Airbnb creates $10M fund to cover cancelled reservations in Japan after regulatory shift
11 June, 2018, 04:24
The company determined to cancel any reservation made by a guest arriving "between June 15 and June 19 at a listing in Japan that does not now have a license", said Airbnb in a statement. "It's particularly disruptive for guests who have a trip to Japan planned for the weeks and months ahead", Airbnb said.
Airbnb has had to cancel a swathe of reservations in Japan, after a change in local laws required hosts to have specific licenses, but some have failed to get these ahead of the deadline set by regulators. The announcement affects bookings made before June 15. Modified past year to include people using private homes for tourist accommodation for up to 180 days/year, those hosting now have to register and display a license number alongside their listings.
Airbnb, which matches lodging hosts with travelers, called the decision a "surprise" and said the Japan Tourism Agency was unwilling to make "reasonable compromises" to protect visitors.
Airbnb, one of the home-sharing giants in the world, had 62,000 listings in Japan earlier this year, but as of May 11, the Japanese authorities had approved 152 of all 724 applications for home-sharing, according to the JTA. Data shared with the authorities will now include passport details and the dates of bookings.
Airbnb is also attempting to help guests find alternative Airbnb listings that are in compliance with the new law.
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".
Airbnb has said it would fully refund all cancelled reservations and will create a US$10 million fund to fund compensated customers. While previous laws had in theory affected Airbnb properties, they were only ever loosely applied.
Airbnb and other peer-to-peer rental sites have publicly welcomed the new law, saying it removes uncertainty in a sector that has long existed in a grey zone. 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.