September 12, 2014 / 2:42 AM / 5 years ago

Rakuten considering Airbnb-like home rental service in Japan - sources

TOKYO (Reuters) - Rakuten Inc, Japan’s largest e-commerce company, has been actively considering launching a service like website Airbnb that would provide a hub to rent apartments and homes in Japan to short-term guests, two people with knowledge of the developing plans told Reuters.

A staff of Rakuten Cafe is seen under a logo of Rakuten Inc at a shopping district in Tokyo August 4, 2014. REUTERS/Yuya Shino

Rakuten has commissioned a detailed study in Japan of whether it could launch a short-term rental service that would be easier to use than Airbnb, according to the people, who asked not to be identified because the project was confidential.

If Rakuten decides to go ahead with the service, it may do so early next year, the people said. They did not have further details, and a Rakuten spokeswoman had no immediate comment.

An online home rental marketplace would help Rakuten profit from the relatively high number of vacant homes in Japan as well as a surge in the number of foreign visitors who are attracted by a weaker yen and easier visa procedures.

Last year, a record 11.25 million foreigners visited Japan, but their choice of accommodation was largely limited to luxury hotels, where room rates run as high as $800 a night, and spartan business hostels that cost around $90 a night.

At the same time, 13 percent of residential properties were left unoccupied last year, government data shows.

The government is trying to promote tourism as a way to boost the economy and has set a target of 20 million visitors a year by 2020, the year Tokyo hosts the Olympics.

But current regulations mean the serviced apartments popular with tourists in other destinations do not cater to anyone staying less than a month.

Renting out personal property to tourists is also fraught with legal dangers. A British man was arrested in May for leasing his flat to visitors without obtaining the right permits from the authorities, police said.

The government is expected to soon ease these laws, and that would help Rakuten benefit from the global phenomenon has turned San Francisco-based privately owned Airbnb into a company with a market value of $10 billion.

By comparison, Tokyo-listed Rakuten, which owns a wide range of assets including travel and shopping websites and a professional baseball team, has a market value of just over $16 billion.


Rakuten’s billionaire founder and chief executive Hiroshi Mikitani, 49, has lobbied to change Japanese regulations he believes stifle growth and protect vested interests. In 2013, he filed a lawsuit against the government to force it to change a law banning online sales of over-the-counter drugs.

The welter of laws protecting the lodging industry in Japan date back to the period just after World War Two. Laws governing hotels set strict limits on rooms offered for paid accommodation and requires operators to get permission from local regulators before renting rooms.

As part of Prime Minister Shinzo Abe’s economic growth strategy, the government has designated special zones, including areas of Tokyo and Osaka, where a range of regulations are set to be eased, including laws related to short-term lodging.

Supporting legislation is scheduled to be introduced to parliament in a special session later this year.

“Regulators just aren’t enforcing the law in every single case because it’s a new business model, and the law may be outdated,” said Hirohito Kaneko, a Tokyo lawyer who specializes in business law.

So far, Airbnb, which has almost 3,600 listings, is the only short-term rental online service operating in Japan, where enforcement of the short-term lodging laws is often spotty.

Internet company Hyakusenrenma is planning to set up its own short-term rental website, called Tomareru, later this year in partnership with real estate agency Able Inc [ACPRTB.UL].

Yahoo Japan, the country’s biggest Internet portal which is partly owned by telecoms giant SoftBank, stopped offering short-term rentals after local officials in Nagano prefecture raised legal concerns.

Editing by Kevin Krolicki and Miral Fahmy

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