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Osamu Katayama Official Website

Katayama Report

Insight into the Japanese Economy,
Industry and Business

Showrooms at the Inn

Why has leading electronics manufacturer Panasonic entered the private lodging business? Katayama Osamu investigates.

 

The New Private Lodging Business Act regulating short-term stays at privately owned homes for a fee went into effect on June 15, 2018. Immediately however there was confusion, with an intermediary website deleting about 40,000 unreported private lodgings. One month after the act went into effect, only 5,000 minpaku properties had been registered with prefectural government offices.

The New Private Lodging Business Act set an upper limit of 180 business days on private rental accommodation houses excluding those in National Strategic Special Zones, such as Ota Ward in Tokyo, part of Osaka Prefecture and Kitakyushu City. Real estate properties in urban areas whose rents are high have difficulty being profitable, which prevents the number of registered properties from increasing. It is clear, however, that there is a shortage of accommodation facilities for achieving the government’s goal of attracting 40 million inbound tourists by 2020 and 60 million inbound tourists by 2030.

The media reported that Panasonic entered the private lodging business in June 2018. Many people may wonder why. What will Panasonic do?

Under Eco Solutions Company, one of the in-house companies of Panasonic, is Panasonic Homes Co., which deals with order housing, housing complexes, apartment houses and renovations. Panasonic made PanaHome a subsidiary in October 2017 and renamed it Panasonic Homes Co. in April 2018.

Panasonic Homes has engaged in the land utilization business for more than fifty years. Panasonic Homes proposes rental housing and housing with shops to land owners and contracts to build houses. In addition, Panasonic Homes has a scheme of building nursing care, medical and welfare facilities, such as housing for elderly people and child-rearing facilities, leasing them, outsourcing their management and paying rent to land owners.

Panasonic Homes applies this scheme to the private lodging business. Panasonic Homes builds private lodging facilities, rents them from the owners and outsources their management to Hyakusenrenma, Inc., and SQUEEZE, Inc. Panasonic Homes receives about 10% of the lodging fees. Panasonic Homes aims to receive an order of 5 billion yen for ten houses in Tokyo and Osaka in 2018.

Will this project be profitable? In fact, the private lodging business that Panasonic Homes deals with does not have the upper limit of 180 business days.

The revised Hotel Business Act, which was enforced at the same time as the New Private Lodging Business Act, integrated the types of businesses that had been classified into inn management and hotel management into inn and hotel management. Deregulation also enabled inns and hotels to be run from a room with no need to provide a reception desk, and with identification by IT.

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