TT-982 (Tourism Edition) -- Vacation Rentals Update for Japan - Maybe Airbnb Should Buy a Ship?

Japan Travel
* * * * * * * * TERRIE'S (TOURISM) TAKE - BY TERRIE LLOYD * * * * * *
A bi-weekly focused look at the tourism sector in Japan, by Terrie
Lloyd, a long-term technology and media entrepreneur living in Japan.

Tourism Sector Edition Sunday, Mar 03, 2019, Issue No. 982

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+++ Vacation Rentals Update for Japan - Maybe Airbnb Should Buy a Ship?

Since a blaze of publicity following the effective banning of publicly
hosted home sharing services (aka vacation rentals) to foreign
tourists last June (2018), I have seen very little in the news about
Airbnb and the rest of the industry. Until last week that is, when
suddenly the Nikkei ran an article declaring that Airbnb has clawed
"its way back in Japan following the 2018 listings collapse". The
article reads like an Airbnb PR department advertisement and takes at
face value Airbnb's claim that it now has 41,000 listings in Japan,
70% of the volume it had before the rules changed. While most of us
are too lazy to actually check whether Airbnb is being honest about
their recovery, I thought I'd go and take a look at their most recent
listings and count them.

The reality is that within Tokyo, previously a location with almost
20,000 private listings and certainly the biggest destination for
Airbnb users in Japan, I could barely find 200 listings that could be
considered private listings - i.e., those places where you get to stay
with the owner and make friends with them, getting their personal
advice about cool places to eat, see, and do stuff. You know, the main
reason people use Airbnb in the first place... Instead, among the
sparse 306 so-called "home type" listings that I could find for ALL OF
TOKYO, many were commercially run share houses, hostels, and

Fair enough that Airbnb is moving with the times and adapting by
securing whatever rooms it can, but the fact is that what they have
now in Japan is just a pale shadow of the rich human tapestry they
were creating in 2017.

I believe that Airbnb users know this, and although the company is
saying that 2018 was an adjustment year (room bookings were down 14%
on 2017 for the whole of Japan), implying that 2019 will be much
better, the Nikkei article says that the occupancy rate is still
0.5%-7% down in the period July 2018 to January 2019 versus the same
period a year earlier. Hmmm, only 7%? I think that with a fall from
20,000 private properties to just 200, and with the head-on-head
competition from and other competitors, probably Airbnb's
real occupancy number is around 50% less than it was. Maybe worse.

Although there is no way to actually know Airbnb's actual numbers, the
Nikkei used a local data analytics service called Metro Engines to get
that 7% number.

[Article continues below...]

------ Terrie's Slow-Poke Cycling Tour - Kyushu -------

Last year we threatened to run a cycling tour for readers, but got too
busy to actually do it. So this year we're making amends. The first
tour, which will happen in the third or fourth week of April (just
before Golden Week) will be a 5-6 day ride in Kyushu - most likely in
the Nagasaki region. This tour, and a Hokkaido tour in late August or
early September, will have a common format.

1. The tours are potluck, not professionally run. No complaining.
Jokes and helping each other out are mandatory.
2. There will be no support cars or spare bikes or guides. Instead, we
use Google maps and take the most scenic routes to arrive at our
hotels each night.
3. Our bags will be relayed by couriers so you can ride light. Yes, we
will have inner tubes and other basic spare parts.
4. Terrie is a slow poke, so while we will indeed be covering
80km-100km a day, it will take 6+ hours each day, with plenty of
time for lunch, photos, drinks, etc.
5. No hill climbing! Terrie is allergic to tall mountains.
6. Although the rides will run 5-6 days, people wanting to cut out at
3 days will be able to do so.
7. Our bikes will go with us on the Shinkansen. Terrie can show you
how to prepare and break your's down for simple transport.
8. If you don't have a road bike, you can rent one at [Excellent supplier, great prices.]
9. Anyone over 16, any gender, welcome.
10. There will be a JPY20,000 organizing fee per rider.
11. Other costs will all be at cost. Usually this works out to about
JPY13,000/day plus Shinkansen tickets.

If you're interested in a long, slow, fun, potluck cycling tour in
Japan, contact Terrie today and he will work with you and the rest of
the group to set the final dates and routes.

For more information, email:
[...Article continues]

Yeah, so how did they do that? This is where the Nikkei's "stretch"
reporting irritates me. I don't see anywhere on the Metro Engines site
a method for them to have a direct data connection with Airbnb.
Instead they appear to be getting their data from site controllers
like Temairazu and TL-Lincoln, which means the data is coming from
hoteliers who actually use these controllers. Certainly private
renters would never use this multi-channel booking software. So the
number that Nikkei is quoting is only giving the commercial side of
Airbnb's business. That minus 7% has nothing to do with Airbnb's
massive loss of private inventory.

I think that the reality is that every year will continue to be a down
year for Airbnb in Japan until it gets its mojo back. And when will
that be? Not until it can reinstate in some fashion its original
business model. What made Airbnb sparkle was the personal contacts and
spontaneity. These values have pretty much disappeared from the
business. As for the Nikkei article, I suspect it was either paid for
or is a sloppy space filler created from "drive by" journalism, where
a press conference by a visiting policy head has served as the "fact"

Bottom line: don't believe everything you read in the Nikkei.

Then of course there is the tsunami of competition that has hit Japan
in the last 12 months. From other shared accommodation providers, to
hotel chains building downmarket offerings, to large Airbnb vacation
rentals owners now converting to minshuku or hotel licences, and even
ship hotels.

There are now at least 8 major websites competing with Airbnb who are
officially in Japan. The biggest of these are China's Tujia and
Zizaike, Home Away, Agoda, Hyakusenrenma, Rakuten Lifull, and others.
Add to this the numerous "grey" listing sites which have high visitor
traffic overseas but no legal representation in Japan and thus no fear
of government retribution. For example, VRBO has almost as many Tokyo
private vacation rental listings as Airbnb Japan does (a tad under
300). Flipkey and others have hundreds more.

On top of the share accommodation marketplaces, we also have
significant hotel building activity across the board, from JPY2,000
per night hostels to palaces with JPY1,500,000 suites. According to a
CBRE Japan report, in the 4 years from 2016 to 2020 there will have
been an incredible 38% increase in the number of hotel rooms across
the nation's eight largest cities (including Tokyo, Osaka, and Kyoto),
for a total of 330,000 rooms. The report reckons that Tokyo will still
be slightly short of rooms while the other cities will be comfortable
or in surplus. So, outside of the Olympics, we may in fact be looking
at a hotel room glut in two year's time. Not that this should worry
Airbnb too much, since their model is to not own anything made of
bricks or mortar. [CBRE 2020 report. This is a quick read.]

The ship hotels thing is interesting. After it became clear that the
government was going to allow the Airbnb model to be killed off, JTB
scrambled in June last year to rent a huge ship, the Sun Princess,
which now has the right to dock in Yokohama, presumably for the Rugby
World Cup then perhaps for the 2020 Olympics later. The ship has 1,011
rooms that are expected to be priced between JPY70,000 and JPY600,000
- a steal compared to the hotel prices that have been jacked up 300%
on shore. JTB is being joined by Swiss-based MSC, which is going to
put a hotel ship in Tokyo Bay, near the Games village. That ship, the
MSC Lirica, apparently has 992 rooms. Ironically the Olympics were the
main reason that Abe's Cabinet Office supported the Airbnb model back
in 2014, but now that their position has caved so badly their focus is
on quick and dirty solutions to ramp up the supply of rooms.

The Mizuho Research Institute reckons there will be a 14,000-room
shortage for the Olympics, so the government is removing bunch of
regulatory controls over ship cabins. For example, those rooms with no
natural lighting (any cabin in the center of the ship - of which there
are plenty) will be temporarily allowed for local occupancy.
Furthermore, immigration procedures governing crew members will be
modified to allow crew to disembark on a regular basis. The plans for
these ship hotels are on a grand scale, with five ports along the
Kanto coastline being opened up. The furthest location will be Chiba.
While this is a pragmatic approach to the accommodation pinch it will
also make traffic a nightmare for 6-8 weeks. If you have friends
considering a ship cabin as an alternative, especially out in Chiba,
you might want to tell them to think twice about it.

...The information janitors/

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