Airbnb has been one of the breakthrough stories in the wave of shared-economy startups that have emerged out of Silicon Valley, with a valuation of $30 billion for its travelers platform that lets people book private homes as accommodations, as well as other services. Even so, it is not immune to the force of regulation and the impact it can have on its business.
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.
It is unclear how many people or hosts have been impacted — the numbers are shifting as hosts receive their licenses — but Airbnb says that it has set up a fund of $10 million to cover any affected travelers. Some have estimated that as much as 80 percent of bookings have been impacted by the changes.
As Airbnb notes, the cancellations and its resulting moves are a result of changes to the country’s Japanese Hotels and Inns Act. Modified last 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. The tourism authority (JTA) had set a deadline of June 15 to do this, and those who hadn’t received a license by June 1 had to cancel reservations booked before June 15, and Airbnb has extended this to cover the gap of other travelers so that they have time to make alternative arrangements:
“Any reservation scheduled for guest arrival between June 15 and June 19 at a listing in Japan that does not currently have a license has been cancelled,” Airbnb writes. “Going forward, unless the government reverses its position, we will automatically cancel and fully refund any reservations at listings in Japan that have not been licensed within 10 days of guest arrival.”
The $10 million fund, Airbnb said, will cover “additional expenses for guests who are scheduled to travel to Japan and have had their plans interrupted due to a cancellation.” Those whose reservations are cancelled on or after June 15 because of the license situation will get a full refund and a coupon worth “at least 100% of the booking value” to use on a future Airbnb trip. They will also receive a $100 coupon for an Airbnb Experience.
According to TechCrunch, those who are unable to find alternative Airbnb places to stay for their trip will be put in touch with a travel agency in Japan, JTB, to find alternatives.
For those who are impacted by this news, Airbnb will be sending you step-by-step instructions of what to do next, or you can find them here.
This is not the first time that Airbnb has had a stumble on the heels of regulatory changes. In Amsterdam, regulators are preparing to halve the number of nights a property can be let out to 30 nights per year starting in 2019, from 60 nights currently. Berlin and Barcelona have also tried to limit the platform’s growth with their own regulations.