TT-947 (Tourism Edition) -- What Comes After Airbnb Listings Fall 90%?

* * * * * * * * 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.
(http://www.terrielloyd.com)

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@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/

***------------------------****-------------------------***

------------ Swim with Dolphins near Tokyo ----------------

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...The information janitors/

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