Airbnb cancels thousands of bookings in Japan after law change

ByTravelling For Business

June 8, 2018

Travelling to Japan in June? If you’ve made a booking with Airbnb, you may have to find alternative accommodation.

The online home-sharing giant has had to cancel thousands of reservations after Japan’s government put in place a new law around home-sharing.

The law regulates Airbnb’s most popular destination market in the Asia Pacific region.

Airbnb said changes to the guidance around its implementation meant reservations would now be affected.

Under the new law, hosts are required to register their listing and display their licence number by 15 June to remain active.

But the Japanese government said on 1 June that any host without a licence number had to cancel upcoming reservations that were booked before 15 June.

Airbnb said it would therefore cancel any reservation made by a guest arriving between 15 June and 19 June at a listing in Japan that does not currently have a licence.

We know this stinks – and that’s an understatement,” Airbnb said.

Japan is an incredible country to visit and we want to help our guests deal with this extraordinary disruption.”

Airbnb also said it had set up a $10m fund to help those incurring any additional expenses related to having to make alternative travel plans because of cancellations.

The booking issue in Japan is the latest hiccup that Airbnb has faced in Asia, one of its fastest growing markets.

Earlier this year, the firm said it would have to start sharing information about its customers who book accommodation in China with the government. Data shared with the authorities will now include passport details and the dates of bookings.

Hosts listing accommodation in China will also have their details passed on once they start accepting bookings.

The online home-sharing giant said the move meant it was now complying with local laws and regulations, “like all businesses operating in China”.

Airbnb has said it is aiming to have one billion annual guests worldwide by 2028.

The firm is one of Silicon Valley’s most valuable companies and is already worth an estimated $30bn.

Professor Pinar Ozcan, Professor of Strategic Management at Warwick Business School, who researches Airbnb and the sharing economy said: “This is further proof that the effective management of government regulations and public perceptions is no less important to firm performance than establishing demand in the marketplace.

“In a recent study, we compared the approaches of Uber and Airbnb to their local environment. We discovered that Uber’s hard-line approach (at least historically) to gain customers and put pressure on the country or city’s administration through sheer size and market demand works less well than Airbnb’s softer approach of investing in the local environment through, for example, giving fire-safety education to hosts or promoting local businesses in the area.

“However, our research shows one important caveat: as these sharing firms grow over time, other stakeholders, such as residents in areas of high Airbnb activity, may be affected negatively and increase pressure on the local or national government to regulate these firms more heavily.

“In Barcelona, over the past few months, Airbnb similarly had to remove 2,500 ads from its platform, half of them because they were illegal rentals, but the other half, because they were in the most tourist part of the city.

“Airbnb’s only choice is to co-operate with the local and national governments and make sure that all members on the platform abide by the rules in order not to lose access to that market completely. As sharing economy platforms grow, they disrupt existing industries, as we have seen in transportation, accommodation, and catering, and cause resistance from traditional incumbent producers whose resources they threaten.

“This puts governments and municipalities between a rock and a hard place. On the one hand, the sharing of unused resources and the additional employment that these services bring are good for the society. On the other hand, as we see in the case of Uber, it is not easy to draw the line between a sharing platform and a transportation company that operates more cheaply due to legal loopholes, such as being categorised as an information systems company and not having to pay taxi fees.

“As governments attempt to close these loopholes as quickly as possible to diffuse the pressure building from the affected parties, sharing platforms have no choice but to co-operate with them.”