Terrie's Take: Airbnb in Japan, Kinky University, Dementia, and a New Holiday!

Terrie's Take - AkihabaraNews.com

Terrie’s Take is a selection of Japan-centric news collected and collated by long-time resident and media business professional Terrie Lloyd. AkihabaraNews is pleased to present Terrie’s learned perspective; we all could use another take on the news - here’s Terrie’s:

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Terrie’s Take on May 26, 2014

Feature:

  • Another Direction for Airbnb Style Accommodation

Briefs:

  • Another national holiday from 2016
  • From Kinky to Kindai
  • Yahoo cancels eAccess deal
  • Design a t-shirt on your smart phone
  • Dementia cases soar

In Terrie's Take 754, April 27, we speculated about whether Airbnb's room sharing service would be legal in Japan. We covered the fact that tenants sub-letting apartments is illegal in other locations in Asia (Singapore for example) and that the Japanese authorities would be watching the trend carefully here. While we don't imagine the authorities read our newsletter (maybe they do), almost on cue, a news report appeared on NHK March 16 about a 28-year old UK citizen who was arrested in Tokyo for running a share house, Airbnb style. Thanks to the reader with sharp eyes who saw the news item, which never appeared in the English-language press.

According to the NHK report, cached here (http://bit.ly/1p6TpBV) because the father of the person charged appears to have convinced NHK to remove the original news page, the police collared the renter after he ignored multiple requests to stop sub-letting the premises. Apparently his Adachi Ward neighbors complained of "strange people" staying at the building, previously a vacant butcher's shop and live-in house, and that it was the source of noisy roof-top parties in summer. Hmmm, these sound like typical complaints for any building occupied by young party-minded foreigners in Japan -- of which we will have many in 2020... :-).

Since the arrest there has been no further news or commentary, so we presume that he was released with a fine and a promise to reform. But it is evident from this event that even if he had permission from the owner to sub-let the house, there is still plenty of scope for the police to act if they don't like a particular situation. In this case they nailed the guy on charges of operating an unauthorized inn. Presumably this technicality was either based on the fact that he wasn't complying with the various regulations normally applying to an inn, such as access, facilities, security, fire hazard compliance, etc., OR, maybe it was simply that he didn't have a licence to operate an inn.

This arrest comes at an interesting time in the traveler accommodation sector, because Tokyo, and probably Japan in general, is about to undertake a massive rebuilding program for its hotels inventory. Just Friday, the Okura Hotel announced that it will be closing and demolishing its main hotel wing in Kamiyacho, first opened in 1962, to build a JPY100bn tower in its place. The new building is expected to be ready in 2019, just before the Olympics. We expect that the Okura announcement is the first of many, and you can be sure that the authorities are going to be watching the supply and demand situation carefully, ensuring that commercial operators are amply protected from the low-flyers.

That said, this doesn't mean there isn't a future for share house accommodation for travelers in Japan. Instead, we think that Airbnb-type operators will be kept guessing about the legality of their situation and instead other solutions will be introduced to create a "middle way" for economy-minded tourists. Currently one of the biggest problems with Airbnb is that many hosts on their site in Japan do not appear to be the legitimate owners of properties they are advertising. Although Airbnb's terms clearly say that the hosts need to be in compliance with the contracts they have signed with premises owners, many hosts appear to ignore this requirement and are offering accommodation anyway. Indeed, if they didn't do so, then most likely there would be very few rooms available, since we have never seen a home rental agreement which allows sub-letting. (OK, no doubt sub-letting agreements exist, but they are rare.)

The solution to unauthorized short-term tenancies is to ensure that the suppliers of Japan-based house/room sharing are the owners directly OR companies which can convince the owners that they can manage the property better. Given that the nation has 7.6m vacant homes and apartments, although many are dilapidated, we expect that some heavy hitter agency companies will get involved in this potentially massive sector. The presence of these local competitors will be to the detriment of web-only players like Airbnb, but you never know, maybe Airbnb will wind up cutting a deal with one of them -- although it would be out of keeping with the company's business model.

Yesterday, for example, major rental housing information provider Able Inc., which publishes the Chintai magazine among other things, announced that from October it will start offering vacant rooms to foreign visitors on the behalf of owners. Apparently Able plans to use new rules that will apply to the Special Economic Zones (SEZs) being introduced by the Abe government, to get around the regulations that would normally prevent them from offering such a service. Since one of the SEZs is going to include a big chunk of Tokyo, they should enjoy strong demand and supply. We can see other rental suppliers jumping on the bandwagon over the next couple of years.

None of the above events means that Airbnb is doomed in Japan. The country will definitely need more accommodation before the Olympics come around, and room sharing is going to be one of the solutions. However, it looks like the sector is going to be governed by legal uncertainty, the limited availability of usable owner-offered versus tenant-offered premises, and the low tolerance level of elderly neighbors -- so Airbnb will have its work cut out.

Another national holiday from 2016
As if Japan doesn't have enough public holidays already, the government has decided that from August 11, 2016, we will have another -- to be called Mountain Day. The new holiday will supposedly encourage the masses to leave the comfort of their homes and go climb one of the many mountains in the nation's interior. Too bad if it takes almost half a day to get to one... This will bring to a total of 16 national holidays that employers have to spring for, the most among developed nations. ***Ed: Still, although a mandatory day off, on the balance most Japanese employees don't take their regularly rostered amount of leave, so this is another way of getting them to do so. Still, instead of calling it Mountain Day, surely a more worthy candidate name would have been "Make a Kid" Day...?!** (Source: TT commentary from japantimes.co.jp, May 23, 2014)

From Kinky to Kindai
After decades of teasing by foreigners, the management of Kinki University has decided to clarify that they are not an organization for the education of the perverted, by renaming the school to Kindai, a contraction of Kinki and University. The name change came from a general push by faculty members who saw the Kinki moniker as causing the university to have a problem with international student recruitment, which will become particularly important once it starts its international studies program in 2016. (Source: TT commentary from theguardian.com, May 21, 2014)

Yahoo cancels eAccess deal
In a rare case of a Japanese company listening to its smaller shareholders and not just the largest one (in this case, Softbank), Yahoo Japan has backed off from its plan to buy out the eAccess mobile network from SoftBank. The deal, which would have cost Yahoo JPY324bn caused the company's stock price to plummet. Instead, Yahoo now plans to start a new business that will be delivered over the eAccess network. ***Ed: Actually, this latest adjustment could be an even worse deal for Yahoo, since it will change the flow of funds to the Softbank parent to an unlimited annual intra-company "tax", with even less oversight than was demonstrated in the initial capital-only M&A deal.** (Source: TT commentary from reuters.com, May 19, 2014)

Design a t-shirt on your smart phone
Uniqlo has introduced a cool new service that allows users to design their own t-shirts on their cell phones. The app comes with designs, a color palette, the ability to combine user photos, and even a "shake-to-mash-up" feature. Once created, the designs can be uploaded to the Uniqlo order site and the t-shirts are then available for purchase at JPY1,990 each. ***Ed: Very cool idea, that if coupled with courier delivery, could really take off.** (Source: TT commentary from mashable.com, May 20, 2014)

Dementia cases soar
According to an ABC report, about 5m people have dementia in Japan, and loss of memory is causing an epidemic of sufferers wandering off and getting lost or meeting a worse fate. Although there is a missing persons database in Japan already, only 10% of local authorities actually use it, and so the caretakers of dementia sufferers are now pushing for a new and more inclusive network to help their charges. In 2012 police reckoned that about 10,000 mostly elderly people with dementia went missing, a problem that is guaranteed to get worse with the general aging of the population. (Source: TT commentary from abc.net.au, May 23, 2014)

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That was Terrie's Take.

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