Terrie's Take 947 (Tourism Edition) - What Comes After Airbnb Listings Fall 90%?

Terrie's Take terrie at mailman.japaninc.com
Mon Jun 4 07:57:38 JST 2018

* * * * * * * * TERRIE'S (TOURISM) TAKE - BY TERRIE LLOYD * * * * * *
A bi-weekly focused look at the tourism sector in Japan, by Terrie 
Lloyd, a long-term technology and media entrepreneur living in Japan.

Tourism Sector Edition Sunday, June 03, 2018, Issue No. 947

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+++ What Comes After Airbnb Listings Fall 90%?

With the new Airbnb laws coming into effect this month (June 15th), it's 
a safe bet that we are going to see some substantial changes in the 
share accommodation ("Minpaku") sector. An Airbnb competitor told me 
that they think Airbnb will lose up to 90% of its listings in Tokyo, and 
that in a perverse sort of way, it levels the playing field for the 
other industry players. I'm not sure how, if Airbnb's hosts are being 
strangled by short-sighted local regulations, that helps the 
competition. Surely they will be similarly impacted? Anyway, they seem 
happy about the turn of events.

But we don't expect the Minpaku sector to be stalled for long. Now that 
Japanese hosts have had a taste of the relatively easy profits of 
Minpaku through Airbnb, you can be sure that there are a lot of clever 
and motivated entrepreneurs trying to figure out a way to capitalize on 
the situation. Among the more mundane ideas I've heard, are for larger 
Airbnb hosts (those with 5+ properties), to simply go whole hog, buy a 
single, independent building, and register it as a minshuku 
(bed-and-breakfast guest house) or even as a hotel. Yes, this requires 
fire alarm/extinguisher systems, extra plumbing, and other 
modifications, but it's certainly one way to safely stay listed on Airbnb.

Another trending idea is for hosts to list their properties as monthly 
stays only, and see if people are willing to pay the prices being 
offered for a one-month apartment. If you go on to Airbnb, this 
phenomenon has become very obvious over the last 4 weeks. What if a 
client only wants 2 nights? It is conceivable that hosts will simply 
re-list their one-month-minimum apartment over and over, as guests check 
in/out for shorter times. In theory, Airbnb is supposed to monitor and 
remove such postings, but whether they will actually do so won't become 
clear for another few weeks.

Hostels are yet another alternative, being subject to similar 
regulations to minshuku and a little more relaxed than hotels. Then 
there are love hotels. It's remarkable how much of an increase there has 
been in these alternative providers, as is evident on the Booking.com 
site, now that the traditional room sharing host base is being slashed 
so dramatically.

[Continued below...]

-------------------- SAKE NIGHT 2018 ----------------------

Hosted by Canadian Rakugo-ka (comic storyteller) Sunshine Katsura, the 
first-ever foreign professional performer of Kamigata Rakugo, "SAKE 
NIGHT 2018 from All Over Japan" will feature a chance to sample over 400 
different varieties of sake from across all of Japan's 47 prefectures. 
The event is by invitation only and limited to 200 attendees, so don't 
miss out on a chance to be one of the lucky few by registering before 
noon on Friday June 8. Please register via email or FAX (Attention: Niki 
Kaihara or Eri Arai). Registered attendees will be notified by email.

E-mail: events at metropolis.co.jp, FAX: 03-4588-2278
Date & Time: Friday, June 15, 2018, 7:00-9:30pm (Reception begins 6:30pm)
Location: Ikebukuro Sunshine City Bunka Kaikan Buld, 4th floor, 
Exhibition Hall B

Details: https://metropolisjapan.com/sake-night-2018/

Other forthcoming innovations in the sector will be interesting to see, 
such as Terahaku, which was publicized in the the Telegraph newspaper 
recently. "Terahaku" - a name derived from combining (O)Tera, meaning 
temple, with Haku, the counter for the number of nights a guest stays, 
will tie up with Airbnb and supply inventory to them. The new service is 
apparently taking advantage of new wording in the Minpaku rules which 
allows temples to provide accommodation on a commercial basis for the 
first time.

But I find this tie-up kind of confusing because Shukubo, or temple 
accommodation, is nothing new. In fact, staying 1-2 nights at a sacred 
spot like Mount Koya has been considered de rigeur for culturally aware 
travelers for years now. You can find a good example of an existing 
Shukubo site here:

http://bit.ly/2st1l7H [Shukubo booking website]

What the new Terahaku service does bring to the table is a single 
database and a user application that allows customers the convenience of 
booking on the fly and paying at the same time - in other words, much 
the same experience that they would get on Airbnb. More interesting to 
us is the fact that the Terahaku guys were able to convince Airbnb 
Japan, a company that hates to collaborate, to open up its ecosystem to 
the new inventory. This pretty much tells us what kind of pressure 
Airbnb is under at the moment. The question is: whether Airbnb will 
continue to be open to deals with other niche groups in order to 
replenish its inventory or not? Given the current situation, for a short 
window of time anyway, I believe they will.

There are about 77,000 temples registered around Japan, and Terahaku has 
already managed to recruit 100 of them to sign up. According to them, 
they have set a target of 1,000 sign-ups over the next 3 years.

What other Minpaku workarounds are likely to arise?

The most obvious one that I can think of is for hosts to leave Airbnb 
and join an overseas site that has no legal presence in Japan. Something 
like Wimdu.com. Other possible sites include: Tripping.com, VRBO.com, 
PerfectPlaces.com, 9flats.com, OneFineStay.com, VacationRentals.com, and 
FlipKey.com. I find it ironic that Expedia's HomeAway.com currently has 
more registered rooms to stay in Tokyo than Airbnb does. I have heard, 
however, that Homeaway.com wants to be legal in Japan, so would not be 
surprised if it kowtows to the new regulations to stay on the good side 
of the local authorities.

Perhaps more likely, given that we shouldn't assume a static business 
environment, I think some enterprising person will set up an off-shore 
site and provide the same functionality that Airbnb does, but without 
the local residency legal exposure. The Japanese authorities have in the 
past shown their inability to legally pursue foreign operators who 
insist on showing Japanese-language content. As an embarrassing example, 
just look at the case of 2channel.net, now called 5ch.com, the 
rumor-mongering, drug-dealing, dark web site. Although its 
management/beneficial owners moved to Singapore to escape a slew of drug 
accessory and tax claims by the Japanese government, the site is still 
viewed by hundreds of thousands of Japanese web users per day. In case 
you're interested, 5ch.com has now moved to the Philippines.

Lastly, not all hosts were motivated by money. So possibly some of them 
will join a different type of network, where they are not receiving 
monetary compensation, like https://www.homeexchange.com, for example, 
which focuses on straight out home exchanges.

This of course raises the thorny issue of how unregistered Minpaku hosts 
will be policed - specifically, how will they be detected and 
confronted? The main force for the restrictive local regulations so far 
have been bodies corporate and local neighborhood associations - both of 
which are mostly composed of nosey old people with too much time on 
their hands. Will they be dobbing in homes that they think will be 
hosting guests and which are not registered? It seems they are intended 
for this role by virtue of the fact that registered Minpaku homes are 
supposed to carry a sign out the front of their properties. No sign = 
report suspicious activity.

OK, but what if the home owner is like my family? Where we have friends 
and our kid's friends coming in at least a couple of times a month. 
These people don't pay us, but they sure do look like Airbnb guests when 
they roll up with their suitcases from the flight from Sydney or 
wherever. I'm expecting we will be visited by the police, checking that 
we are not doing Airbnb as unregistered hosts, and that's an intrusion 
on our privacy that borders on being a witch hunt. It's not right, and 
it's the point at which private citizens will be wanting to push back at 
these new restrictions.

At the end of the day, the best outcome for everyone except the hotels 
industry would be for the Cabinet Office to work up a bit of backbone 
and stick to something they said in 2014. They said that they would 
ensure that home sharing as a concept would be allowed to come into 
being, and that they were setting national legislation to ensure that it 
is permitted. So even back then they knew they would have to push the 
envelope. Instead, the Abe government has allowed local authorities to 
strangle Minpaku at birth because the locals don't like the idea of 
foreigners running around their suburbs.

We shouldn't expect the government to take any action within the next 6 
months, due to ongoing favoritism scandals involving PM Abe. Still, if 
Airbnb are smart, and given that they have some serious lobbying 
firepower, we expect that they will try to press the Abe government to 
back up its legislation by warning off the local authorities. The 
central government has plenty of power to do this, despite their recent 
statements to the contrary.

...The information janitors/


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...The information janitors/



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