Now that the 2020 Olympics is approaching, Japan has a big problem. That is, “the lack of rooms at hotels” and “minpaku” (the practice of renting out private homes and rooms), which is considered illegal according to the Hotel Business Law. How will Japan solve these issues? Let's experience it here, today.
This web page is a page for doing a “minpaku simulation” according to the “minpaku shinpou”, or the new laws on minpaku, that are currently being developed (aimed for January 2018) for the 2020 Tokyo Olympics.
The “minpaku simulation” attempts to—based on the latest information—have you mentally experience the problems regarding minpaku, such as the minpaku problem, the minpaku shinpou, the characteristics of foreign tourists, minpaku management, minpaku earnings, and risk prediction. This will help you understand the background of the “minpaku problem” to be able to take proper safety measures.
The scariest thing in the world is “ignorance”. You become “terrified” when things that you didn’t expect happen. Conversely, you can prevent that by having “knowledge”.
I have experience with minpaku and also have acquaintances working in the real estate field and a government office. I believe I have a duty to provide their perspectives in an unbiased and equal manner, and to share that information without causing any misunderstanding.
With the 2020 Tokyo Olympics just around the corner, foreign tourists coming to Japan have been rapidly increasing. With that, the Ministry of Land, Infrastructure, Transport and Tourism is undertaking the task of “increasing in size” lodging facilities by building “extensions.” Also, the government is developing new laws mainly for “vacant houses and rooms” in order to increase the number of guest rooms. This work was not only picked up on TV and in the news, but also in a TV series about “minpaku” called Haikei, Minpaku-sama. This became a hot topic, as popular actress Meisa Kuroki and popular actor Hirofumi Arai played the main characters.
According to the results of the “accommodation travel statistical survey” that the government disclosed, a cumulative total of 42,360,000 people stayed in a lodging in Japan this May. This marks an increase of 5.7% compared to last May. And counting only foreign guests, the increase was 17.3%. Calculating from that, by the time the 2020 Tokyo Olympics and Paralympics are held, about 10,000 guest rooms are thought to be lacking.
In order to meet this demand, using empty houses (“minpaku”) as accommodations like hotels started to become popular.
A pioneer in the minpaku industry is the famous Airbnb, which started in 2008 as the U.S.’s first minpaku website. Airbnb is a website that connects “people who want to lend empty rooms (hosts)” and “people who want to rent rooms (guests)” from all over the world. It is already used by over 65,000 cities in 191 countries, and the total number of guests exceeds 150,000,000.
Now I calculated how many minpaku properties and owners there are in Japan using an analysis tool.
|Provisional data（as of October 2017）
|Two biggest cities
I found out that, as of right now, although there are empty rooms offered everywhere in Japan through Airbnb, Osaka and Tokyo are the cities that are mainly used.
In addition, when asked why they use minpaku, foreign tourists gave the following reasons.
The price range for minpaku is 3000 to 9000 yen.
On the other hand, one night at a lodging facility in tourist spots or big cities can cost from 13,000 to 80,000 yen.
(Websites used for price comparison: Trivago, Yahoo! Travel, Travelko, Agoda, Jalan, etc.)
As for “leisure hotels” (aka love hotels), which tend to be cheaper, you usually cannot reserve a room. Also, because they tend to have a long history, most places cannot speak English. Many tourists said that they would rather make good use of money outside the hotel rather than for a room in which they would only stay for a short time.
By using a website for minpaku on the internet, you can see the possible accommodation dates at once, so you can quickly reserve a room. Reservation goes smoothly especially because these websites accommodate different languages.
Many hosts are flexible with, for example, check-in and check-out times and storing your baggage.
There are services such as free pocket WIFI rental and using toiletries.
It’s pretty simple, but complaints regarding minpaku arose due to “a breach of manners” resulting from the difference in cultures and rules.
Main examples of complaints include the following.
・”The amount of garbage” not properly sorted（increases with the number of guests）
・”Security problems” that lack safety (coming and going of an unknown number of foreigners）
・Strange noise (sounds of suitcases or loud voices）
What is natural for foreign tourists can often be truly unpleasant for Japanese people living near the minpaku facilities. The unpleasantness got worse and worse and resulted in a large number of complaints.
Even if we tried to listen to the voices to “ban minpaku”, because there are so many people involved including “hosts”, “guests”, “administrators”, and “minpaku websites”, it is difficult to seek responsibility from a specific person. The fundamental point of who is in the wrong and whose action we need to stop to solve the problem cannot be specified. Thus the problem is taking a long time to solve. We cannot rely on reporting either because reports cannot necessarily be trusted; their purpose might be to destroy rival companies. In this way, solving the minpaku problem has many difficulties.
As of November 2017, minpaku is illegal with the exception of certain areas. And as of right now, only “tokku minpaku”(minpaku in special zones) are accepted legally by law. In other words, due to a national strategy, minpaku is only permitted as an exception to the Hotel Business Law in areas such as Ota-ku of Tokyo (which is near Haneda Airport) and a very small fraction (“special zone”) of Osaka-shi, Osaka-fu. This means that, in places other than the special zones, earning money by letting people stay at a house or room would be illegal unless you satisfy the requirements stated in the Hotel Business Law.
The four categories of business as stated in the Hotel Business Law are as follows.
Requirements：Western-style/more than 10 rooms/others
Requirements: Japanese-style/more than five rooms/others
Requirements: If the number of guests is limited to five people per floor, there must be at least two bathrooms per floor./others (for example: capsule hotels, bed & breakfast)
Requirements: Due to a revision of the law, this has became almost the same as simple lodging businesses. (For example: Years ago, a part of a regular house might be rented out as a student dorm.)
This means that even if you try to start “minpaku” from an “empty room” that you have right now, it is impossible to get permission from the Hotel Business Law as of right now. However, if you look at the houses, roads, and schools within 300 meters from where your room is located, and the property is in a proper place and fulfills certain requirements, and “can be renovated,” it could be possible to get permission from the Hotel Business Law.
In order to solve the legality problem, “minpaku shinpou” (new laws on minpaku) are expected to be established in January 2018. According to the minpaku shinpou, the two minpaku businesses below will be accepted.
A method of lending a part of your own house. Lending period is expected to be within 180 days of applying.
A method of lending your own house or a room rented for minpaku. The lending period for this one is also expected to be within 180 days of applying.
Even if minpaku is allowed legally, if actually doing it causes problems, complaints will only grow. With the 2020 Tokyo Olympics approaching, we must welcome many foreign tourists while also being careful with the danger that lurks in the shadows.
The first point is the business owner’s manners. The foreign tourist’s attitude will change depending on that, too. As I have said in the beginning, “ignorance” causes the unexpected to happen. That is why the “background” and “measures taken” up until now becomes important. The best solution for bad-mannered guests (regarding trash and noise) is for each area’s representative to “warn” the guests, with the help of witnesses and based on proof.
On Airbnb, a “safe” and “reliable” system in which you can rate each other was introduced. When a guest makes a reservation, they mainly look at the room’s reviews. Although it is not a hotel, what is expected is the total evaluation based on the “price,” “cleanliness of the room,” and “distance from the train station.” On the host’s side, there is also a pre-approving policy so the host can check whether the guest had “a bad evaluation” in the past. Through this system, it is hoped that both the guests' and the host’s manners improve.
As stated above, if the legislative system changes, and the guests' and the host’s attitude also change, Japan’s minpaku will move to the next step.
It is important for each and every person to do what they can in order to make a win-win situation for everyone involved.
Now, from here, let’s do a simulation according to specific requirements. This is for people who will manage minpaku based on the minpaku shinpou.
First, I would like to simulate the host’s earnings. Let’s calculate with 180 days per year, or in other words 15 days per month.
If we calculate based on the average price for one night at a minpaku and the current minpaku data, the earnings would be 9000 yen x 15 days, or 135,000 yen per month. In a year, it would be 1,620,000 yen.
However, the actual accommodation price will include “the basic charge+fees for additional persons+cleaning fees.”
The setting changes depending on the host, but because cleaning fees will only be paid “for one day,” the earnings will change depending on the optional fees you set at first and the length of the stay. By surveying foreign tourists in a city, I found out that most people come in groups of two and stay for five days, four nights.
If you set the basic charge at 6,000 yen, fees for additional persons at 1,000 yen per person, and cleaning fees at 2,000 yen, you can expect to earn about 130,000 yen per month.
The average price for one room in Tokyo costs 70,000 to 100,000 yen per month.
Also, it will cost around 15,000 yen per month for electricity, gas, and water. However, you must explain the rules about electricity to the guests; or else they might use the air conditioning for 24 hours or leave the lights on, and the electricity bills will increase and you will have to change expendable supplies often.
Furthermore, in order to make a better environment, you must get WIFI. Normally, tourists would rent WIFI at the airport. However, if the host is also going to provide WIFI, make sure it doesn’t have a speed limit. For hosts who want to be ready for the loss of routers or malfunctioning, I also recommend fixed-line internet (both cost about 5000 yen).
Other expendable supplies include shampoo, body wash, garbage bags, cleaning supplies and electronic supplies. (Can be mostly purchased in 100 yen shops)
If you use a cleaning company for cleaning, you will need to pay fees for that too. It will cost about 6,000 yen every time. However, you won’t need to worry about this if you are going to clean the room yourself.
According to the above, for the homestay-type, since you will be lending a part of your own house, there will be no extra fees for rent. However, for the no-host type, if you rent a room and manage a minpaku, you must subtract the rent. One room in Tokyo costs an average of 70,000 to 100,000 yen per month, so after subtracting that and other fees of 15,000 yen, what will be left for you is 30,000 to 50,000 yen. If you are only going to manage one room, there may not even be enough money to hire someone to clean the room.
However, you can start minpaku at a low investment. Deposit and key money for one room in Tokyo will cost 150,000 to 300,000 yen, so compared to other real estate investments, retrieving the initial investment will be quick.
Also, communicating with foreign tourists would be a unique experience in Japan. You can improve your English and other foreign language skills and become more sophisticated by learning about different cultures. As long as you prevent problems, it will be a splendid environment.
First, download minpaku apps like Airbnb, and learn how it works by looking through all the explanations. By acting quickly when you get an inquiry, you will be able to set up a reservation. Next, make sure you know the numbers of inquiries and reservations per day. Depending on the number, you may need to adjust the price on the calendar. If the number of reservations decreases, try searching for the problem and solve it.
Basically, the owner should do the cleaning themselves and see if there are any problems with the room. Also, remember that “adding an extra thoughtfulsomething” somewhere you cannot see will lead to a higher evaluation.
Be especially careful about cleaning the bathtub. Since the bathtub and bathroom are in the same space, if hair gets stuck in the pipe, it gives off a bad smell and water will leak from the floor. Also, check whether the air conditioner is not deteriorating or dirty, as those that are can cause allergic reactions.
Those who can value human relationships, not money.
Irresponsible people. Those who don’t have manners. Those who try to manage one room with two people to avoid risk (this business will not necessarily make money).
As in all businesses, people who succeed can put themselves in “others’ shoes.” The more you can come up with suggestions like “doing this would be better,” the better service you can provide. (For example: the pillow is too flat, the mattress is too hard and my back hurts, there is a sound every time I turn over in my sleep, there are not enough supplies, etc.)
Finally, I would like to tell you things that I can only tell as someone who experienced minpaku. It was two years ago. It began when I started living with an acquaintance in a shared house. After studying abroad, my aim was to make English conversation a habit. Speaking in English with a Japanese person was a bit unnatural, and I felt that I must change the environment and people in order to flip the switch in my brain. By inviting foreign tourists using Airbnb, which I actually used when I lived overseas, every day was exciting and fun!
However, something triggered me to decide to give up minpaku management. That is, I received a letter from the health center saying, “Recently, I received a report saying that foreigners have been coming in and out.” At that time, because of my lack of knowledge, I was violating the Hotel Business Law without even knowing the word “minpaku.” For the first time, I realized my ignorance and powerlessness.
“I didn't have a TV, and I even have to get a cell phone signal by going outside. I didn't have all the information. I am very sorry,” I apologized. Then, the person from the health center kindly said, “Fortunately, there have been no complaints. But I mentioned it to you because there have been more stories on TV about the minpaku problem, and so someone was worried that you might be getting involved in a crime without knowing it.” At that time, I was so happy that someone had worried about me when I was only thinking about my own profit and not thinking enough about others around me.
After this experience, I came to think that it would be great if I could create a forum for everyone—from people at health centers to residents to those who are thinking about officially starting minpaku—to talk together.
If there is anyone who can think of other good ideas, including those who are experienced with minpaku, please feel free to contact me.
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