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Uh-Oh, Airbnb Is Forced To Remove 80% Home Listings Under New Japan Law

A rental property in Japan by HomeAway. Source: HomeAway

Airbnb Inc. has frozen a major portion of its home listings and guest reservations in Japan at the command of new law, but promised to compensate travellers who find themselves stranded at the height of the summer tourist season.

In past months, hosts in Japan have received emails from Airbnb urging them to register with local authorities before June 15. The company even set up a website to guide its users through the process. However, on June 1, Japan’s tourism agency notified home-sharing services they must cancel reservations made with unregistered listings — a full two weeks before the deadline.

Airbnb has established a $10 million fund to cover the additional expenses of affected guests, and plans to offer full refunds and coupons worth the value of their booking. Why?

This movement intends to bring clarity to a legal grey area and level the playing field for hotels, as the rules limit private home stays to rent out spaces and require hosts to register with local governments. But local authorities have since piled on more restrictions and raised the hurdle for hosts trying to go legit.

The Shinjuku ward of central Tokyo, for example, prohibits lodging in residential areas on weekdays, while Kyoto limits stays in such locations to about 60 days between January and March for hosts without a special license.

Other cities around the world have also been implementing various measures in response to complaints from the hotel industry that see online platforms like Airbnb as a threat, as well as local residents in tourist hot spots that have seen long-term rental prices skyrocket as property owners remove rooms from the market and transfer them to the more profitable short-term rental market.

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