Some short-term hosts pivot to day-use office rentals

With inbound tourism essentially sitting at zero, some ‘minpaku’ or Airbnb-type accommodation operators are either closing up shop or pivoting into offering telework options in a last-ditch effort to stay afloat in a challenging market.

According to the Japan Tourism Agency, a total of 629 registered minpaku-operators filed notice for the cessation of business in the month of May. The total for June reached 703. As of July 2020, the total number of registered minpaku accommodations nationwide sits at 20,449. 

Up to 70% of guests in these Airbnb-type properties have typically been foreign tourists. But, with an entry ban covering 129 countries, these guests have vanished, causing great financial distress for hosts. 

Real estate company MDI manages 300 short-stay rooms in Tokyo’s Ota ward. Before the outbreak of the coronavirus pandemic, approximately 80% of their guests were foreign tourists. From April onwards almost all of their bookings were cancelled as the pandemic began to spread and travel restrictions kicked in. Recently they converted 14 of the 17 rooms in a short-stay building near Kamata Station into telework spaces. Beds were replaced with office desks, yoga mats and exercise balls. As a result, the company was able to secure 90 days worth of bookings in the new telework rooms.

There is, however, one large regulatory obstacle that makes this telework-conversion impossible for many hosts.  The short-stay minpaku-style system introduced in 2018 specifically does not allow day use rentals, and requires that the property is provided for accommodation purposes only. That means any other uses, such as for parties, or day-use offices, are not allowed. Daily, or hourly, use requires a full hotel license or for the property to be in one of the special minpaku districts. Hosts would need to jump through the various procedures to obtain the hotel licensing, and not all properties qualify. 

Sources:
NHK, July 15, 2020.
Airstair, June 1, 2020.

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