With the increasing number of tourists to Japan, investing in accommodations has become an attractive option.This guide explains how foreigners can operate a hotel, ryokan, minshuku (Vacation rental), or guesthouse in Japan in several steps.
Guide to Operating Accommodation Facilities for Foreign Investors: Hotels, Simple Accommodations, and Guest Houses
With the increasing number of tourists to Japan and the growing demand for accommodations, investing in lodging facilities has become an attractive option.However, Japanese laws and regulations are complex and have different regulations.This article provides foreign investors with a detailed explanation of the characteristics, regulations, and investment advantages and disadvantages of each type of lodging facility, as well as key points for success.
Types of Accommodations in Japan
Hotels and Ryokans
Western-style hotels are called hotels, while traditional Japanese lodging facilities are called ryokans.Among ryokans, onsen ryokans are particularly popular.They are attractive to foreign tourists as places where they can experience Japanese culture.There is no distinction between ryokans and ryokans, and both require a Ryokan Business License.They range in size from upscale hotels to family-style inns with only one room.
Guesthouses
These are low-cost accommodations, popular mainly among backpackers and young travelers.There is space for socializing, and it is easy to form a community with other guests. A license as a simple lodging house is required.
Minpaku (Vacation Rental)
A small, family-run lodging facility with a homelike atmosphere.We have strong ties to the local community and can offer a unique experience.Since it is essentially your own home for rent, there are various restrictions on annual operating days, etc., but it is an easy facility to start.Regulations differ from municipality to municipality, so it is necessary to confirm the permits for each municipality. Recently, vacation rentals are run by some companies. It’s the option as one of the accommodation operations.
investment options
Purchase of a hotel or inn
Purchase a facility that is already operating or has operated in the past.If the facility has operated in the past, including staff, it is eligible for M&A if the purchase includes the staff.
M&A
This method is to purchase the operating company itself.Since the staff has also taken over the business, they have the know-how and can smoothly transition the business.
Purchase real estate and build a facility.
You build buildings with your favorite design, but the investment will be large. Also, if you purchase a used building and use it as a hotel, you need to check whether it meets the requirements for a hotel.
consideration of operation method
Self-operation
This is a method in which the lodging facility is operated by the owner.It offers a high degree of freedom in management, but requires specialized knowledge and experience.
Outsourcing to a management company
This method is to outsource the management of the accommodation to a specialized company.This method saves time and effort in operation, but the outsourcing cost is high.
other
Market Research
It is important to research the local tourism situation and competing facilities before investing .
Japanese Language Proficiency
A certain level of Japanese language proficiency is necessary to do business in Japan .
Consultation with Experts
Consulting with experts such as real estate companies, lawyers, tax accountants, etc. will help you make a smooth investment.
Successful Cases
Foreign investor manages guesthouse renovated from an old private house
Investment in Onsen Ryokan revitalization projects
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