print PRINT

ECONOMY

Rakuten to chase Airbnb with turnkey service for landlords

  • November 30, 2017
  • , Nikkei Asian Review , 6:56 a.m.
  • English Press

TOKYO — Rakuten will capitalize on the home-rental trend with a comprehensive support service for property owners, looking to distinguish itself from the more established Airbnb in a growing market set to emerge from a legal gray area.

 

The Rakuten Stay service announced Wednesday intends to serve as a one-stop shop for landlords looking to rent space to travelers, a practice known as minpaku in Japan. It will offer consulting on rates and property renovation, handle booking, restock toiletries and other essentials and even handle cleaning. Participating properties can be marketed under the Rakuten Stay brand.

 

The service will be handled by Rakuten Lifull Stay, a vacation-rental joint venture with real estate information website operator Lifull. Rakuten owns a majority in the venture.

 

“We can guarantee high quality that people expect from the Rakuten brand even with minpaku,” Rakuten Lifull Stay chief Munekatsu Ota told reporters.

 

Rakuten plans to launch an Airbnb-style marketplace in conjunction with legislation slated to take effect in June 2018 that will legalize home rentals nationwide. “We want to popularize legal, safe minpaku,” Ota said.

 

The company faces a formidable rival in Airbnb, which holds a substantial head start with 56,000 listings across Japan. But home rentals in Japan currently are limited to approved properties in deregulation-friendly strategic special zones and those licensed as simple lodgings under existing law — criteria that many Airbnb listings reportedly fail to meet.

 

Conversely, Japanese companies, well known for their risk-averse, highly compliant nature, have made little headway in the market. The minpaku legislation likely will finally encourage them to enter the arena, as it is expected to spark a crackdown on unlicensed properties, creating a more level playing field.

 

But catching up with Airbnb will remain a challenge, as Rakuten possesses far less name recognition among foreign tourists than its U.S.-based rival. The Japanese company looks to tackle this problem by teaming with China’s Tujia and HomeAway, a subsidiary of American travel company Expedia, to attract inbound visitors.

 

Rakuten sees the support service as the trump card for its marketplace. Individuals looking to start renting spare rooms face a forbidding array of hurdles, such as setting different rates based on demand and verifying visitors’ identities. Rakuten hopes that taking on some of this complex work will encourage more listings.

 

But this will place a heavy burden on the company in terms of time and labor costs. Operating and managing minpaku properties involves such a wide range of services that specialized businesses exist just to handle them.

Ota said he expects most of the profits in the minpaku business to come from the home-sharing marketplace itself. Rakuten seems to be betting that a boost to listings will make the support service — unlikely to be very profitable on its own — worthwhile.

 

Airbnb estimates its economic impact in Japan last year at 920 billion yen ($8.22 billion at current rates), up 80% from 2015. An increase in minpaku customers would benefit other Rakuten services such as travel booking and payment processing for small stores. The Japanese company is preparing to seize this valuable opportunity.

  • Ambassador
  • Ukraine
  • OPINION POLLS
  • COVID-19
  • Trending Japan