BUSINESS｜TRAVEL

3 Reasons Why Airbnb Is Unpopular in Japan

Capsule hotels are booming while Airbnb hosts face difficulties

In May 2022, Japan topped the 2021 Travel & Tourism Development Index despite the tight borders that kept out most visitors.

Now that Japan’s borders are fully open again to tourists and the yen at historic lows, it’s time to tick a visit to Japan off your bucket list.

However, if you try to book an Airbnb room as you would in most of your other travels around the world, you’ll notice Airbnb usually isn’t the best option in Japan. Airbnb Japan’s lodgings tend to be away from tourist spots and many of them are room-sharing instead of renting an entire apartment.

According to global statistics, you won’t find Japan in the top 10 of the most Airbnb listings. US, France, and China dominate the top three.

So here are both positive and negative reasons why Airbnb isn’t—at least, not yet—popular in Japan.

Reason 1: Capsule Hotels and Business Hotels Outperform Airbnb

In Japan, you don’t need to worry about sleeping on the street. From ‘Internet Cafe’ to ‘Super Sentō’ bath facilities, there’s always somewhere with a light on to welcome you in, aside from hotels.

In fact, many Japanese claim that capsule hotels are so convenient that Japan doesn’t need Airbnb. In addition to the existing capsule hotel facilities, new fashionable hotel chains such as 9h (Nine Hours) are filling the needs of the young generation who appreciate the futuristic design of the installation and the highly affordable cost.

Nine Hours facilities are located near the major train stations. The cost for a night varies depending on the location, but they’re moderately priced in the range from $20 to $45.

Their vision is to make the stay as stress-free for visitors. Male and female lodgings are on different floors. Shower rooms are squeaky clean, and the capsule bunks are cocoon-shaped with a light adjustment knob and free Wi-Fi. And of course, if there’s any problem, you can ask for help at the front desk.

Even if you can’t afford to stay at the Imperial Hotel, you can still peek at the best parts of this multi-faceted country on a small budget. That also explains why family travelers often prefer so-called business hotels over Airbnb.

Reason 2: Regulatory Restrictions on Vacation Rentals

When Airbnb launched its service in Japan in 2014, vacation rentals were not strictly controlled by the government because private lodgings were outside the scope of the Hotel Business Act law.

In 2018, the Japanese government legalized minpaku, home-sharing businesses, to prevent legal complications, and it lowered the barrier of entry for individual real estate owners to list their properties on Airbnb.

However, the new law brought the opposite outcome. It caused homeowners to exit the vacation rental business due to restricting rentals to a maximum of 180 days per year.

The law apparently led to the closure of over 40,000 listings on Airbnb Japan. It temporarily lost 80% of its facilities in the country. Airbnb says hosts have returned to the site, but the 180-day rule is still a huge hurdle for homeowners who want a profitable business.

Japanese media speculates that the former Secretary General of the LDP, Toshihiro Nikai, is pulling the strings behind the scenes. He has been the chairman of ANTA—All Nippon Travel Agents Association—for a long time. This defensive act protecting hotels and travel agents explains why Airbnb has been struggling in Japan.

Anticipating the increase of international tourists, however, the Japanese government is eying relaxing regulations further in 2023 by removing the requirement to obtain a license as a private lodging operator when homeowners start their vacation rental business. The government’s desire to protect the hotel industry while also attracting foreign tourists to stimulate Japan’s economy keeps putting the government in a difficult position.

Reason 3: Strong Sense of Community in the Neighborhood

The customer experiences on Airbnb will improve as the market matures in Japan. However, from the homeowners’ standpoint, the psychological barrier to renting out a home to strangers remains far higher than in other countries.

For instance, if you own an unused home in a rural area, you want to be careful not to cause any trouble with neighbors. According to the Airbnb Japan website, many hosts have delivered flyers to neighbors that explain their business before welcoming the first guests. Some owners visit each neighbor to obtain their consent, while other hosts regularly open their property to the public and welcome local residents to take a look inside.

It would be easier if you didn’t care what your neighbors thought. But here in Japan, people want to keep it peaceful because chōnaikai, the neighborhood association, is still a thing even in Tokyo.

Having a bad reputation in the district means you could land on the agenda of the next community association meeting. Your Airbnb side hustle could cost you more than you bargained for unless you work strategically.

Conclusion: Japan’s Obsession with Cleanliness, Hospitality, and Convenience

Japanese people joke about themselves being obsessed with cleanliness. And there are a few other obsessions I’d like to add: hospitality and convenience.

In general, when Japanese people go on vacation, they want the flexibility and freedom to stretch their legs wherever they go. The back-and-forth communication with Airbnb hosts when staying a night at someone’s private place is a hassle they’d rather avoid, at least in Japan.

Capsule hotels are the optimized symbol of Japanese people’s obsessions. In this busy country, they offer a convenient, clean, and comfortable night at an affordable price until the first train starts running before sunrise.

Sources: https://www.alltherooms.com/analytics/airbnb-statistics/ https://dot.asahi.com/dot/2018061500001.html?page=2 https://www.nikkei.com/article/DGXZQOUA284FJ0Y2A021C2000000/?unlock=1

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