers as well. As Chie Davies, who recently added her third Airbnb property, one of two in rural Shiga Prefecture, explains, “Only welcoming good guests is the key.”

Although Davies has had overwhelmingly positive experiences, one bad apple slipped past her screening. A guest from Australia nitpicked about many aspects of her guest house, such as the fact that two mattresses were placed side by side and the pillow wasn’t comfortable enough. His severe demeanor led her to lower the fee for him — after all, the customer is god in Japan — but when it came time to write a review, she wanted to let other hosts know what they were getting themsleves into.

Ironically, the wife of this problem guest had been sweet all along and had written an appreciative review. To eliminate tit-for-tat exchanges, neither the owner nor the guest can view the other’s review until theirs has been submitted to the Airbnb website.

The review system is crucial for an enterprise with scant regulation compared to hotels — or even B&Bs, which might at least belong to an association that provides ratings. The nascent business model, started in San Francisco in 2008, was rocked in 2011 when guests thoroughly trashed a house in the city, smashing walls and stealing everything of value — all while writing cheerful emails throughout their one-week stay. Airbnb initially only offered words of support, but after facing criticism, the firm backed up its words with financial support.

The admittedly imperfect review system has led Airbnb to put together an “extortion policy” on its help page. Both guests and renters are warned not to use the threat of a bad review or promise of a good one to leverage discounts.

Steve, a longtime resident of Gifu who hosts “Pele’s Penthouse” on Maui Island in Hawaii, figures that promptly replying to guest queries is one key to staying near the top of search results. Also, refusing too many guests can work against hosts.

Hosts who get the maximum five-star rating 80 percent of the time enjoy “Super Host” status. Among other perks, this puts their property toward the top of any searches. Despite the apparent disadvantage of offering an older house short on amenities, Joe Johnson — an Airbnb traveler and host who would like to remain pseudonymous due to the unresolved legal questions surrounding the service in Japan — has still won five-star ratings from 73 percent of his guests.

Johnson’s sole negative Airbnb experience came as a guest. After securing a room months before a convention in Japan, he was asked just a week beforehand to send a copy of his passport, something he didn’t feel comfortable doing. Consequently, the host canceled the reservation, leaving him to scramble to find a room. While Airbnb helped him find another room, and partially paid for the more expensive room, they refused to red-flag the host for the last-minute cancelation.

Even without explicit extortion, the review system can be abused. Tony Torbert’s host in Cairns surprised him with a harsh review. On top of charges of noisiness (which Torbert denies), she also made the curious criticism that he and his family had “hid their nationalities” because they failed to mention that they were an American and Japanese couple.

Per Airbnb policy, hosts can refuse guests for any reason, including nationality. While both Japanese and foreign residents are hosting in Japan, the majority of guests appear to be foreign travelers. This doesn’t always sit well with Japanese locals, who are forced to endure the presence of foreigners in their neighborhoods.

An Asahi article notes that of the 22 complaints regarding minpaku issues dealt with by one consultation center in Tokyo through October of this year (up from just 6 in 2014), the most common was “Seeing so many foreigners coming and going really gives me the creeps.”

Letting in a legal gray zone

In addition, it has been foreigners in Japan that have been busted in prominent cases involving Airbnb. In 2013 a Korean man was arrested for operating a 37-room unlicensed hotel out of several apartment buildings. A year later, a Briton was arrested in Tokyo for running an Airbnb without a license, and was subsequently fined ¥30,000 by the Tokyo Summary Court.

Toshiteru Shibaike, an attorney with the Tokyo Public Law Office’s Foreign nationals and International Services Section, says that while Japanese law is vague on the point, in principle, anyone charging for lodging must first get permission from local authorities. “To my knowledge, Airbnb hosts don’t do that.”

While many early Airbnb hosts didn’t pay taxes — another potential point of illegality — most now do. “We are careful to document everything and pay appropriate taxes,” explains Davies.

Shibaike reckons the chances of Airbnb becoming illegal are very slim, but he foresees problems in particular for apartment owners or renters.

“The biggest issue is neighbor complaints, especially in apartment buildings, where the management association will likely want to shut an Airbnb operation down if there are neighbor complaints.”

Airbnbs run out of private homes, especially those in the countryside, seem to be on much firmer ground.

“While the neighborhood association (chōnaikai) controls things like trash removal, they generally wouldn’t have the power to force someone to stop hosting Airbnb,” Shibaike says.

Hiroshi Kitamura runs a ryokan — a country inn — in the Japan Alps.

“We don’t hear much about Airbnb out here, but of course, from the point of view of those who run ryokan and hotels, we don’t like it. Those in the industry are prepared to deal with problems like food poisoning or disasters. And we have insurance.”

On Dec. 11 the Asahi Shimbun reported that a bill to regulate websites offering lodgings had been submitted for consideration in the next Diet session in the new year. The article brought up a number of prickly points regarding Airbnb that will need to be cleared up, including who should pay compensation in the case of damages.

Establishments offering lodging such as ryokan, minshuku (guesthouses) and hotels are required to keep a copy of the passports of foreign guests residing abroad; non-Japanese residents may be asked to show some form of identification (a driver’s license or residence card, for example).

While regulations may be tightened or just clarified and enforced more vigorously, most seem easy enough for Airbnb hosts to comply with. Food sanitation is not an issue if no meals are offered; fire safety precautions (like making extinguishers available) are easy enough to follow; passports can be copied; and permission from local governments can be sought.

The ‘sharing economy’

Airbnb and Uber are the kingpins of the much-ballyhooed “sharing economy.” While Airbnb hosts are “sharing” their homes, Uber drivers are sharing their cars. Accessible via the Uber app, drivers post their car and location, effectively utilizing it as a taxi at times that are convenient to them. Uber hosts, however, are finding it tough to make significant inroads in Japan.

It has been estimated that there are three times as many taxis in Tokyo than New York City. On top of sheer numbers is quality: Japan’s taxis are always well-maintained and clean; drivers are professionals who rarely refuse a ride. There is also the issue of security; a high-profile rape by an Uber driver in India may put off security-conscious travelers. Uber mainly enjoys an advantage at night, when Tokyo taxis add a 20-percent surcharge and can be harder to find.

In addition to the weak yen, being able to hail taxis and book rooms in English via smartphone apps may be one reason why more foreigners are traveling in Japan. In addition to boasting prices that are generally lower than for other forms of accommodation, the Airbnb reservation process is appealing. Gary Ross, an Airbnb traveler with a background in Web design, praises the layout and user-friendliness, especially in comparison to competitors Jalan.net and TripAdvisor.

“Airbnb is so much easier to use because it’s self-contained and intuitive,” Ross explains. “And TripAdvisor can lead users to a Japanese website which travelers won’t want to deal with.”

While the availability of listings in English is attractive to foreign travelers especially, the fact that many hosts and guests are working in their second language can result in confusion and miscommunication. For example, the host of Hanasaku in Nara, a lodging for women and couples only, writes (or pastes from translation software) in the blurb: “Washing you Jose. Sunny. Breakfast is on the tatami.”

One aspect of Airbnb that makes it attractive to those on a tight budget is the frequent availability of kitchen facilities, meaning travelers don’t necessarily have to eat out. Owners can offer breakfast and dinner, too.

On the other hand, some Airbnb hosts charge extra for cleaning, towels and air conditioning. Also, while the fee shown on the website is usually the same for one or two people, in some cases the price for four is double. And Airbnb’s reservation system can be pretty unforgiving.

Not being familiar with the system, in the process of contacting a host to inquire about rates for children, I inadvertently sent out a reservation request. When I tried to cancel just an hour later, Airbnb hit me with a service charge of over ¥1,000 — more than 10 percent of the room charge.

Sneaky surcharges aside, prices in the sharing economy are generally cheaper. Ordinary citizens have more opportunities to make extra cash using their car or renting an abode that has some appeal to travelers. But the effects on the economy at the macro level are not all positive.

First, there’s the reasonable prediction that Airbnb will push some hotels out of business, leading to a loss of jobs. Some studies have also shown that Airbnb is having an inflationary effect on rents. John Gullick, an assistant professor at Catholic University of Daegu, South Korea, with a doctorate in sociology, explains that many city dwellers are listing their properties on Airbnb rather than putting them up for rent. This, he explains, has led to supply shortages, with “the collective effect of making inflationary housing rents even more inflationary.”

While the economic benefits are important, Airbnb hosts emphasize the human factor as well.

“It’s about a lot more than money. I want to provide travelers with a valuable experience,” Davies explains.

Interacting with travelers is a great experience for her daughters, who are being raised trilingually: English from their British dad, Korean from their mom and Japanese at school.

“I’ve made friends with guests who I have kept in touch with many months later,” she adds.

Johnson concurs: “I had a great time with a traveler from Spain. We went drinking together,” he says. “I think he appreciated the detailed advice I provided about getting around and the best places to go. You can’t get that level of personalized interaction while staying in a hotel.”

The number of properties offering the service in Japan recently eclipsed 21,000 and is rising rapidly. Not coincidentally, the number of foreign tourists is increasing concurrently, with 19 million expected in 2015 — a record.

For a country that bandies about its need for greater internationalization and globalization, Airbnb is a boon. Japanese with enough English ability can not only rent out rooms but also interact with foreign travelers on a daily basis. This, in turn, will lead to more intimate exchanges abroad, where Japanese tourists can see life firsthand from the homes of their Airbnb hosts. That is, unless new legislation kills or culls the golden-egg-laying goose that Airbnb has become for hosts and travelers.


So you want to be an Airbnb host?

With the legality of Airbnb being openly debated in Japan, expect some legislative action in the coming months. For those hosting or considering doing so, here are some key considerations to bear in mind.

Owning or renting?

Owning your Airbnb property means you don’t have to worry about landlords claiming you are breaking your rental agreement by subletting to a guest. This is especially true for city apartments, where neighbors might take particular exception to a parade of strange foreign faces.

Serving food?

Offering meals makes a host subject to food sanitation regulations. However, the beauty of Airbnb is you can simply change your listing at will to make it clear that you are not offering meals if you are feeling the bureaucratic or legislative heat — or if you are just too busy.

Driving?

In a overlap of concerns affecting drivers using the Uber car-sharing app, those who “welcome and see off guests” in a private car may face greater scrutiny.

Other considerations

Dutifully paying taxes and installing a fire alarm system are strongly recommended for all hosts.

How to get started

Joe Johnson says it took just an hour to snap some pictures and fill out the hosting section on the Airbnb website. Thirty minutes later he was delighted to receive his first booking: motorcyclists needing a room. For anyone with minimal computer skills, becoming an Airbnb host is a breeze.

This article was updated to clarify registration procedures at lodgings on Dec. 18. Your comments and story ideas: community@japantimes.co.jp

  • disqus_vBekJrf7g5

    TL;DR?
    Answer: ‘Yes’.

  • zer0_0zor0

    Kill it!
    Quick!
    The Sharing Economy is a sham neoliberal scheme by Wall St. and the CIA to destroy the Main St economy and transfer more wealth to the “investor class”.

    • R0ninX3ph

      I seriously hope you’re trolling…………………… Otherwise, I have some very nice tinfoil hats you might be interested in.

      • Charles

        He is.

      • Jonathan Fields

        He’s not. He’s a paranoid schizophrenic who truly believes all the nonsense he spouts on here. If you happen to stumble upon his blog, you’ll see.

      • disqus_vBekJrf7g5

        Give us a link! That sounds hilarious!

      • disqus_vBekJrf7g5

        Give us a link! That sounds hilarious!

      • disqus_vBekJrf7g5

        Give us a link! That sounds hilarious!

  • P. A. Koroluk

    “Establishments offering lodging such as ryokan, minshuku (guesthouses) and hotels should get a copy of a passport or proof of permanent residence from all foreign guests.”

    There
    is no legal requirement for hotels to obtain documentation from anyone
    who resides in Japan, regardless of nationality, and, while it does not apply to non-registered properties, refusing to
    accommodate a guest based on a race or nationality (or almost any reason) is a clear
    violation of Japan’s Ryokan Law. Japanese law does require hotels to retain a copy of passports for guests who do not live in Japan and hotels may establish a neutral policy of requesting photo ID from all guests, but they may not have a policy which discriminates among guests who live in Japan.

    The protection provided by the Ryokan Law is one of the few areas where Japan provides clear legal protection against racial discrimination.

    • Stewart Dorward

      Also, airbnb guests can register all such details on their profile meaning it is superfluous to ask.

    • Patrick Lovell

      All that you say may be true – regarding the law requiring a Passport at check in – but I can tell you that almost all hotels and ryokan request that one be provided. Even when tell them that I am a permanent residence, some – not all – have refused to allow me to stay without providing my identity card which I almost always refuse to allow them to copy. I often have to demand that they follow the law and, as a result, check in is sometimes a lengthy process.
      Only the management in ryokans, hotels, and business hotels are up on the law and do follow it. The staff rarely know the law and just follow their training: gaijin – get passport mentality.
      It sounds as if you have been in Japan a while, so you surely know that the law in Japan means little when you are on the line.
      AirBnB is going to have a tough time especially if it begins to catch on, and if allowed to continue, will be a niche business for the most part.

  • P. A. Koroluk

    “Establishments offering lodging such as ryokan, minshuku (guesthouses) and hotels should get a copy of a passport or proof of permanent residence from all foreign guests.”

    There
    is no legal requirement for hotels to obtain documentation from anyone
    who resides in Japan, regardless of nationality, and, while it does not apply to non-registered properties, refusing to
    accommodate a guest based on a race or nationality (or almost any reason) is a clear
    violation of Japan’s Ryokan Law. Japanese law does require hotels to retain a copy of passports for guests who do not live in Japan and hotels may establish a neutral policy of requesting photo ID from all guests, but they may not have a policy which discriminates among guests who live in Japan.

    The protection provided by the Ryokan Law is one of the few areas where Japan provides clear legal protection against racial discrimination.

  • woodynatural

    The sharing economy is not a golden goose, it’s a money making machine for a very small minority dumping the risks and costs on the big majority, what a crap that people believe all that stupid silicon valley and wall street spin…

    • Charles

      In some cases yes, in some cases no. I haven’t tried Airbnb yet (as a foreigner, I am worried about getting in trouble for trying to do something outside the scope of my visa), but I used to sell lots of stuff on eBay when I was 17 years old (a credit card was required to register, and I managed to convince my parents to let me use theirs). I actually made good money off of it. I once bought a Vectrex video game system at a yard sale for $1 that I sold for over $60 and once found a package of physics transparencies that someone had thrown away on a college campus which I sold for over $100. These were only a few of the many times when I made real money on eBay.

      However, these things can also be a race to the bottom. Whenever I try to sell my textbooks, which may have cost $100 or more, or eBay, I always get insultingly low amounts for them because every other college student had the same idea. The same thing happens when I bid for jobs on Get a Freelancer–being underbid by guys in India or Pakistan who think $2 an hour is good money, who apparently don’t have to pay first world costs of living.

      It’s capitalism. Fewer regulations, fewer guilds, less protectionism. Some people benefit from it, and some people don’t benefit from it. The liberals always say things like “Oh, gee, this is great for the Top 1%,” but you know, when I was 17 years old and making good money on eBay with stuff I got at yard sales and so forth, I don’t think I was in the Top 1%, but I was certainly benefitting.

      • zer0_0zor0

        The airbnb sharing economy is not comparable to selling things on ebay.

        The sharing economy is about the services sector and so-called business models.

      • GBR48

        I think ebay, uber and AirBnB are comparable. It’s all about making cash out of spare things, spare space and spare time.

        The internet makes this possible by replacing numerous local middle-men, who would take a larger profit to connect sellers/service providers with buyers and end users, with globalised technologies that only need to take a much smaller amount from everyone, and allow individuals to interact with each other, anywhere on the planet.

      • Charles

        I agree. I made a good side income, alongside my full-time job, using eBay, in the mid 2000s, when I was still a teenager. If I had a better visa here in Japan, I’d probably be making money off my spare room on Airbnb or a similar service. My income is less than $26,000 a year for full-time work, so I could hardly be considered part of the “Top 1%” or “a very small [economic] minority.” These people who bandy around “Top 1%” and “money making machine for a tiny minority” on here, about a service that actually democratizes the lodging industry, are ridiculous.

        It’s funny how the same people who bandy around “Top 1%” and “money making machine for a very small minority” (basically words often misused by the socialists) are often also quite nationalist and racist, supporting and defending Japanese xenophobia, if you read their other posts. They’re socialists, shooting down free enterprise like Airbnb, yet they’re also nationalists who think Japan and other first-world countries should close their borders. National Socialists. Hmmm, where have I heard that before?

      • Charles

        Go read Wikipedia. eBay is called “collaborative consumption” and is part of the sharing economy.

  • Charles

    I have been interested in renting out my spare room (and maybe buying a small condominium in the future and renting part of that out), so it was interesting to read this. This article was definitely interesting and I read it in its entirety. However, like most “doing business in Japan” articles/books, the author conveys a great deal of information, ignoring the elephant in the room–visas. If I let guests stay in my extra room and charge them, am I going to get deported or severely penalized because it violates the terms of my visa? Or can I get permission or some kind of special waiver attached to my visa to let me do it? I have an Engineer/Specialist in Humanities/International Services visa. The trouble with these “doing business in Japan” guys is that they’ve been permanent residents for so long, they’ve forgotten what it’s like to try to be successful on a one- or three-year visa.

  • wanderingpippin

    It’s nice to know that the host might put in a fire extinguisher. But if somehow a guest ends up being seriously injured or dying in a fire or some accident in the place, do the hosts have insurance that will pay the victim or family? I’ve read several articles but never seen the answer to that question.

    And somehow a system where one can inadvertently send a reservation request that entails a cancellation fee when merely trying to make an inquiry doesn’t sound very user friendly.

    • GBR48

      The system didn’t send the inadvertent request, the author did.

      Nobody should go on holiday without suitable insurance. This covers medical issues up to and including the intervention of the grim reaper. If you are injured or die due to criminal activity or something like a faulty boiler, the law would kick in just as it would for anyone else.

  • Jim Jimson

    >This doesn’t always sit well with Japanese locals, who are forced to endure the presence of foreigners in their neighborhoods.

    That’s some pretty brazen racism from both the complainers and author John Spiri. The way this is worded implies an disturbing level of tolerance for bigotry.

    • zer0_0zor0

      Nonsense, Japan is not the a pluralistic society like the USA, and most local neighborhoods are not tourist attractions.

    • zer0_0zor0

      Nonsense, Japan is not the a pluralistic society like the USA, and most local neighborhoods are not tourist attractions.

    • GBR48

      I’m pretty sure there is a certain amount of tongue-in-cheek satire here in the language used in the article, recognising the nervousness of many Japanese people to being so close to gaijin, whose language they often do not speak and who do not understand the cultural minutiae of Japanese social interactions, as well as the accusations of xenophobia commonly levelled in JT comments.

      Fear is a natural response to the unknown, and having non-Japanese neighbours is much more likely to be an unknown in Japan, than having neighbours of a different race or nationality is for us in the far more multicultural West.

      There is also the natural concern that parents and women will have, if their next door neighbour changes every week or two in a rental, foreigner or not. That concern is universal and understandable.

  • Ken Yasumoto-Nicolson

    Owning your Airbnb property means you don’t have to worry about landlords claiming you are breaking your rental agreement by subletting to a guest.

    However, even if you own your flat, you could be breaking your resident’s agreement. My place, for instance, just this year introduced a new clause for explicitly forbidding AirBnb-type rentals.

    • GBR48

      Minpaku lets may require a customised, official sanction and licensing regime, to protect hosts from being banned for no reason other than the vague fears of neighbours and landlords, as well as from the inappropriate licensing regime currently in place for running a full-scale hotel.

      Such licensing, if done well, could also protect guests from unscrupulous investors letting dangerous properties, and keep the neighbours happy, knowing that they have someone to call if there are any problems. Unfortunately, local and national governments are generally very slow to react to any need, rarely respond with due sensitivity to the issues concerned, take forever to do anything and then comprehensively balls it up. One can only hope for the best.

      In Japan, the quick, minimum-fuss solution is a simple, outright ban, to keep the gaijin from ‘creeping out’ the locals. Now that iRooms have taken off, expect a rash of this sort of thing happening.

      Many people will only be comfortable in minpaku accommodation, and if it is not available in Japan, will choose somewhere else. If the supply of such places to stay dries up as a result of any crackdown, it will hit tourism, create a lot of bad press online for Japan as a tourist destination, and make the adequate supply of rooms for 2020 a very difficult, if not impossible proposition.

      Japan has empty properties, tourism is one of its few growth industries and given language and distance issues, online room booking is the manna from above that links the two together. Rarely does a national economy get a free ride like this, just when it needs it. If anything, the government needs to protect minpaku lets and their hosts.

      Those gaijin folk that residents see, appearing from apartments in their area, may soon be the reason their local konbini hasn’t closed.

    • disqus_vBekJrf7g5

      But I thought you were a big success in Japan! And you live in a ‘flat’? I’m what you call a ‘hater’, but I’ve got a house.

    • disqus_vBekJrf7g5

      But I thought you were a big success in Japan! And you live in a ‘flat’? I’m what you call a ‘hater’, but I’ve got a house.

    • disqus_vBekJrf7g5

      But I thought you were a big success in Japan! And you live in a ‘flat’? I’m what you call a ‘hater’, but I’ve got a house.

  • Joshua Wisniewski

    “This doesn’t always sit well with Japanese locals, who are forced to endure the presence of foreigners in their neighborhoods.”

    This sounds like a Japanese person wrote this article.

    Precisely why I don’t want to live in this country much longer. I’m a foreigner that the public must “endure”. Japan has to deal with it sooner or later, they *need* foreigners whether they’re living among them or just touring.