On September 8, Shinjuku Ward Mayor Kenichi Yoshizumi announced that he plans to submit a revised ordinance tightening regulations on private lodging businesses to a regular session of the Shinjuku Ward Assembly next year. Specifically, the ordinance would reduce the maximum number of operating days from 180 to 120 per year and prohibit private lodging operations in residential areas and near schools. The move comes amid a deterioration in the living environment caused by such issues as noise and improper waste disposal. In July, the Japan Tourism Agency issued a notice permitting local governments to tighten regulations on private lodging operations at their own discretion. A considerable number of municipalities facing similar problems may follow Shinjuku’s lead.

The business model known in Japan as minpaku—private lodging or short-term rental accommodation—differs from the traditional minshuku, generally a small, family-run Japanese guesthouse. The modern minpaku model originated with the online brokerage platform operated by Airbnb, a U.S. startup founded in 2007. In Japan, the market expanded rapidly as part of the government’s strategy to increase inbound tourism and promote deregulation. This included the 2016 amendment to the Act on National Strategic Special Zones and the enactment of the Private Lodging Business Act in 2018. Growth was also supported by demand for the effective use of vacant houses and rooms. Concerns about the impact on residential environments existed from the outset. Nevertheless, priority was given to ensuring convenience and comfort for guests, both to accommodate rapidly growing demand for lodging and to foster a new market.

In addition to the increasingly serious problems affecting residential environments, the structure of demand has changed. The number of Japanese guests has risen sharply, increasing 2.6-fold from 90,089 in April–May 2019, before the COVID-19 pandemic, to 235,591 in April–May 2026. Their share of total users also rose from 26.9% to 37.6%. Meanwhile, the inbound tourism market is changing against the backdrop of the weak yen. Affluent travelers have become a major target segment, and international hotel groups—including IHG, Hyatt, Hilton, and Marriott—continue to open luxury-brand hotels in rapid succession. The growing number of repeat visitors to Japan is also changing the purpose and destinations of travel. Tourism is expanding beyond the so-called “Golden Route” of Tokyo, Mount Fuji, Kyoto, and Osaka into regional areas, while demand is increasing for experiential and participatory activities rather than simply the purchase of goods.

As of July 15, 2026, there were 42,070 private lodging properties in operation nationwide. Tokyo’s 23 special wards accounted for 40% of the total; together with Sapporo, Nagoya, Kyoto, and Osaka, major urban areas accounted for 58%. Nationwide, the number of properties continues to grow, reaching 125% of the previous year’s level. At the same time, however, the closure rate stands at 36% nationwide and is particularly high in urban areas, reaching 44% across the surveyed areas comprising Tokyo’s 23 special wards and major regional and suburban municipalities (municipalities with their own public health centers). The private lodging market is now at a major turning point. The first requirement is a change in mindset among service providers. The lodging business is not merely a means of putting idle real estate to use. Establishing a clear management vision, an effective marketing strategy, and sound governance as an accommodation provider is essential for the market’s healthy and sustainable growth.

Note: Data on private lodging are sourced from “Portal Website for Private Lodging” operated by Japan’s Ministry of Land, Infrastructure, Transport and Tourism.

Takashi Mizukoshi, the President
This Week’s Focus, September 6 – September 10, 2026