China’s answer to Airbnb sets sights on Japan as tourism booms

Photo: Pramugdha Mamgain/Dealstreetasia

Tujia.com, China’s largest vacation rental platform, seeks to boost Japan listings by 10 times in two years as it vies with Airbnb Inc. to capitalize on the nation’s tourism boom.

The Beijing-based startup aims to increase the number of properties available for holiday rental to about 100,000 by 2019 from 10,000 now, Tomoko Suzuki, chief executive officer of the Japanese unit, said in an interview in Tokyo. About half of the listings are owned by Chinese investors, she said, adding that Tujia may buy lodgings of its own in the future.

Japan’s home-sharing market is rapidly expanding after the government cleared regulatory hurdles earlier this year and as record tourist arrivals put a strain on the hotel industry. Chinese are bucking tighter capital controls at home to invest in real estate around the world, and Suzuki said Japan’s relatively low land prices will give them an incentive to purchase properties that Tujia can add to its listings.

“Real estate in Tokyo, Osaka and Kyoto is cheap compared to Shanghai and Beijing, and Chinese interest in property investment is strong,” said Suzuki. Some investors own as many as 100 rooms, sometimes whole apartment buildings, and they lease to local tenants as well as tourists through the Tujia platform, she said.

Visitors to Japan rose 18 percent to 18.9 million in the first eight months of the year, on course to beat 2016’s record 24 million, Japan National Tourism Organization datashow. The country hosted more than 800,000 Chinese in August alone — the most ever for a single month. Prime Minister Shinzo Abe’s government is seeking to attract 40 million arrivals in 2020, the year Tokyo hosts the Olympics.

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Tujia charges owners 3 percent of their accommodation rates, which are typically about 15,000 yen ($130) to 20,000 yen a night, Suzuki said. The firm arranges more than 56,000 stays a day on a group basis, she said, declining to comment on how many of those are in Japan. The service, which is available only in Chinese, is in seven Asian countries including Singapore, Thailand and Malaysia.

Tujia has been raising funds for its expansion. In Japan, the company employs eight people, a number Suzuki expects to roughly double by 2019. It’s seeking to increase the number of listings there to 200,000 by 2025, she said.

By comparison, San Francisco-based Airbnb has about 55,000 listings in Japan, its most popular destination in the Asia-Pacific region. Airbnb doesn’t own the properties.

Japan passed a bill in June that removed the uncertainty over whether renting out a property for short periods was legal. The legislation, which limits stays to 180 nights a year and requires providers to register with local governments, will take effect next year.

“Japan has attractive places to visit everywhere,” said Suzuki. “We definitely have the highest expectations for the market here.”

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Bloomberg