First case of unlicensed private lodging in Japan sent to prosecutors

Kyodo

Police in Kyoto referred to prosecutors Friday four officials of a hotel management firm for allegedly running an unlicensed private accommodation service, making it the first case of its kind since a private lodging law came into force in June.

The four are suspected of providing accommodation to a total of 15 tourists in Kyoto between June 14 and 23 without obtaining a permit from the local government, according to the police.

The Kyoto city government had previously warned the company, Capital Incubator, over the unauthorized lodging operation, but the Kyoto-based firm did not follow the authority’s guidance. The four admitted to the allegation, telling police that it was too much work to renovate the property in order to comply with the law. The operator was recruiting guests via an online reservation site run by a major company.

Last month, the Japan Tourism Agency said that about 3,000 of 25,000 lodging facilities on online reservation sites were suspected of operating without permits.

The agency is strengthening its monitoring and urging the operators of reservation sites to immediately delete the details of unauthorized businesses.

The new law was enacted with the intention of compensating for a shortage of hotel rooms due to the rapidly increasing number of foreign visitors to Japan.

It allows private residences to be used as lodging facilities, a practice referred to as minpaku, while prohibiting site operators from listing unauthorized facilities on their websites.

The new law also requires keeping a registry of guests, maintaining hygienic conditions and responding promptly to any complaints from neighbors, among other things.

The maximum fine for operating an unauthorized private lodging, was raised in June to ¥1 million ($8,900) from ¥30,000, based on the revision of the existing law covering hotel businesses.

The Kyoto City Government reported to the agency earlier this year that the U.S. online home-rental service Airbnb Inc. had continued to list unlicensed private lodgings even after the law was implemented.

Concerned about potential violations, many municipalities in Japan have set their own restrictions. Tokyo’s Meguro Ward, for example, has banned the operation of private lodging businesses on weekdays.

In 2017, a record 28.69 million foreign visitors came to Japan, and the figure is rising at a pace that puts the country on track to post an even higher number this year.

In 2020, when Tokyo hosts the Olympics and Paralympic Games, the government is aiming to attract 40 million foreign visitors — up 40 percent from 2017 — and sees tourism as a pillar of the country’s growth strategy.