Airbnb takes off in Japan, but the party is over for many seeking to ride the boom

posted on June 24, 2016

When Airbnb was in its infancy, not many people knew about home rental in Japan. Now that everyone wants to ride the boom, fewer hosts are making money.

Akasaka Real Estate's CEO Erik Oskamp reports Airbnb hosts in Tokyo - especially those who sublease - are either not making money or are losing it. "Hosts put in a lot of work and they're not making a dime," he says, noting that returns on Airbnb hosting are often no higher than on ordinary rentals.

When Airbnb was in its infancy, not many people knew about home rental in Japan. Now that everyone wants to ride the boom, fewer hosts are making money.

Akasaka Real Estate's CEO Erik Oskamp reports Airbnb hosts in Tokyo - especially those who sublease - are either not making money or are losing it. "Hosts put in a lot of work and they're not making a dime," he says, noting that returns on Airbnb hosting are often no higher than on ordinary rentals.

HouseCare founder Justin Clune also reports Airbnb hosts are finding profitability more elusive. While his Tokyo based next-day house cleaning online booking service soars along with Airbnb, HouseCare's hosting clients are taking longer to earn a return. Before, it took home owners two or three months to reach breakeven on their hosting investments. "Today it takes six months," he notes.

Airbnb grew by over 500% in Japan last year, causing the market to become fiercely competitive. Margins are squeezed as competition drives down the rates which hosts can charge. Real estate prices in central Tokyo also rose by 40 - 50% since Abenomics began 3.5 years ago, further pinching profits.

Hosts additionally face increased vigilance from apartment managers and doormen. In the past, building managers turned a blind eye to Airbnb guests. That is no longer the case. Once two or three Airbnb hosts move into the same apartment building, neighbors become alarmed by the sight of backpackers entering and leaving. Noise is the lead complaint. But all it takes is one guest who fails to separate the trash or fails to take it out on the correct day to disturb neighbors, says Clune.




source by japantoday
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