Minpaku Law Japan Explained: Ryokan Business Law or New Minpaku Regulations

Are you wondering which rules to follow for your minpaku operation - the Ryokan Business Law or the New Minpaku Law? This article delves into which law applies to your planned minpaku, with an easy-to-understand deep dive into the Ryokan Business Law!

Both the Ryokan Business Law and the New Minpaku Law vary depending on the services and facilities you offer.

It Depends on the Location, Facility, and Service of Your Minpaku

When starting a minpaku (private lodging), the choice between the Ryokan Business Law and the New Minpaku Law depends on its location and the purpose of operation.

Operating under the Ryokan Business Law categorizes your minpaku as a "ryokan, hotel, or simple lodging," while following the New Minpaku Law categorizes it as "minpaku (renting out private residences)."

Both laws have standards for safety, hygiene, and consideration for neighbors, and require proper authorization for operation.

Main Content and Differences Between the Ryokan Business Law and the New Minpaku Law

Ryokan Business Law

This law establishes rules for accommodation facilities like hotels and ryokans.

It sets very strict standards to ensure guests stay in a safe and clean environment.

For example, facilities similar to a hotel front desk and emergency evacuation equipment for quick escape in case of fire are required. Also, the location of these hotels is restricted to specific areas, such as those with shops or factories.

New Minpaku Law

This is a new law established in 2018, designed to simplify the process of renting out ordinary homes to travelers for short periods.

When homeowners rent out their homes as "minpaku," they don't need to meet as strict standards as the Ryokan Business Law.

For instance, it's okay not to have a front desk, and the evacuation equipment can be more basic. The location is also more flexible, allowing operation in residential areas.

However, there is a "180-day rule," meaning you can only operate for 180 days in a year. For the remaining 185 days, you can consider operating as a monthly or weekly rental.

Determining the Best Law for Your Minpaku: Ryokan Business Law or New Minpaku Law

First, check the zoning area of the property you plan to use for your minpaku (more on zoning areas later).

If the zoning area is suitable for both the Ryokan Business Law and the New Minpaku Law, your choice will depend on several factors:

1. How much profit you aim to make (remember, the New Minpaku Law limits operation to 180 days per year).

2. How often you plan to use the property yourself (e.g., as a vacation home).

3. Your preference for avoiding complicated procedures and desire for a quick start.

Based on these priorities, you'll choose between the New Minpaku Law and the Ryokan Business Law.

For a local, community-focused minpaku, choose the New Minpaku Law. It's great for a genuine local experience.

If you're in a business district, industrial area, or resort, the Ryokan Business Law is better. It's stricter but ensures safety and cleanliness.

For trendy urban apartments, the New Minpaku Law is ideal. It's simple and suits a modern city vibe.

For luxurious villas in resorts with year-round rental, go with the Ryokan Business Law. It's perfect for continuous, upscale operations

Rules for Operating a Minpaku under the Ryokan Business Law in Japan

When operating a minpaku (Japanese-style lodging) under the Ryokan Business Law, it's crucial to understand the following key points:

• Zoning regulations

• Building usage

• Fire safety equipment

• Front desk and other facility requirements

• Permit acquisition process and procedures

Let's delve into these in detail.

Zoning Regulations

Zoning regulations determine what types of buildings and activities are allowed in a specific area. In "Residential Zones," which are typically quiet residential areas, operating under the Ryokan Business Law can be challenging.

However, in "Mixed Residential Zones" (areas with small-scale shops and offices besides residences) and commercial areas with many shops and businesses, it's feasible to establish accommodations in accordance with the Ryokan Business Law.

Under the New Minpaku Law, you can operate in almost any zone except industrial areas. But remember, some locations may require special permissions, so always check with your local municipality before starting.

Here's a quick reference chart for zoning regulations.

Reference Page: Land Use Planning | Ministry of Land, Infrastructure, Transport and Tourism (Japanese)

To check which zoning area applies to your minpaku location, you can also refer as following;

Reference Site: Land Use Area Map | MapExpert　（Japanese）

Attention for Establishing Lodging Facilities

When planning to establish a lodging facility, it's crucial to consider its proximity to schools and child welfare facilities.

If your property is located within approximately 100 meters of such institutions, there's a possibility that permission to operate may be denied due to potential environmental disturbances.

However, installing facilities that obstruct the view might increase the chances of obtaining permission. Since regulations vary by region, it's essential to confirm with the local municipality where the property is located.

Reference Page: Summary of Local Government Ordinances on Minpaku Operational Restrictions | Japan Tourism Agency, Ministry of Land, Infrastructure, Transport and Tourism (Japanese)

Notes▼

In some tourist areas, it's possible to operate minpaku under the Ryokan Business Law. For example, in the area around Lake Kawaguchi, there are extensive "Residential Areas" where permission under the Ryokan Business Law can be obtained.

Reference Page: Comprehensive Urban Planning Map | Fujikawaguchiko Town, Yamanashi Prefecture | Super Check Sheet

In contrast, in Exclusive Residential Areas (where the Ryokan Business Law is not applicable, but the New Minpaku Law is), such zoning is not as widespread. This indicates that the area planning takes into consideration not only housing but also the use of properties as lodging facilities.

Reference Site: Super Check Sheet | Revised in Reiwa Era (Japanese)

Constructioon Purpose: Ryokan or Hotel

When operating a minpaku under the Ryokan Business Law in Japan, the property must be classified as a "ryokan (Japanese inn) or hotel" according to the Building Standards Law.

However, if the property is less than 200 square meters, you may be able to start operating without going through complex procedures.

(Though, you must follow the zoning rules of the area where the property is located. This means ensuring that the property's use as a ryokan or hotel is permissible within the designated land use category of that area.)

Fire Safety Equipment

When operating a minpaku as a ryokan or hotel under Japan's Ryokan Business Law, the following fire safety equipment rules apply:

Additional points to consider when operating a ryokan or hotel:

• A "Fire Service Act Compliance Notification" is required to prove the building meets fire safety standards.

• New constructions are usually designed by architects to comply with fire safety requirements.

• Existing buildings repurposed for ryokan use may need renovations to meet legal requirements.

• Always confirm the building's compliance with fire safety laws before signing any contracts.

For minpaku operations under the New Minpaku Law, the rules are as follows:

For minpaku without the host present, the same fire safety measures as ryokan or hotels are necessary.

Installation of Facilities such as Front Desk

Traditionally, hotels and ryokans required a front desk for guest check-ins. However, a legal amendment in 2018 exempted small-scale lodging facilities from the obligation to have a front desk.

Innovative services utilizing smart check-in systems, AI facial recognition, video chat, and smart lock integration have emerged, enhancing guest convenience while addressing the issue of staff shortages for operators.

A leading example is "AirHost ONE" provided by AirHost.

By implementing "AirHost ONE," lodging facilities can offer guests a smooth check-in experience, address staffing issues, reduce operational costs, and improve service quality.

Explore more about here ▶　AirHost ONE

Licensed Minpaku Operation and Risks

Operating a licensed minpaku involves responsibility and risks. Let's delve into the legal environment and the necessary knowledge to avoid penalties.

Penalties for Operating Without a License

Operating a minpaku without a license can lead to hefty fines and legal troubles. The violations and penalties under the Ryokan Business Law are summarized in the table below:

Understanding these legal aspects is crucial for anyone considering entering the minpaku business to ensure compliance and avoid legal issues.

Source page：Business Operations 2" section of the Minpaku Private Lodging System Portal Site

To avoid penalties

To avoid penalties and comply with the law when operating a Minpaku (private lodging) in Japan, consider the following practical steps:

1. Consult with Local Authorities: Before starting, consult with your local public health center or other relevant agencies. This is important as there may be region-specific rules.

2. Submit Necessary Documents: Prepare and submit all required documents, such as proof of ownership, safety inspection reports, and insurance coverage.

3. Accept Inspections: Accept inspections from local authorities to ensure that your property meets health and safety standards.

4. Consider Professional Assistance: If managing the process is challenging, consider hiring a professional, such as an administrative scrivener. Once you obtain a permit under the Ryokan Business Law, a "Ryokan Business (Operating) Permit" will be issued.

Benefits of Operating Under the Ryokan Business Law

While the Ryokan Business Law has strict rules, there are numerous benefits to its operation:

• No limit on the number of operating days.

• Advantages in listing on Online Travel Agencies (OTAs).

• Credibility and brand strength.

• Easier collaboration and support from local communities, as well as national and municipal governments.

Let's see these points in detail.

No Limit on Operating Days

Being able to operate unrestricted throughout the year is a significant advantage. The absence of limits on operating days offers benefits such as:

• Open 365 Days: Opportunities for income regardless of the season.

• Increased Revenue: Full operation during both peak and off-peak seasons without restrictions.

• Strategic Flexibility: Ability to adapt promotions, pricing, and events flexibly.

• Customer Satisfaction: Being always open makes it easier to retain repeat customers.

• Stable Management: Reliable business planning, unaffected by market fluctuations.

With the permission under the Ryokan Business Law, you can welcome guests at any time. Aim for maximum revenue throughout the year!

Advantages on OTA Platforms

Some OTAs may only allow listings for ryokan properties. Additionally, obtaining permission under the Ryokan Business Law offers the following advantages:

• Expanded Target Audience: The more OTAs you can list on, the more travelers you can reach.

• Increased Competitiveness: Limited OTA listings reduce competition and increase visibility.

By obtaining permission under the Ryokan Business Law, you can gain a competitive edge in the OTA market.

Flexibility in Guest Capacity

Hotels and ryokans that comply with the Ryokan Business Law have the flexibility to accommodate as many guests as they have rooms. Additionally, they offer:

• Ideal for Families and Groups: Provide a comfortable stay for large families or group travelers, making for a memorable experience.

• Suitable for Events and Training Camps: Cater to the accommodation needs of large groups, such as sports teams or seminar attendees.

• Increased Profitability: Welcoming more guests increases revenue opportunities and business expansion.

However, for minpaku that comply with the Ryokan Business Law and the new Minpaku Law, there is a rule requiring a minimum floor area of 3.3 square meters per person.

This floor area includes bedrooms, bathrooms, toilets, washrooms, living rooms, and other areas accessible to guests.

Moreover, when operating a minpaku that accommodates more than 10 guests at a time, it's necessary to check with the local health office in advance regarding the property's size, the number of toilets, and the number of bathrooms.

For example, in Chiyoda Ward, Tokyo, for a capacity of 10 people, it is required to have three toilets (separated for males and females).

Trust and Brand Strength

Obtaining a license under the Ryokan Business Law not only serves as a mark of quality but also helps in gaining the trust of domestic travelers. Additionally, it brings several benefits:

• Enhanced Brand Value: The quality and reliability of the accommodation symbolize an increase in brand value.

• A Key Reason for Selection: Many guests prioritize safety and trust. A Ryokan Business Law license becomes a significant reason for their choice.

• Strengthened Word-of-Mouth: Positive reviews from satisfied guests can increase, attracting new guests and enhancing the establishment's reputation.

These are some of the advantages that can be gained by complying with the Ryokan Business Law.

Easier Collaboration and Support

Obtaining a license under the Ryokan Business Law also offers the following benefits:

• Synergy with Local Communities: Smooth collaboration with local governments.

• Access to Grants: Easier utilization of municipal grants and support programs, leading to more accessible financial assistance.

• Business Stabilization: Receiving support from the local community strengthens the business foundation, enabling stable operations.

• Contribution to the Local Economy: Cooperation with the community can contribute to the local economy, increasing the likelihood of building positive relationships.

Strengthening ties with local governments facilitates economic support, allowing for both business stability and contribution to the local community.

Wrap-up

While the Ryokan Business Law has many rules, it also offers significant benefits in maximizing the advantages of your lodging facility.

However, to fully leverage these benefits and lead your guesthouse business to success, specialized support is essential.

AirHost can assist with operations compliant with both the Ryokan Business Law and the New Minpaku Law.

Especially for operations based on the New Minpaku Law, we provide dedicated OTA support like Rakuten Vacation Stay and convenient features to comply with the 180-day rule.

Utilizing AirHost could enable you to efficiently manage your lodging while complying with the law and expanding your guesthouse business.

Feel free to contact us as your first step in the guesthouse business.

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