The Cabinet approved a bill Tuesday that would impose heavier penalties for unauthorized private lodging operators amid concerns over issues such as noise and garbage disposal in residential areas.
The government drafted the bill as part of the effort to get tough on unlicensed private lodging operators, while at the same time it is encouraging deregulation in the sector to address the shortage of hotels and inns in the lead-up to the 2020 Tokyo Olympics.
The bill to revise the Travel Agency Act would allow the government to impose fines of up to ¥1 million ($8,800), up from the current ¥30,000 ($260).
The revised law would also allow prefectural governments to conduct on-site inspections of unauthorized lodging businesses, which could then face suspension.
Meanwhile, licensed operators would face heavier fines of up to ¥500,000, compared with the current ¥20,000, if they fail to abide by record-keeping rules, according to the bill.
Operators of private lodgings, known as minpaku, saw regulations change in April allowing individuals seeking to offer up rooms to more easily obtain a license. Operators often list rooms online using sites like Airbnb.
As part of the effort to deregulate the minpaku business, the government is planning to submit a new bill to the Diet that would ease the amount of paperwork currently required to operate such an establishment.
According to an October-December survey by the Ministry of Health, Labor and Welfare that covered some 15,000 rooms advertised online, at least around 30 percent, or 4,600 were operating without official permission.