TT-757 -- Another Direction for Airbnb Style Accommodation. E-biz news from Japan

* * * * * * * * TERRIE'S TAKE - BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term
technology and media entrepreneur living in Japan.
(http://www.terrielloyd.com)

General Edition Sunday, May 25, 2014, Issue No. 757

+++ INDEX

- What's New -- Another Direction for Airbnb Style Accommodation
- News -- From Kinky to Kindai
- Web Content/Tech Job Vacancies -- Senior PHP Developer
- Upcoming Events
- Corrections/Feedback -- Easy funding in Japan
- Travel Picks -- Washi in Fukui, Beaches in Fukuoka
- News Credits

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+++ WHAT'S NEW

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.

[Continued below...]

------------ Japan Travel Seed Round Fundraise ------------

www.japantravel.com has become the largest content creator for inbound
travel content in Japan and the second largest for traffic. The Japan
Travel KK company now about to start its first outside round of
funding and invites expressions of interest from qualified early-stage
investors. Per Japanese law, Japan Travel KK will only accept the
first 50 applications and will contact each potential investor
individually to discuss the opportunity further.

Interested parties should contact: terrie@japantravel.com
-----------------------------------------------------------

[...Article continues]

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.

...The information janitors/

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

----------------- Tour Operator in Japan? -----------------

www.japantravel.com is now Japan's largest inbound travel portal by
content volume and second largest for traffic, and continues to grow
rapidly. The company is now soliciting interest from travel operators
around Japan who would like to become charter members of our new
tours-and-travel-experiences marketplace, due to open soon. Unlike our
existing advertising-based media offerings, companies in the
marketplace will do business with the Japantravel.com portal on a
commission basis. Preference will be given to those operators able to
create unique and visually attractive travel experiences to our
250,000+ unique visitors a month.

For more information, contact info@japantravel.com.

www.japantravel.com
-----------------------------------------------------------

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

+++ NEWS

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

=> 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)

http://bit.ly/1poie9L

=> 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)

http://bit.ly/1jjd2Ph

=> 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)

http://reut.rs/1ohUZ3T

=> 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)

http://on.mash.to/1jjcpFn

=> 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)

http://ab.co/1tAURMM

NOTE: Broken links
Some online news sources remove their articles after just a few days
of posting them, thus breaking our links -- we apologize for the
inconvenience.

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

+++ WEB CONTENT/TECH VACANCIES

=> Are you in web content, sales, or engineering- If so, this section
is for you.

** HIGHLIGHTED POSITION

- Senior PHP Zend Software Engineer

If you have more than 5 years professional experience developing web
and mobile applications and know PHP Zend to an advanced level, then
we are interested in talking to you. MetroWorks seeks a senior
developer or someone with advanced development and conceptual skills,
to work on its Tokyo team. We will accept suitable applicants from any
location and provide visa and moving assistance if required.
MetroWorks is delivering crowdsourced applications to web portal
partners in a number of sectors, and as this business expands we need
skilled developers to assist in creating new tools and functionality
on our core ACQ platform. Salary will depend on experience, but will
be competitive with other development shops in Japan. Friendly team
and working environment, based in the center of Roppongi, Tokyo.
Please send your resume to jobs@metroworks.co.jp.

** OTHER MEDIA POSITIONS VACANT

- Bilingual account manager for major tourism portal
(www.japantourist.jp), JPY3M - JPY5M
- Bilingual sales trainee for web media properties, JPY2.5M-JPY3M +
10% commission

Interested individuals may e-mail resumes to: jobs@metroworks.co.jp.

-----------------------------------------------------------

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

+++ UPCOMING EVENTS/ANNOUNCEMENTS

------------------ ICA Event - June 19th ------------------

Speaker: Jason Hurst, Representative Director, Tokyo Japan,
International Solution Group
Title: "CONGRATULATIONS! 2013 Japanese Taxes are finished, we made it!"

Details: Complete event details at http://www.icajapan.jp/

Date: Thursday, June 19th, 2014
Time: 6:30 Doors open, Buffet Dinner included and cash bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No
sign ups at the door!!!!!!!
RSVP: By 4pm on Friday 13th June 2014
Venue is The Foreign Correspondents' Club of Japan

http://www.fccj.or.jp/about/access.html
-----------------------------------------------------------

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

+++ CORRECTIONS/FEEDBACK

=> In TT-756 we covered some of the ways that it is getting easier for
foreign entrepreneurs to set up and do business in Japan. One of our
readers picked up on the funding comments and had some valuable
first-hand observations to make.

*** Reading, as usual, your Take this week, I wonder what you mean by
the comment, "We suppose that the ready availability of bank and
government guaranteed debt does cover the gap partially, so it's not
all bad news." Debt funding is certainly available, but so are
subsidies. I do not know about nationwide, but we are just winding
down a grant of JPY10m, with 30% covered by our side. There was also
another subsidy available for JPY3m, with the same 30% self-payment.
There were nearly 20 entrepreneurs who were accepted in the 2013-2014
term from Mitaka city alone.

Our subsidy covers any foreign-spent component, such as IT developers,
airfare, etc. Of course the paperwork is a pain, but I just turn that
over to an outsourced accountant to do the math and a student to write
the reports, so it manageable. We are now debugging our
proof-of-concept IT solution, with the patent application done, and
are turning our attention to the sales side.

I should also note that that the government is actively supporting
these subsidies. How? The government provides a promissory note to the
local bank; the bank then lends the full amount of the grant package
(2/3 + 1/3), plus some additional amount, to the grantee at a low
interest. We paid 1.1% for 3 years. At the end of the first year and
upon approval of the submitted receipts by the grants administrator,
the government pays its 2/3 portion to the bank. The grant receiver is
then given the option to either pay off the loan or use the 2/3
portion as a new cash infusion into the business, with the remaining 2
years of the loan to be repaid at the original interest.

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

+++ TRAVEL DESTINATIONS PICKS

=> Experiencing Echizen Washi Paper
Spending a day in washi culture

The city of Echizen in Fukui Prefecture is home to some of Japan's
best cultural icons, and washi papermaking is one of them. Your first
destination should be the Echizen Paper Culture Museum. Entering
through its doors, one is greeted by the sight of a paper structure of
307 paper cranes, apparently made out of just a single giant piece of
hemp washi measuring 2 x 2.7 meters. Pretty impressive stuff.

Walking around, one is able to explore the history of washi paper, its
origins, the legendary masters who inherited previous generations'
traditional techniques of washi-making, and the signature types of
washi paper each master created. Walking into the back room unveils a
huge gallery where a thousand different pieces of washi are suspended
in the air, their different colours providing ample resonance to the
gallery aesthetic. There is also the largest piece of handmade paper
in the world on display, measuring 4.3 x 7.1 meters, and also some
beautiful paper lantern structures that would make any other attempt
at origami seem amateur at best.

http://bit.ly/1njUODd

=> Shingu Beach
Vast sandy stretch on the edge of Fukuoka City

When you ask Fukuokans about which is their top beach, Shingu Beach is
consistently in the running. Still in a populated and accessible
region, but less developed than Momochi Beach, with its shopping,
dining, and surrounding towers and stadiums, Shingu Beach has a lot to
offer. The stretch of sand is long and particularly wide, the
surroundings are more natural than urban, it has a large parking lot
right on location as well as a nearby train station, and it has
Shingu-ya -- a fantastic beach house.

Unlike other narrow beaches, the sand here is a couple of kilometers
long and about 50 meters wide in front of the beach house. Although
the sand could be cleaned of debris more often, most of it is
conveniently flat and ball sports are not restricted. Neither are
tents, barbecues, and other things that are barred from beaches in
most residential areas. The sheer size of the place gives you the
freedom to enjoy the beach without worrying about the folks next to
you.

http://bit.ly/1jM8YvI

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

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+++ ABOUT US

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Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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